Startup Business Loan

  • Home
  • Loan
  • Startup Business Loan

Business Loan

Startup business loans can be availed by Micro, Small & Medium Enterprises (MSMEs) from a bank, non-banking financial company (NBFC) or any other financial institution to fund business commencement, set-up, or expansion of a current business. Start up loans for new businesses usually come at interest rates of 16% p.a. onwards.


Updated: 14-05-2024 04:19:34 PM

Start up Business Loan Detail

Interest Rate Up to 21% p.a.
Loan Amount Up to Rs. 5 Crores
Loan Tenure Up to 11 years
Processing Fee Up to 6.5% of the sanctioned loan amount + GST

Startup Business Loans Features & Benefits

Following are the key features and benefits of startup business loans:

  • You don’t need any collateral or security to avail of a startup business loan.
  • Startup business loans have flexible repayment tenure.
  • The documentation requirement for business loans for startups is minimal.
  • The funds are instantly disbursed to the bank account of the applicant.
  • The applicable business loan interest rate depends on the applicant’s credit history.

Startup Business Loan Eligibility

The start up loan eligibility criteria differs from one lender to another. Following are some generic startup business loan eligibility criteria:

  • The applicant should not be aged below 21 years when applying for the new business start up loan the maximum age should not be above 65 years when the loan matures.
  • The applicant should be an Indian citizen.
  • The applicant must have a well-drafted business plan.
  • The concerned startup must be a sole proprietorship, partnership firm, private/public limited company or a limited liability partnership.
  • The applicant should have a credit score of 750 or above.
  • The applicant should not have any previous loan defaults with any lender.
  • The total turnover of the business should not be more than Rs. 25 Crores.

Documents Required for Startup Business Loans

You will need the following documents to apply for a small business loans startup:

  • Duly filled application startup loan application form.
  • Recent passport-sized photographs.
  • KYC documents of the applicant as well as co-applicants including Passport, Aadhaar Card, Voter ID Card, PAN Card, Driving License, and Utility Bills.
  • Self-drafted Business Plan.
  • Bank statement of the last 12 months.
  • Last 1 year’s Income Tax Return.
  • Business address proof as well as PAN Card.
  • Business Incorporation Certificate.
  • Any other document as required by the lender.

Banks Offering Startup Business Loan

Following are some of the best banks that offer instant business loan for startup:

Lender’s Name Rate of Interest
HDFC Bank Starting from 15.75% p.a. onwards
Kotak Mahindra Bank Starting from 17% p.a. onwards
Fullerton India 17% p.a. to 21% p.a.
TATA Capital Starting from 19% p.a. onwards

HDFC Bank’s Key Features

  • Loan amount available of up to Rs. 40 Lakhs (Rs. 50 Lakhs in select location).
  • Rate of interest starting from 15.75% p.a.
  • A processing fee of 0.99% of the sanctioned loan amount will be levied by the bank.
  • Repayment tenure of 1 to 4 years.

TATA Capital Key Features

  • Loans amount available between Rs. 5 Lakhs to Rs. 75 Lakhs.
  • Rate of interest for this start up financing starts from 19% p.a.
  • A processing fee of up to 2.50% of the sanctioned loan amount plus GST will be levied by the bank.
  • Repayment tenure of 1 to 3 years.

Kotak Mahindra Key Features

  • Rs. 3 Lakhs to Rs. 75 Lakhs startup business loan without collateral available.
  • Fund against credit card receivables (FCCR) also available up to Rs. 3 Crores.
  • Processing fee up to 2% of the loan amount plus applicable taxeswill be charged.
  • Repayment tenures of up to 4 years available.

Fullerton India Key Features

  • Unsecured business loan for startup up to Rs. 50 Lakhs can be availed.
  • Repayment tenure of up to 5 years is available.
  • The processing fee is up to 6.5% of the loan amount plus applicable GST.

View and improve your credit score -
for free.

  • Know how good your score is
  • Get insights on how to improve it
  • Unlock offers as per your score
Evaluate Now

Looking for Best business Loan Offer?

Fill the form by clicking on Apply Now Button and compare latest Interest Rate of all Banks/NFBCs for Instant and Quick Personal Loan Disbursal.

Startup Business Loan FAQs

Yes, you must have a credit score of at least 650 or above to avail a business loan.

Currently, IDFC FIRST offers the lowest rate of interest for a startup business loan at 12% p.a. interest rate.

Yes, the age of the applicant should be between 20 to 65 years to apply for a startup business loan.

There are broadly two types of sartup business loans offered by lenders, i.e. term loans and working capital loans. All startup business loan schemes fall under any one of these categories. Term loans can be used for expanding your business, purchasing machinery, and launching a new project. These loans can come with repayment tenure of 1 year and 10 years. Working capital loans are short-term loans that have to be paid back within a year time and can be used for rent payment, salary payment of employees, stocking up inventories, eand so on.

You can avail a maximum MSME startup loan of Rs. 5 Crores under a startup business loan. The maximum loan amount available depends on the lender and other factors like annual turnover of the company, applicant’s credit history, etc.

Yes. Most lenders require a well-drafted business plan when applying for a startup business loan. Make sure that your business plan is well executed and detailed with the feasible business objectives. The business plan must clearly state how the loan amount is going to be used.

Some banks may provide you small business start up loans even on bad credit. However they may offer these loans at a higher interest rate for shorter loan tenure. In addition, they will also ask you to bring in a guarantor/co-applicant with a good CIBIL score.

There are multiple government-offered startup business loan schemes. The most popular schemes are as mentioned below:

  • Startup India Scheme
  • Standup India
  • Mudra Loan under PMMY
  • Bank Credit Facilitation Scheme

Yes, you can avail of SBI startup loan under various schemes like Stand Up India, Simplified Small Business Loan, machinery loan for startup, Surya Shakti Solar Finance, startup loan for new business SBI, and so on.