A personal loan without cibil score is helpful for people who do not have a credit history or have a low CIBIL score in India. Starting or expanding a small business in India requires proper funding. A business loan for small business owners helps entrepreneurs manage working capital, purchase equipment, or grow operations without financial stress.
In this article, you will learn about business loan eligibility, documents required, interest rates, and how to apply for a business loan in India easily.
What is a Business Loan?
A business loan is a financial product designed specifically for self-employed individuals, MSMEs, startups, and small business owners. These loans can be used for:
- Business expansion
- Purchase of machinery
- Inventory management
- Working capital needs
Unlike personal loans, business loans are evaluated based on business income and stability.
Who Can Apply for a Business Loan in India?
Business loans are available for:
- Small business owners
- Shopkeepers and traders
- Self-employed professionals
- MSME and startup owners
Both new and existing businesses can apply depending on lender policies.
Business Loan Eligibility Criteria
Most lenders follow these basic eligibility conditions:
- Age between 21 to 65 years
- Indian citizen
- Business operational for at least 1 year
- Regular business income
- Valid bank account
Some lenders may offer loans even with low or no CIBIL score based on business performance
If you are self-employed or running a small business, you can also explore a business loan for small business in India as an alternative funding option. Documents Required for Business Loan
To apply for a business loan, you may need:
- Aadhaar Card
- PAN Card
- Business registration proof
- Bank statements (last 6–12 months)
- GST returns (if applicable)
Digital lenders may approve loans with fewer documents.
Business Loan Interest Rates & Charges
Interest rates vary based on business profile and lender type:
- Interest rate: 11% to 30% per annum
- Processing fee: 1% to 3%
- Prepayment charges may apply
NBFCs usually have faster approval compared to traditional banks.
Types of Business Loans in India
Working Capital Loan
Used to manage daily business expenses like rent, salaries, and inventory.
Equipment or Machinery Loan
Ideal for purchasing tools, machines, or technology required for business operations.
MSME & Government Business Loans
Government-backed schemes offer loans with lower interest rates and flexible repayment options.
Can You Get a Business Loan with Low CIBIL Score?
Yes, some NBFCs and digital lenders offer business loans even with low or no CIBIL score. They evaluate:
- Monthly business turnover
- Cash flow
- Bank transaction history
However, interest rates may be slightly higher. If your credit score is low or unavailable, you may also consider a personal loan without CIBIL score for urgent financial needs.
Benefits of Business Loan for Small Business
- No collateral required in many cases
- Flexible repayment options
- Quick approval and disbursal
- Helps improve business cash flow
FAQs on Business Loan in India
How much business loan can I get?
Loan amount depends on business income and lender policies.
Is GST mandatory for business loan?
Not always. Small businesses without GST can also apply.
Can I apply online for business loan?
Yes, many lenders offer fully online application and approval.
Disclaimer
Business loan approval depends on lender policies, applicant profile, and documentation. Interest rates and terms may vary.