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Get Kotak Mahindra Bank Business Loan up to Rs. 2 Crore online at interest rate starting from 16% p.a.
|Rate of interest||Competitive interest rates|
|Loan amount||Up to Rs. 500 Crores|
|Repayment tenure||Up to 20 years|
|Processing fee||Up to 3.5% of the loan amount|
|Minimum business vintage||3 years|
|Prepayment charges||Up to 6%|
|Age required||21 to 65 years|
|Name of Lender||Rate of Interest (per annum)||Processing Fee||Maximum Loan Limit|
|Bank of Baroda||As per the policy of the bank||As per the policy of the bank||Rs. 200 Crores|
|HDFC Bank||11.90% - 21.35%||0.99% - 2.50%||Rs. 50 Lakhs|
|Axis Bank||9% - 18.50%||Up to 2% + taxes||Rs. 50 Lakhs|
|SBI||Competitive rate linked to EBLR & MCLR||0% to 1%||Rs. 500 Crores|
|Kotak Mahindra Bank||Competitive interest rates||Up to 2%||Rs. 75 Lakhs|
|ICICI Bank||10% - 11.10%||Up to 2% + taxes||Rs. 2 Crores|
|IDFC FIRST Bank||Competitive interest rates||Up to 3.5%||Rs. 7 Crores|
Following are the key features of Business Loan:
For projects where the loan required is above 2 Crores, the project appraisal will be done by a team of skilled persons from the Project Finance Department (PFD) of the bank/financial institution. Based on PFD, liquidity ratio, Debt Service Coverage Ratio (DSCR), Fixed Asset Ratio, and various other factors, the quantum will be decided.
The various types of Business Loans are as follows:
Working Capital Finance
Any businessman who is in the service/manufacturing business or retail/wholesale trading, imports/exports can make use of this facility. This facility is generally opted for when there is a liquidity crunch in the business due to irregular cash flow and funds are required for meeting the day-to-day operational expenses of the business or when there is a sudden increase in the volume of the business. Working Capital finance can be by way of a line of credit, overdraft, packing credit, post-shipment credit or even by way of non-fund based limits like Bank Guarantees and Letter of Credit.
This facility will be a revolving credit and can be used as and when required. The utilised amount can be replenished by depositing the amount when the cash flow of the business improves. The biggest advantage in this type of finance is that interest is levied only to the extent of the amount utilised and for the period utilised.
Rate of interest is mainly based on the credit appraisal of the business. The working capital finance will be for a period of 6 to 12 months and will be renewed after an annual review. The prime security for working capital finance will be the stocks and receivables of the firm/Company. Collateral security may also be insisted by way of a mortgage of residential/commercial property. It depends on the lender and the quantum of finance.
These loans are given mainly for capital investment, which will be of long-term in nature. It could be for building the factory premises, improving the infrastructure, modernisation of the existing structure, etc. The quantum of loan involved in this facility will be high and will be disbursed in a lump-sum. The repayment period also will be longer and can range between 7 years to 20 years. The rate of interest will be based on the profile of the Company, Credit Rating, the quantum and period of the loan.
The prime security will be the assets created out of the finance and collateral security will be a mortgage of residential/commercial property. To apply for this type of finance, you should have a detailed project ready along with a business charter as to how the loan amount will be utilised.
This is a very lucrative way of arranging finance for a firm/company. The time gap between raising an invoice and the final payment can be anywhere between 60 to 90 days. During this time, the firm/company may face a liquidity crunch and might need funds for the day to day operations of the business. Banks/financial institutions do provide finance against such invoices for customers who have a long-standing relationship and have been availing credit facilities which have been conducted satisfactorily. Up to 80% of the value of the invoice will be provided as working capital funds and the remaining 20% will be provided when the final payment is received. Invoice financing will attract processing charges and interest as per the guidelines of the lender.
Equipment financing is popular in the manufacturing sector. Any manufacturing business will require some mandatory equipment for manufacturing the product. Such equipment will be financed by banks/financial institutions. Funding will be done for office equipment, healthcare equipment, medical equipment, construction equipment, etc. The quantum of finance can be more than 100 Crores in some cases. The funding will be project-based. The rate of interest will be very competitive as the quantum involved will generally be high. The repayment period will be anywhere between 3 years to 7 years. Security of the assets created out of the finance will be taken and collateral of residential/commercial property will be insisted on a case to case basis.
PMMY, i.e., Pradhan Mantri Mudra Yojana, has been introduced to encourage entrepreneurship under the MSME Sector and to create employment for the youth of the country. A loan is provided both for service and manufacturing units. The quantum of loan will be between Rs. 50,000 to Rs. 10 Lakhs based upon the line of activity.
Stand-up-India was introduced to encourage setting up of new ventures by candidates who belong to Scheduled Caste/Scheduled Tribe and to encourage women entrepreneurs. Entrepreneurs belonging to Scheduled Caste/Scheduled Tribe or the women entrepreneurs should have the major shareholding in the firm/Company to be eligible for funding under the scheme.
The following are the common eligibility criteria for a Business Loan:
The following are the common documents required for a Business Loan:
Business loans involve various types of charges, like documentation charges, cheque dishonour charges, repayment mode swap charges, charges for duplicate NOC, cancellation charges, and so on. Following are three main charges types that are common for each lender:
Delayed payment penalty: 2% onwards over & above the normal rate of interest on the overdue amount for the overdue period.
It is important to be aware of the credit score of the promoters as well as the company before approaching the lender. Credit scores indicate your repayment history. If both the company and the promoters have a good credit history, it will be that much easier to get approval for a business loan.
The eligibility check for a Business Loan depends on the following variants:
Yes. Part-payment facility after a certain lock-in period will be permitted. However, the number of times a part-payment can be made will depend on the lender. Also, part-payment charges ranging from 2% to 4% will be charged on the part-paid amount.
Business Loans should be paid in Equated Monthly Instalments (EMIs) for which auto-debit instructions have to be given.
Yes. Some banks do provide a dropline overdraft facility against the security of the immovable property.
For working capital finance, the repayment will be on demand. It is normally for a period of 6 to 12 months with a further renewal facility on an annual review. For term loans, the repayment period will vary from 3 years to 20 years depending on the project for which the finance is availed.