About Business Loan

Avail a business loan and use it towards daily capital expenses, managing working capital gap, specific project funding and expansion of the business including the purchase of a new machinery. You can also apply for a business loan if you need capital to start a new business or ancillary units for your existing business. There are many banks & NBFCs that offer loans up to 50 lakhs, with or without collaterals and with pre-approved offers. The rate of interest applicable and tenure offered for the loan depends upon a number of factors such as your credit rating, the profitability of the business, future growth potential etc.

Grow your business with Business Loans from Afinoz. We provide you with several options in business loans from different banks and NBFCs. Now you can easily avail business loans through Afinoz without any hassles. We are always with you to help build your business.

Features & Benefits

Avail the following benefits with just few clicks.

  • Loan amount starts from Rs. 50,000 onwards
  • Simple and easy documentation process
  • Tenure for business loans ranges from 12 months to 60 months
  • No collateral or guarantor required
  • Business loan interest rates vary from 13% to 35% and depend on the eligibility of the applicant and the quality of business

Accessible and Convenient

Nowadays banks and NBFCs are readily offering small business loans starting from as low as Rs. 50,000 to Rs. 1 cr.

Multiple Loan Options

All banks & other financial institutions have different products in this segment to cater to businesses of different sizes, incorporation, industries etc.

Competitive interest rates

We have joined hands with multiple banks and NBFCs to offer you the most competitive rate in the industry.

Non Profit Sharing

Simply repay the loan amount to the bank. You dont need to grant proportionate ownership in business to Investors

Business loans offer tax benefits

Businesses opting for bank loans enjoy tax shield. The interest repaid on such loans is deducted from profits before calculating the tax payable to the Government.

Eligibility & Documents Required

Business loan eligibility required

Establish your eligibility and get the funds hassle free. It depends on the bank and the amount of risk they are ready to take on a particular business. It also depends upon whether the loan is for an existing business or to start a new one. There are many banks & NBFCs in India that offer loans for both small and big businesses. Getting approval & disbursal is possible within a few days, if you have all the essential documents and you meet the eligibility criteria. Given below is the list of eligibility criteria required to apply for a business loan in India.

Eligibility Criteria for Different Employment Types

Private Limited Company
Self-Employed Professionals
Proprietorship & partnership firms

Private Limited Company

Net income of the applicant or the concern should be more than Rs. 150,000 per annum (ITR) for a business loan of up to Rs. 15 lakhs and over Rs. 300,000 (ITR) for a business loan above Rs. 15 lakhs.

Factors Deciding Business Loan Eligibility

There are many factors that are considered while determining your eligibility for a business loan. Every bank or lending institution that offers you a loan will look into many aspects prior to sanctioning the loan. Few important ones are provided below:

Age Limit
Income
Turnover
Co-applicants

Age Limit

The age of a loan applicant must be between 21 to 65 years.

Customer Profiles that lending institutions consider for Business Loans

There are different types of customers for business loans. Some are individuals who are self-employed or salaried and others are entities or companies. A large bank will cater to both these types of customers. The eligibility criteria, interest rates, processing charges, tenure and other features extended by a bank will vary from customer to customer. Therefore, while applying for a business loan, check which category of customers you belong to and check your eligibility accordingly.

Self-Employed Professionals
Self-Employed Non-Professionals
Entities

Self-Employed Professionals

This includes Chartered Accountants, doctors, company secretaries, architects and designers etc. who are indulged in their own practices.

Document Required

Each bank has its own specific set of requirements, criteria and eligibility factors. Here is a general list of documents and information required from you to process your loan application:

General Documents Checklist
Self-Employed (Private Ltd. Co. and Partnership Firms)
Self-Employed Individuals – Professionals
Self-Employed Individuals – Non-Professionals

General Documents Checklist

  • Identity proof - Driving License/PAN Card/Passport/Voters ID card
  • Address Proof (Ration card/latest telephone or electricity Bill/Passport/Trade license/Lease agreement/Sales Tax certificate)
  • Bank statement for the last 6 months
  • Proof of continuation
  • Other Mandatory Documents such as Sole Proprietorship Declaration, Certified true copy of Memorandum & Articles of Association
  • Audited financials (signed by a CA) for the last 3 years.
  • Copies of IT returns for the last two years

*Note:- Required documents may vary from institution to institution. Every lending entity has their own criteria for documentation.

Interest Rate & Charges

Interest rates & other charges applicable on a loan depend upon the health of the firm i.e. annual turnover and profitability amongst other factors. Has the entity been growing, reducing in size or been at the same level for the past few years? What is the amount you are looking to raise as debt? How many years are you planning to avail it for? How is the promoter’s credit history? Has he / she ever defaulted on any debt, credit card payments etc.?

We, at Afinoz, can assure you that we will get you the best interest rate available & possible ,considering all the above-mentioned factors.

Bank
Interest Rates*
Processing Charge
HDFC Limited 15.65 % to 21.20% Up to 2.5% of loan amount + GST
ICICI Bank 16.49% TO 18.99% Up to 2% of loan amount + GST
Bank Of Baroda 14.10% UP to 1% of the loan amount
Axis Bank 11.50% to 20.00% Up to 1.25% of loan amount + Service Tax
TATA capital 19% to 24% Up to 2.75% of the loan amount + GST
RBL bank 20% to 22% 3% of loan amount
Indusind bank 18.20% to 20.20% 2% of the loan amount
Kotak Mahindra 16% to 19.99% 3% of the loan amount
Fullerton india 13% to 33.5% 6.5% of the loan amount
Bajaj Finserv 18% to 35% Up to 3% of the loan amount
IIFL 16% to 26% Up to 3% of the loan amount
MUFIN Finance 13% to 28% Up to 3% of the loan amount
Incred Finance 16% onwards 2% to 5% of the loan amount
Prest loan 18% to 26% 3% of the loan amount
LendingKart 15% to 27% Up to 2% of the loan amount
HDB Bank 18% to 20% Up to 2% of the loan amount
Aditya Birla Finance 14% to 21% 2% of the loan amount
Vistaar Finance 15% to 29.25% 2% of the loan amount
Neo Growth 18% to 24% 2% of the loan amount

*Special Note:- Rates are subject to periodic changes. Business loan interest rates and other fees and charges are subject to regular review and can vary from customer to customer depending upon a number of factors ranging from the credit score to existing loans, amount of savings, company with which you are currently employed, the number of years of relationship with the bank or NBFC etc.

FAQ's

Q.
What is a Business loan?
Business loan is an unsecured form of loan provided by banks and NBFCs (Non-Banking Finance Companies). Unsecured means that banks do not ask for any collateral or a guarantor for sanctioning it. Entities like proprietorship firm, partnership firm, private or public limited companies are eligible for this type of loan. The end use of the loan amount is left to the borrower’s discretion and can be used for working capital purposes, meeting short-term cash flow requirements, investments into plant and machinery etc.
Q.
What are the minimum and maximum loan limits for a business loan?
The minimum loan amount offered is INR 50,000. This may go up to a maximum of INR 40, 00,000. Higher loan amounts are possible but these are considered after an in-depth discussion between the borrower and the lending institution and a more detailed due diligence.
Q.
How much time does it take to disburse the business loan?
Afinoz will work with the concerned bank or NBFC and get you the loan within 5 to 7 working days of your submitting all the documents and completing all the formalities.
Q.
What is the minimum amount of security that needs to be provided for availing the term loan?
It depends from case to case and such requirements will be explained to you by the sales officer at the time of applying for the loan.
Q.
Is any collateral or additional security required for availing this loan?
No
Q.
Is pre-closure allowed in business loans?
Some banks & NBFCs have a lock-in-period of six months to one year for a business loan. Whereas some institutions even allow pre-closure right after the first EMI has been paid. Some banks or NBFCs restrict the borrower from foreclosing the loan by transferring the loan to another bank or NBFC. However, the borrower may foreclose the loan from his own funds in such cases. Some banks allow fore-closure without any charge while some others charge an upfront fee of 2% to 5% of the outstanding balance. Clarifications on this are to be sought from our business loan advisor during the processing of your business loan.
Q.
Is part payment allowed on a business loan?
Some lending institutions may allow part payment while some others may have restrictions on how many times in a year you can pay off your loan partially. Please remember part payments are in addition to the monthly EMIs the borrower is expected to pay. Banks generally also have guidelines on the minimum and maximum amounts that can be paid partially. Clarification should be sought from our loan advisor during processing of the loan regarding this.
Q.
How is a business loan repaid?
All business loans are repaid through EMIs or equated monthly installments from the borrower’s bank account. The borrower or customer is required to either give PDCs (Post-Dated Cheques) or sign an ECS (Electronic Clearing Service) mandate in favor of the bank disbursing the loan.
Q.
What happens if the ECS bounces or I miss an EMI payment?
The bank will levy ECS bounce charges. This will also get reported in your credit report. It depends upon the severity and the regularity of the miss; it will affect your credit score and will negatively impact your prospects of getting a loan in future. In addition to this, banks may also take legal action against the borrower.
Q.
What is the rate of interest & processing fee on business loans?
The interest rate varies from 13% to 35%. The processing fee charged up to 2.5% of the loan amount. Moreover, some banks may also insist on insurance cover.