Small Business Loan in India


A personal loan for small business or small business loan is a useful financial aid for small to medium-sized businesses. You can use an instant personl loan for small business to expand, grow your inventory, assets, and take your business to new heights. These loans do not require collateral or a percentage of your equity. They offer attractive interest rates, fast approval and instant disbursement.

Keep reading to know all the information you need to know and apply online for a small business loan with Buddy Loan today!

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Personal Loan For Small Business Highlights

You can easily avail a personal loan for your small business in India and take your business to the next level. Whether you want to grow your business or start a new business, this loan can give you the right assistance. Explore the various details about small business loan:

Interest Rates 11.9% onwards
Repayment Tenure Up to 10 years
Approval Time 24 hours approx
Loan Amount From ₹50,000 to ₹50,00,000
Type of Loan Unsecured Business Loan

Small Business Loan Interest Rate & Charges

Interest rates depend on market conditions, loan amount, and your business's financial stability. That is why we connect you to the best lenders with affordable Small Business Loans. Get the best loan at affordable interest rates for working capital, to buy equipment & inventory or to expand your overall business.

Interest Rate 11.9% onwards
Processing Fee Up to 6% of the loan amount
Repayment Tenure Up to 10 years
Prepayment Charges Up to 2% to 4%
Late Payment Charges Up to 2% of the due amount
Note: Please check for any additional fees and charges before applying for the loan.

Small Business Loan Eligibility

To be eligible for a personal loan for small businesses, borrowers are expected to meet the specifics of lenders. Here is the standard eligibility to secure a small business loan:

Age Requirement: Applicants should typically be between 21 and 60 years old.

Citizenship: Eligible applicants must be Indian citizens.

Creditworthiness: A favorable credit history will add value to your loan request; with a preferred CIBIL Score of 750 or higher significantly improves the chances of loan approval.

Annual Turnover: At least ₹6 lakhs.

Registration: Have a valid business license.

Loan for Small Business EMI Calculation

Calculating Small Business Loan EMIs is a crucial step in the loan application process. Our Business Loan EMI calculator simplifies this task by instantly providing you with monthly repayment amount; based on your loan amount, interest rate, and chosen tenure.

₹
%
Monthly EMI ₹86
Principal Amount ₹1,000
Total Interest ₹32
Total Amount ₹1,032.00

Year Month Principal (A) Interest (B) EMI (A+B) Balance Loan Paid to Date (%)

You can also manually calculate your EMI using the below formula:

EMI = [P x R x (1+R)^N] / [(1+R)^N - 1]

Where:

EMI is the Equated Monthly Installment.

P is the principal loan amount.

R is the monthly interest rate (annual rate divided by 12, and converted to decimal).

N is the total number of monthly installments (loan tenure in months).

This valuable information empowers you to assess your financial capacity and make informed decisions about your loan application. Ensure that it aligns with your business's financial goals and capabilities.

Documents Required For Online Small Business Loan

To get your business loan approved, you need to provide the lender with certain documents. Common documents required for an online small business loan application typically include:

Personal ID: Driver's license or passport.

Address proof: Utility bill or bank statement.

Business registration: Business license or articles of incorporation.

Financial statements: Income statement, balance sheet, and cash flow statement.

Tax returns: Personal and business tax returns for previous years.

Small Business Loan Lenders

Seeking financial support for small business is crucial & easy with the right lender. Below, we've compiled a list of banks, including reputable names like SBI and HDFC Bank offering small business loans and instant loans, along with their current interest rates:

Bank & NBFC Interest Rate (p.a.)
State Bank of India (SBI) 8.5% onwards
ICICI Bank 10.90% onwards
HDFC Bank 8.85% onwards
Axis Bank 9% onwards

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Note- The interest rates mentioned are subject to change. Do visit the website for more information.

Features and Benefits of Small Business Loan

Personal loans tailored for small businesses offer a multitude of benefits. These loans provide affordable loan options with fast approval processes, ensuring a seamless and straightforward application experience.

Let's delve deeper into the features and benefits of these personal loans

Collateral Free Loan

Expand or start business without risking any assets.

Affordable Interest Rates

The interest rates start at just 8.90% p.a.

Multipurpose Loan

Use the fund to start or expand your business.

Flexible Repayment

Choose your preferred tenure upto 10 years

Quick Approval

Loan disbursal in minutes after approval

Zero Charges

No hidden charges and penalties.

Types of Small Business Loan For Your Needs

Considering the diverse financial needs of small businesses, small business loan options are available. Each type serves specific purposes and has distinct advantages.
Here are the key business loans and their common use cases:

Working Capital Loans: Ensure smooth day-to-day operations by paying for expenses like inventory, payroll, and bills.

Business Expansion Loans: Grow your business, open new locations, or expand into new markets to increase revenue.

Equipment Financing: Invest in essential machinery, vehicles, or technology upgrades to enhance productivity and efficiency.

Invoice Financing: Immediately pay pending invoices with small business loan to manage working capital effectively.

Merchant Cash Advances: Obtain funds based on daily sales, particularly beneficial for retail and service businesses.

Lines of Credit: Enjoy flexibility with a revolving credit line, allowing you to draw funds as needed, with interest applied only to the amount utilized.

Small Business Loan Schemes

The government of India offers a number of schemes to help small businesses get financing. Some of the most popular schemes include:

Mudra Yojana: This scheme provides loans to micro, small, and medium enterprises (MSMEs) for a variety of purposes. Loans under Mudra Yojana are available through banks and other financial institutions.

Stand Up India: This scheme provides loans to women and SC/ST entrepreneurs who want to start new businesses. Loans under Stand Up India are also available through banks and other financial institutions.

Credit Guarantee Fund Scheme for Micro and Small Enterprises (CGFMSE): his scheme provides credit guarantees to banks and other financial institutions that lend to MSMEs. This helps to reduce the risk for lenders and makes it easier for MSMEs to get loans.

Technology Up-gradation Fund Scheme (TUFS): This scheme provides loans to MSMEs to help them upgrade their technology. Loans under TUFS are available through banks and other financial institutions.

In addition to these government schemes, there are also a number of private sector schemes for small businesses. Some of these schemes are specifically designed for women entrepreneurs, start-ups, and businesses in specific industries.

Women's Entrepreneurship Platform (WEP): This program provides loans and other financial assistance to women entrepreneurs.

Mahila Udyam Nidhi Scheme: This scheme provides loans to women entrepreneurs to start and grow their businesses.

Udyogini Scheme: This scheme provides loans to women entrepreneurs in rural areas to start and grow their businesses.

Startup India Seed Fund Scheme: This scheme provides grants to start-ups to help them develop their products and services.

Steps to Apply for Collateral-Free Small Business Loan

Follow the steps to apply for a personal loan for a small business and get it approved online:

Step 1 - Visit buddyloan.com or Download & install Buddy Loan app.

Step 2 - Fill out the application form, enter the loan amount, the tenure in months, and contact details.

Step 3 - Provide the following personal information:

  • Email Address
  • Employment Type : Salaried/ Self-Employed
  • Company Type
  • Industry Type
  • Current Company Name
  • Company Address
  • Year of Employment
  • Net Income
  • Mode of Salary
  • PAN Card Details
  • Full Name (As Per Pan Card)
  • Current Address with PIN Code
  • Mobile Number

Step 4 - Submit the loan application and wait for confirmation.

EMI Repayment of Small Business Loan

Small business loans are repaid through Equated Monthly Installments (EMIs), which comprise both the principal amount and the interest. Carefully review the loan agreement and consult with your lender for any clarifications regarding the EMI schedule and terms.

In order for your small business to succeed and be sustainable, you must borrow responsibly and make timely EMI payments.

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Frequently Asked Questions

Any Indian citizen between the age of 21 to 60, with a valid business license and credit score of 750 and above, may be eligible for a small business loan. To know more about eligibility for small business loans, read the above article.

It is possible to get a business loan without income proof, but it will be more difficult and you may have to pay a higher interest rate. Some lenders may also require you to provide other forms of collateral, such as a personal guarantee or a security interest in your business assets.

Yes, you can get a loan to start a small business. There are a number of government schemes and private lenders that offer loans to small businesses.

Yes, it is possible to get a small business loan without ITR. Some lenders accept bank statements and other proofs of income. However, you may have to pay higher interest rates.

The interest rate for a small business loan in India will vary depending on the lender, the amount of the loan, the borrower's credit score, and the purpose of the loan. You can have an interest rate of 11.9% p.a. through Buddy Loan lenders.

The processing fee is typically around 2-6% of the loan amount.

You don’t need to mortgage your valuable assets to get personal loan for small business.

The easiest way to get a small business loan is through Buddy Loan. Just follow the steps to apply for a collateral free small business loan mentioned above.

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