Small Business Loan : Which Bank Is Best For Business Loan -

Whether you want to expand your business or start a new business, you may need financial help from outside. Without external funding, you may stay behind to take the advantages of the market opportunities. At many stages of a business cycle, a businessman needs a business loan to fund working capital or operational expenses. That is why many lenders are offering business loans to startups or small and medium enterprises (SMEs). A business loan ensures that your business doesn’t face any financial problems.

What is a small business loan?

A small business loan is a financial tool exclusively meant for self-employed individuals as wells as enterprises such as proprietorship, private and public limited entities. It can be used to invest in infrastructure, buy new machinery, to increase working capital, set up a new branch etc.

Leading small business loan lenders in India

State Bank of India Simplified Small Business Loan

State Bank of India offers the Simplified Small Business Loan units engaged in manufacturing and services activities, as well as self-employed individuals, professionals, and wholesale / retail traders. SBI Simplified Small Business Loan can be availed for build-up of current assets and fixed assets of the business.

Some notable features of SBI Small Business Loan are as under:

Loan amount

10 times of average monthly balance in current account in last 12 months.

Min: Rs. 10 lakhs

Max: Less than Rs. 25 lakhs

Interest rate

8.25% to 16.95%

Collateral security

Minimum collateral of 40%

Loan tenure

Up to 60 months

HDFC Bank Business Loan

HDFC Bank offers business loans to all your diverse business requirements. HDFC Bank business loans are tailormade to cater to unique needs of your business irrespective business’s size small or large. HDFC business loan comes with a host of benefits like:

Some notable features of HDFC business loan are as under

Loan amount

Up to Rs. 40 lakhs; up to Rs. 50 lakhs in select locations

Interest rate

15.65% to 21.20%

Processing fees

Up to 2.50% of the loan amount (minimum of Rs. 2359/- & maximum Rs. 88500/-)

Loan tenure

Up to 48 months

Overdue EMI interest

2% per month subject to a minimum of Rs. 200/-

Tata Capital Business Loan

Tata Capital offers unsecured business loans to meet your various business needs. You can avail a Tata Capital business loan to open a new branch, buy new machinery, increase working capital etc.

Some exciting features of Tata Capital business loan

Key features of Tata Capital Business loan

Bank of Baroda Business Loan

Bank of Baroda business loan offers for diverse needs of your business such as for the purchase of equipment, general working capital. Bank of Baroda business loan is designed for individuals operating independently without hiring labour.

Exciting features of Bank of Baroda business loan

Key features of Bank of Baroda business loan

Loan amount

4.5 times the borrower’s tangible net worth

Interest rate

Linked to tenor based MCRL

Processing fees

Up to 0.75% of the loan amount

Magma Fincorp SME Loan

Magma Fincorp offers SME loans starting from Rs. 3 lakhs to 2 crore for various business needs. Magma SME loan comes in forms — Collateral free SME loan, loans for self-employed doctors and express business loan.

Notable features of Magma Fincorp SME loan

Key features of Magma SME loan

ICICI Bank SME business loan

ICICI Bank offers SME business loans for your various working capital needs against your property and debt mutual funds.

Notable features of ICICI Bank SME business loan

Key features of ICICI Bank SME business loan

Eligibility for small business loan

Documents required for small business loans

Common business loans in India

Government loan: Government of India has launched special loan schemes, like Mudra Yojana, for small business units across the country.

Project finance: Offered on the basis of project assessment report for long-term infrastructure or industrial projects.

Equipment finance: Extended to buy or lease equipment for business units.

Working capital finance: Provided for daily working needs to ensure business operates smoothly

Financial advisory: Provided to seek financial advisory from financial experts.

Insurance: Provided for insurance solution for better safety.

Trade loans: Provided for traders to expand existing business or start new business.

Originally published at on August 15, 2019.

I am a diligent and motivated self-worker with 3+ years of experience working in credit review and loan processing within the financial tech industry.