The best banks to avail a Business Loan in India [In June 2020]

Looking for the best bank for a business loan in India? Here’s a list of top public and private sector banks that offer Business Loans with low-interest rates and quick disbursement of funds.

Important Disclosure

The banks we mention here are rated in no specific order but we have tried our best to help you make an informed business decision. This list is prepared to help the needs of small and medium business and entrepreneurs who are willing to start their own enterprises! Large scale enterprises may not find this list helpful.

To find out the best bank for a business loan in India we measured and rated banks on the basis of factors that include :

  1. Easy of Application (Documentation)
  2. Disbursal Period (Time to disburse funds after application)
  3. Eligibility Requirements
  4. Rate of Interest
  5. Permitted Tenure
  6. Collateral Requirement
  7. Public Feedback

So enough of the talks…

These are some of the best banks for a business loan in India:

1. HDFC BANK

hdfc loan
HDFC bank offers various loans for Small and Medium Enterprises.

HDFC Bank has always been a leading bank for thousands of Small and Medium Enterprises all over the country! The bank offers various business loans as per your need. Loans include Working Capital Loans and Other Term Loans. For the most difficult time in your business you can also avail loan against assets.

Here’s why the HDFC Bank is definitely one of the best banks for business loan India :

  1. Simpler Loan Application
  2. Quick Fund Disbursal
  3. Interest Rate 15% (approx)
  4. Processing Fee 1-2.5%
  5. Around 13,514+ Branches Across India
  6. Tenure 1-4 years
  7. Loan Amount 50,000-50,00,000
  8. Preclosure allowed after 1 year with charges of about 2%
  9. Lowest EMI per lakh 2628
  10. No part payment allowed

2. STATE BANK OF INDIA

SBI is the largest public sector bank in India. It is, in fact, the largest Indian Bank. The SBI Business Loan shall always be your first choice! But, it is not that easy to avail loan from SBI.

The SBI offers a variety of loans for businesses. Being a public sector bank the State Bank of India also offers various loans for small scale businesses such as the PM Mudra Yojana.

SBI has recently introduced a new Simplified Small Business Loan Scheme which you read about! Go ahead and have a look.

What makes SBI the best bank for a business loan in India?

  1. Lucrative Interest Rate (Around 11-12% Lowest)
  2. Quick Fund Disbursal
  3. Collateral Free Loans Available
  4. A huge network of around 24,000+ branches in India & 200+ overseas branches.
  5. Low Processing Fees
  6. E-Payment and Application
  7. Loan Tenure 1-4 years
  8. Lowest EMI per lakh 2594
  9. Loan Amount 50,000 to 100 Cr
  10. Pre-Closure Allowed with 3% Charges
  11. Part Payment Allowed at 3% Charges

3. IDBI BANK

IDBI is also a public sector bank and they offer various loans to promote growth of Industries across the nation. You’ll have to visit their local branch to find out the details. Their website sucks! Always.

Here’s why should consider IDBI bank to avail your next business loan:

  1. Lucrative Interest Rate of 12.55% (approx)
  2. 1% Processing Fee
  3. Tenure 1 – 5 Years
  4. Loan Amount 50,000 to 5,00,000
  5. Lowest EMI per lakh 2237
  6. Loan Amount 1-5 Lakh
  7. Part Payment Allowed
  8. Preclosure of loan allowed with 2% charges if closed within 6 months of sanction. Nil loan foreclosure charges after 6 months
  9. The bank has 1892 branches in India and an overseas branch in Dubai

4. ALLAHABAD BANK

The Allahabad Bank offers a competitive advantage over other banks. The interest rate and processing fees are low. You may save thousands of bucks over the years as the interest rate on business loans is as low as 11.15%.

Image Credits: Allahabad Bank – The use of low-resolution images of logos for certain uses involving identification and critical commentary qualify as fair use. All Rights Reserved by the respective owner(s).
Image Source: Website of Allahabad Bank
  1. Low Rate of Interest (around 11.15% approx)
  2. Low Processing Fees (Rs 229 per lakh – With a minimum of 2038 and maximum of 22928
  3. Loan Tenure 1 Year – 7 Year
  4. Loan Amount 1 lakh – 5 Cr
  5. Lowest EMI per lakh 1720
  6. Part-Payment Allowed with 2.25% charges
  7. Pre-Closure Allowed with 2.25% charges
  8. The bank has 3245 branches across India

5. PUNJAB NATIONAL BANK

Punjab National Bank is one of the most credible and trusted bank by thousands of enterprises around the country. The bank has variety of loan offers to suit your business needs. The application is simpler and bank offers quick disbursal. If your finincial need is below 15 lakh give it a try.

Here’s why the PNB is one of the best banks for business loan in India:

  1. Low Rate of Interest 12.65%
  2. Processing Fees 1.8% + taxes
  3. Loan Tenure 1-5 Years
  4. Loan Amount 50,000 to 15,00,000
  5. Lowest EMI per lakh 2257
  6. Part Payment allowed (Nil Charges)
  7. Pre Closure allowed (Nil Charges)
  8. The bank 10,910 branches across India

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6. BANK OF BARODA

The Bank of Baroda Offers many loans to various small and medium scale enterprises. You may explore all loans by Bank of Baroda here.

Image Credits: Bank of Baroda – The use of low-resolution images of logos for certain uses involving identification and critical commentary qualify as fair use. All Rights Reserved by the respective owner(s). Image source: http://www.bankofbaroda.com/download/annualreport.pdf
  1. Rate of Interest 14.10%
  2. Low Processing Fees 1%
  3. Loan Tenure 1-3 Year
  4. Loan Amount 1-2 Lakh
  5. Part Payment Allowed after 1st EMI -Nil Charges
  6. Pre Closure Allowed after 1st EMI – Nil Charges
  7. Lowest EMI Per lakh 3423
  8. The bank 9482 branches across India

7. ORIENTAL BANK OF COMMERCE

With just 11.40% interest rate and 0.5% processing fees OBC has made it in our list of best banks for business loan in India.

  1. Interest Rate 11.40%
  2. Lowest Processing Fees 0.5%
  3. Loan Tenure 1-7 Year
  4. Loan Amount up to 2 Cr.
  5. Part Payment allowed (Nil Charges)
  6. Pre Closure Allowed (Nil Charges)
  7. Lowest EMI per lakh 1733
  8. The bank has 2390 branches across India

8. DCB BANK

DCB Bank has very few branches in India but if you have a branch in your locality, You got lucky!!

The bank has the lowest rate on interest on business loan – JUST 10.70%

The bank offer huge loan tenure of upto 15 Years!

So, DCB might be the best bank for business loan in India. But, it has its limitations when it come to loan amount and reach.

DCB Bank
  1. Lowest Interest Rate 10.70%
  2. Low Processing Fees 2%
  3. Extensive Tenure 1 Year to 15 Years
  4. Lowest EMI per lakh 1118
  5. Part Payment Allowed after 6 months with charges 4% -6%
  6. Pre Closure Allowed after 6 months with charges 4% – 6%
  7. Loan Amount – Data Currently Unavailable
  8. The bank has only 336 branches in India

9. SYNDICATE BANK

Syndicate bank has an advanatege if you ever wish to pre-close or part pay your loan. The bank has Nil charges for preclosure. This can be a great option for many. Also, rate of interest and processing fees are minimal.

  1. Rate of Interest 12.65%
  2. Low Processing Fees 0.5% with a minimum of 500
  3. Loan Tenure 1-5 Years
  4. Loan Amount 50,000-5,00,000
  5. Lowest EMI per lakh 2257
  6. Part Payment Allowed (Nil Charges)
  7. Pre Closure Allowed (Nil Charges)
  8. The bank has 4063 branches across India

10. CORPORATION BANK

Now merged to the Union Bank, the corporation bank branches offer you loans at terms described below. Similar to syndicate bank the corporation bank levy no charges for pre-payment and part-payment of loan. You can always pre-close the loan!

  1. Rate of Interest 13.55%
  2. Processing Fees 1.5%
  3. Loan Tenure 1-7 Years
  4. Loan Amount 2 Lakh – 5 Cr
  5. Lowest EMI per month 1849
  6. Part Payment Allowed (Nil Charges)
  7. Pre Closure Allowed (Nil Charges)
  8. The bank has 4724 branches across India

11. BANK OF MAHARASHTRA

Bank of Maharashtra doesn’t offer bigger loans to businesses. The bank focuses on providing loans to small businesses.

BANK OF MAHARASHTRA

Wondering of what makes Bank of Maharashtra one of the best banks for a business loan in India? – It’s presence in ruler areas. BoM has most of its branches in ruler areas. Here are some details:

  1. Low-Interest Rate 14.5%
  2. Low Processing Fees 1%
  3. Loan Tenure 1-3 Year
  4. Loan Amount 50,000 to 1,50,000
  5. Part Payment Allowed
  6. Pre Closure Allowed (Nil Charges)
  7. Lowest EMI per lakh 3442
  8. The bank has 1900 branches across India

12. INDUSIND BANK

IndusInd Bank offers loans up to 15,00,000. The bank also offer loans under various governmental schemes for first time entrepreneurs. Loans include schemes such as the Mudra Yojana and Stand Up India Schemes.

  1. Rate of Interest 14%
  2. Processing Fees 2.5%
  3. Loan Tenure 1-5 Years
  4. Loan Amount 50,000 – 15,00,000
  5. Lowest EMI per lakh 2327
  6. Part Payment not allowed
  7. Pre Closure Allowed after 12 EMI’s with 4% charges
  8. The bank has around 1558 branches across India

13. UNITED BANK OF INDIA

With it’s 2000+ branches across India the United Bank provides thousands of businesses an easy access to credit. The bank offers loans upto 50 lakhs.

  1. Rate of Interest 13%
  2. Low Processing Fee 1.15%
  3. Loan tenure 1 – 5 Year
  4. Loan Amount 5 Lakh – 50 Lakh
  5. Lowest EMI per lakh 2275
  6. Part Payment allowed with charges 2% of the outstanding balance.
  7. Pre-closure allowed with charges 2% of the outstanding balance.
  8. The bank has 2054 branches across India

Conclusion

Though I’ve made an effort to summerise a list of the best bank for a business loan in India, it’s up to you to make the final decision! You can go through the details of each of the above-mentioned bank details. Look for a bank that has a branch in your locality. Visit their websites. Take a calculator and get going. Plan your finances and start preparing your DPR!

I’d suggest you’ll to always prefer public sector banks for your funding! Private Sector Banks and NBFC’s can be a secondary option but cautious!

IF YOU HAVE ANY QUESTIONS PLEASE LET ME KNOW DOWN IN THE COMMENTS!

Would you be interested if I’m willing to invest in your venture?

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2 Comments

  1. Nice post. Thanks for details.

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