Getting funds for business growth doesn’t always require property or assets as security. In India, many banks and NBFCs now offer business loans without collateral, making it easier for MSMEs, startups, and small traders to access capital.
This 2026 guide explains eligibility, interest rates, documents, top lenders, and how to apply smartly.
What Is a Business Loan Without Collateral?
A business loan without collateral (also called an unsecured business loan) is financing provided without pledging property, gold, or fixed assets. Approval is primarily based on income, cash flow, business stability, and credit profile.
Best for: Working capital, inventory purchase, expansion, marketing, or equipment.
Who Can Apply? (Eligibility Criteria)
Most lenders consider the following:
- Indian citizen, age 21–65 years
- Business vintage 1–3 years (varies by lender)
- Minimum monthly turnover (bank/NBFC specific)
- CIBIL score 650+ preferred
- Stable bank statements
👉 If your credit score is low, first work on INTERNAL LINK: Credit Score Improvement Tips before applying.
Documents Required
Prepare these for faster approval:
- PAN & Aadhaar
- Business proof (GST, Udyam/MSME certificate)
- Bank statements (last 6–12 months)
- ITRs (1–2 years) or income proof
- Address proof
Interest Rates & Charges (2026)
| Lender Type | Interest Rate (Approx.) |
|---|---|
| Public/Private Banks | 11% – 18% |
| NBFCs | 14% – 28% |
| Digital Lenders | 16% – 36% |
Other charges: Processing fee (1–3%), prepayment charges (varies).
Top Banks & NBFCs Offering Collateral-Free Business Loans
- SBI
- HDFC Bank
- ICICI Bank
- Axis Bank
- Bajaj Finserv
- Tata Capital
- Lendingkart, Indifi (digital NBFCs)
📌 Always compare offers before applying.
Pros & Cons
✅ Pros
- No asset risk
- Faster approval
- Flexible end-use
❌ Cons
- Higher interest than secured loans
- Lower ticket size
- Credit-score sensitive
Smart Alternatives You Should Consider
Sometimes, unsecured loans aren’t the cheapest option. Depending on your profile, check:
- Home Loan Eligibility Calculator (for property buyers planning finances)
- Personal Loan Interest Rates Comparison (quick funding for short needs)
- Loan Against Property Options (lower interest if you own property)
How to Increase Approval Chances
- Reduce existing EMIs
- Maintain clean bank statements
- Apply with a co-applicant (if allowed)
- Choose the right tenure
- Avoid multiple applications at once
FAQs
Q1. Can startups get a business loan without collateral?
Yes, if revenue and bank statements are stable. Some NBFCs focus on startups.
Q2. Is GST mandatory?
Often yes for higher amounts, but some lenders offer non-GST options at higher rates.
Q3. What if my CIBIL is below 650?
Approval is limited. Improve your score first via INTERNAL LINK: Credit Score Improvement Tips.
Final Thoughts
A business loan without collateral is ideal for entrepreneurs who need quick capital without risking assets. Compare lenders, understand charges, and choose a tenure that keeps EMIs comfortable.