In today’s time, many people dream of starting their own business or expanding the one they already have. To grow any business, financial support is necessary, and for this reason, entrepreneurs often look for business loans. While getting a loan has become easier now, it still requires following certain rules and conditions set by banks and financial institutions.
This guide will give you complete details about business loans—how to apply, required documents, eligibility, interest rates, and the process step by step.
How to Apply for a Business Loan?
A lot of individuals want to start their own business to achieve financial independence, but they often face a lack of funds. To solve this, you can apply for a business loan. The Indian government has also launched several schemes to support small businesses and startups. Under these, you can get loans ranging from ₹50,000 to ₹10 lakh.
Importance of a Business Plan
The most important thing before applying for a loan is to have a strong business plan. Banks carefully study your business model to check its growth potential and profitability. You need to explain how your business will generate income.
If the bank finds your proposal convincing, your loan request is likely to be approved. For new businesses, government-backed schemes are also available to make the process easier.
Business Loan Interest Rates
| Bank / Financial Institution | Interest Rate Range |
|---|---|
| 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% |
Eligibility Criteria & Documents
Eligibility:
- Age between 21 to 60 years.
- Self-employed individuals, companies, partnership firms, or startups are eligible.
- Proof of past business turnover (if applicable).
Documents Required:
- PAN Card & Aadhaar Card
- Address Proof
- Bank Statements
- Business Address Proof
- Income Tax Returns (2–3 years for existing businesses)
Step-by-Step Loan Application Process
- Visit the Bank or Financial Institution – Select the bank where you want to apply.
- Consult the Loan Officer – Discuss loan amount, interest rate, and eligibility.
- Fill Out the Application Form – Provide complete details along with documents.
- Submit for Verification – Bank will verify your information and assess feasibility.
- Loan Approval & Disbursement – Once approved, the loan amount is credited to your account.
PM Mudra Loan Scheme
Under the Pradhan Mantri Mudra Yojana (PMMY), entrepreneurs can apply for business loans through banks. Loan amount and interest rates vary from bank to bank.
Frequently Asked Questions
How much loan can I get to start a business?
For new startups, you can get between ₹50,000 and ₹10 lakh under government schemes.
Which bank provides business loans?
Most leading banks and NBFCs like HDFC, Axis, Kotak Mahindra, Bajaj Finserv, etc., offer business loans.
What is needed to get a business loan?
A strong business proposal, valid documents, and meeting eligibility criteria.
Conclusion
By preparing a proper business plan, arranging required documents, and applying through the right scheme or bank, you can successfully secure a business loan. This financial support can help you start your dream business or expand your existing one with confidence.