In today’s world, everyone wants to start their own business or expand their existing one. To grow a business, financial support is essential, and for that, many entrepreneurs opt for business loans. While obtaining a business loan has become easier, it still requires adherence to certain rules and regulations set by financial institutions.
This article provides detailed information about business loans. Read till the end to understand the complete process of applying for a business loan.
How to Apply for a Business Loan?
Many individuals aspire to start their own businesses to achieve financial independence. However, due to a lack of funds, they often struggle to begin. To resolve this issue, we are here to guide you on how you can avail of a business loan.
The government has introduced several schemes to strengthen the Indian economy by providing business loans. Under these schemes, you can secure a loan amount of up to ₹10 lakh for your business.
Business Loan Plan
To secure a business loan, you need a well-structured business plan. Banks and financial institutions evaluate your business plan before approving the loan. You must present your business model to the bank, demonstrating its potential profitability and growth prospects.
To get a loan, you need to provide detailed information about your business, including how it will generate profit. If the bank manager is convinced of your business’s viability, your loan application will be approved. If you are starting a new business, you can apply for government-backed loan schemes for financial assistance.
Business Loan Interest Rates
| Bank/Financial Institution | Interest Rate |
|---|---|
| HDFC Bank | 10% – 22.50% |
| Axis Bank | 9.5% – 19.20% |
| Kotak Mahindra Bank | 16% – 26% |
| IDFC First Bank | 10.50% |
| HDB Financial Services | 36% |
| Tata Capital | 12% |
| Bajaj Finserv | 9.75% – 30% |
Business Loan Eligibility & Documents
- The applicant should be between 21 to 60 years old.
- Proof of business turnover for previous years (if applicable).
- Eligible applicants include self-employed individuals, private or public companies, partnership firms, or new business startups.
- Required Documents:
- PAN Card & Aadhaar Card
- Address Proof
- Bank Statements
- Business Address Proof
- Income Tax Returns (2-3 years for existing businesses)
Business Loan Application Process
- Visit the Bank or Financial Institution: Choose a suitable bank and visit the nearest branch.
- Consult the Loan Officer: Discuss loan options, interest rates, and eligibility criteria.
- Fill Out the Application Form: Provide all necessary details and attach required documents.
- Submit the Application: Submit your completed form to the loan officer for verification.
- Loan Approval Process: The bank will verify your documents and business feasibility.
- Loan Disbursement: Once approved, the loan amount will be transferred to your bank account.
How to Get a Business Loan Under the PM Mudra Scheme?
The PM Mudra Loan Scheme allows individuals to apply for business loans through banks. The interest rate and terms vary depending on the bank.
How Much Loan Can I Get to Start a Business?
If you are launching a new business, you can avail of a loan between ₹50,000 to ₹10 lakh through government schemes.
What is Required to Get a Business Loan?
To obtain a business loan, you need to prepare a detailed business proposal and present it to the bank or financial institution. Once your plan is approved, you will receive the loan amount.
Which Bank Provides Business Loans?
Most banks and financial institutions, including HDFC Bank, Axis Bank, Kotak Mahindra Bank, and Bajaj Finserv, offer business loans to entrepreneurs.
How Much Loan Can I Get for a New Business?
For a new business startup, you can avail of a loan of up to ₹10 lakh through government-backed schemes, subject to meeting eligibility criteria.
By following this guide, you can successfully apply for a business loan and secure the required funding for your business expansion or startup.