What is Business Loan Full Details
A business loan is a type of financing provided by a financial institution or lender to a business or entrepreneur to help them start, grow or expand their operations. Business loans can be used for a variety of purposes, such as purchasing equipment or inventory, expanding operations, hiring employees, or covering short-term cash flow needs.
Business loans typically have a fixed interest rate and a fixed repayment period, and the lender will typically require some form of collateral, such as property or equipment, as well as financial statements and business plans to be provided by the borrower. What is Business Loan
Type Of Business Loan
There are several types of business loans available, including:
- Term loans: These are the traditional type of business loan, where a lump sum of money is borrowed and repaid over a fixed period of time, usually with fixed monthly payments.
- Line of credit: This type of loan allows a business to borrow up to a certain limit as needed, and only pay interest on the amount borrowed.
- SBA loans: The Small Business Administration (SBA) guarantees loans made by participating lenders to small businesses, which can make it easier for those businesses to qualify for financing.
- Equipment financing: This type of loan is used specifically to purchase equipment, such as machinery or vehicles, for a business.
- Invoice financing: This type of loan is used to help businesses access cash flow by using their outstanding invoices as collateral.
- Merchant cash advance: This type of loan is typically used by businesses that process credit card transactions, and it is based on the amount of credit card sales that a business processes.
- Microloans: This type of loan is designed for small businesses and entrepreneurs, typically providing smaller amounts of money, with shorter terms and lower interest rates.
- crowdfunding: This type of loan is typically used by businesses that raise small amounts of money from a large number of investors, typically via the internet.
Business loan company in india
There are several companies in India that provide business loans to entrepreneurs and small businesses. Some of the major players include:
- State Bank of India (SBI): The largest and oldest commercial bank in India, SBI offers a wide range of loan products for small and medium-sized enterprises (SMEs).
- HDFC Bank: One of the largest private sector banks in India, HDFC offers a variety of loan products for small and medium-sized businesses, including working capital loans, term loans, and business vehicle loans.
- ICICI Bank: Another major private sector bank in India, ICICI offers a variety of business loan products, including working capital loans, term loans, and equipment financing.
- Axis Bank: A private sector bank in India, Axis Bank offers a variety of loan products for small and medium-sized businesses, including term loans, working capital loans, and equipment financing.
- Bajaj Finserv: A leading non-banking financial company (NBFC) in India, Bajaj Finserv offers a variety of loan products for small and medium-sized businesses, including term loans, working capital loans, and equipment financing.
- MUDRA Bank: Micro Units Development and Refinance Agency Bank is a government of India initiative to provide funding to small businesses and entrepreneurs in India.
These are some of the major players, however, there are many other Banks and NBFCs that provide business loans in India. It’s important to do your own research and compare the terms and interest rates of different lenders to find the best option for your business.
Business Loan Interest Rates – January 2023
| Bank/NBFCs | Interest Rate | |
| Axis Bank | 14.95% – 19.20% p.a. | |
| Bajaj Finserv | 9.75% – 25% p.a. | |
| Flexiloans | 1% per month onwards | |
| HDB Financial Services Ltd. | Up to 36% p.a. | |
| HDFC Bank | 10% – 22.50% p.a. | |
| IDFC First Bank | 15% p.a. onwards | |
| Indifi | 1.50% per month onwards | |
| Kotak Mahindra Bank | 16% – 19.99% p.a. | |
| Lendingkart | 1% – 2% per month | |
| Mcapital | 2% per month onwards | |
| NeoGrowth Finance | 19% – 24% p.a. | |
| Tata Capital | 12% p.a. onwards | |
| UGRO Capital | 14.90% p.a. |
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