Business Loans

Most banks want two to three years of operations with filed returns. NBFCs and fintech lenders will consider one year, and some go to six months for businesses with strong digital transaction records. Newer businesses generally need either a CGTMSE-backed facility or collateral to secure funding at reasonable cost.

Yes, through CGTMSE-backed lending for eligible micro and small enterprises, now up to ₹5 crore, or through unsecured business loans from NBFCs at higher rates. Be aware that a personal guarantee from promoters is almost always required even on collateral-free facilities, so your personal assets are not fully insulated.

Secured term loans and loans against property for business typically run 9.5% to 13%. CGTMSE-backed lending sits around 11% to 15% including the guarantee fee. Unsecured business loans from NBFCs commonly run 16% to 24%. Working capital limits are priced on the sanctioned limit but charged on utilisation, so the effective cost depends on how much you actually draw.

Lenders look at declared turnover and profit from your returns, bank statement conduct over twelve months, GST filing consistency, existing borrowings, promoter credit scores and business vintage. Bank statement conduct matters more than most applicants realise — cheque returns, frequent overdrawn balances and irregular deposits weigh heavily even when the profit and loss looks healthy.

It is usually the cheapest large-ticket option if you own property, at several percentage points below unsecured business lending, with tenures up to fifteen years. The trade is real though: business risk becomes personal asset risk. Consider whether the business could service the EMI through a bad year before pledging a property your family lives in.