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-

  1. PAN Card of the company, or individual.
  2. Identity Proof, which can be the Aadhaar card, Valid Passport, Voter ID, or driving license.
  3. Address Proof, of both the individual and the business, if not situated in the residence of the entrepreneur.
  4. ITR or Trade Licence or Sales Tax Certificate or any other document as proof of continuation.
  5. Bank statements of the company or the entrepreneur or both (last 6 months).
  6. Income Tax Returns, certified by a CA.
  7. Memorandum and Articles of Association.
  8. 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-

  1. You need to be either a professional or a business owner
  2. Your business must be registered with the local government body
  3. You should be paying taxes for your business
  4. 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.

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