Business Loan Interest Rates
As a business owner or an entrepreneur, taking a loan to grow your business is necessary. Most banks have many schemes running for low interest business loans.
If you are interested in knowing what is the interest rate on a business loan, then read on!
Business Loan Interest Rate in India
If you were searching for ‘all bank business loan interest rate’, your search ends here. Take a look at the list below-
State Bank of India
| Scheme | Amount | Interest Rate | Processing Fee |
| Loans under Contactless Lending Platform | Rs.1 Lakh - Rs.500 Lakh | Competitive Pricing Linked to EBLR & MCLR | Contact the bank for details |
| Simplified Small Business Loan | Rs.10 Lakh - Rs.25 Lakh | Competitive Pricing Linked to EBLR | Contact the bank for details |
| Loans to Business Correspondents | Rs.25,000 - Rs.2.5 Lakh | One Year MCLR + 2.75% (Currently 11.25%) | 0.50% |
Currently, EBLR = 9.15%+CRP+BSP & RLLR = 8.75%+CRP [CRP stands for Credit Risk Premium; for more details, please contact the branch for details]
Union Bank of India
| Scheme | Amount | Interest Rate | Processing Fee |
| Union Equipment Finance | Rs.10 Lakh - Rs.50 Crore | Competitive Pricing Linked to EBLR & MCLR | Contact the bank for details |
| Union MSME Suvidha | Rs.10 Lakh - Rs.25 Lakh | Contact the bank for details | Contact the bank for details |
| Union Start Up | Rs.0.10 Crore - Rs. 5 Crore | Contact the bank for details | NIL |
Currently, EBLR = 9.30%; MCLR = 7.90% - 9.00%
Canara Bank
| Scheme | Amount | Interest Rate | Processing Fee |
| Loan Guarantee Scheme for COVID affected Tourism Sector | Up to Rs.10 Lakh | 7.95% | As per bank guidelines |
| Standby Term Loan Scheme for Apparel Exporters in Small & Medium Sectors | Up to Rs.100 Lakh | As per bank guidelines | As per bank guidelines |
Bank of Baroda
| Scheme | Amount | Interest Rate | Processing Fee |
| Digital Mudra Loan | Up to Rs.10 Lakh | To be charged as per the policy of the bank | Contact the bank for details |
| Baroda Loan to Business Correspondents | Up to Rs.2,50,000 | 0.75% - 1.00% |
Bank of India
| Scheme | Amount | Interest Rate | Processing Fee |
| Star Start Up Scheme | Rs.10 Lakh Onwards | 1% concession in applicable ROI, subject to minimum ROI not less than RBLR | Nil |
Punjab National Bank
| Scheme | Amount | Interest Rate | Processing Fee |
| MSME Prime Plus | Rs.10 Lakh - Rs.100 Crore | RLLR+BSP+0.20% to 1.50% | Contact the bank for details |
| PNB Sampatti Scheme | Above Rs.10 Lakh | RLLR+BSP+1.00% to 1.50% | 0.25% - 0.50% |
Indian Overseas Bank
| Scheme | Amount | Interest Rate | Processing Fee |
| IOB Micro One | Up to Rs.50 Lakh | 12.25% | - Rs.1,000 for loans up to Rs.10 Lakh - Rs.5,000 for loans from Rs.10 Lakh to Rs.50 Lakh |
| IOB MSE Plus | Up to Rs.1 Crore | 11.25% - 12.75% | Contact the bank for details |
| IOB SME Mahila Plus | - Up to Rs.1 Crore for Service Enterprise - Up to Rs.2 Crore for Manufacturing Enterprise |
11.75% - 12.00% | Rs.200 per Lakh (maximum Rs.20,000) |
HDFC Bank
| Scheme | Amount | Interest Rate | Processing Fee |
| Business Loan Online | Above Rs.10 Lakh | 10% - 22.50% | Up to 2.00% |
ICICI Bank
| Scheme | Amount | Interest Rate | Processing Fee |
| Business Loan | Above Rs.10 Lakh | - For secured facilities: Up to Repo Rate + 6.00 %(Non PSL) - For facilities backed by CGTMSE: Up to Repo Rate + 7.10% |
Up to 2.00% |
*The interest rate for each loan is determined based on the assessment of business, financials, loan amount and tenure.
Documents Required for a Low Interest Business Loan
To apply for a business loan, you need to have the documents related to yourself and your business in order. Here are some documents which are necessary to get a bank loan for business-
- PAN Card of the company, or individual.
- Identity Proof, which can be the Aadhaar card, Valid Passport, Voter ID, or driving license.
- Address Proof, of both the individual and the business, if not situated in the residence of the entrepreneur.
- ITR or Trade Licence or Sales Tax Certificate or any other document as proof of continuation.
- Bank statements of the company or the entrepreneur or both (last 6 months).
- Income Tax Returns, certified by a CA.
- Memorandum and Articles of Association.
- Proof that the business is owned by a sole proprietor, or the partnership deed.
Conclusion
There are multiple types of business loan schemes that each bank rolls out. There are even various schemes run by the government, like the Mudra loan, which can be availed at any bank.
Depending on the industry and size of the business, you can choose the one that fits you best. And if you want to calculate your EMI before applying for the loan, moneyview’s business loan EMI calculator can help you with that as well.
Business Loan Interest Rate - Related FAQs
The eligibility criteria to apply for a business loan are as follows-
- You need to be either a professional or a business owner
- Your business must be registered with the local government body
- You should be paying taxes for your business
- You should be borrowing the money to be used in your business, and not for personal uses
Business loan interest rates depend on a variety of factors, including the repo rates. They start from as low as 7.95% and may go up to 22.50%.
The government of India has many schemes for supporting upcoming businesses and MSMEs. You can avail them from any public sector bank if your business meets the criteria.
Every business, no matter how big or small, qualifies for a business loan. The only criteria are that the business should be registered and the taxes should be up-to-date.
Yes, professionals looking to set up their private practice can also avail for business loans.