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High FDI inflows, advent of trailblazing technology, internet revolution and significant reforms in business policies in India are some prominent factors that are influencing investors from all over the world to invest in India. Today, in the context of 'ease of doing business' India holds 63rd position where in past few years, the growth of startups and micro industries has been phenomenal. Significant thing is that startups and micro industries are not only rising in metro cities but also rising in tier-2 and tier-3 cities of the country.
Here notable fact is that 90% startups fail in the country due to several reasons like- lack of understanding of market, fluctuation in market, bad timing, lack of fund, loopholes in business planning, lack of dexterous human resource, etc. Here lack of fund is one of the core reasons for business failure, this is where significance of business loan for startup comes into the picture. Business loan is like a savior for business owners that help them to eradicate many bottlenecks in the growth of the business. In India, many public and private banks provide business loan for startup, but choosing top banks for business loan is a difficult, where you need to do a lot of analysis. This blog aims to highlight top banks of India provide easy business loan for startups.
List of Top Banks in India Provide Easy Business Loan for Startups:- State Bank of India
- HDFC Bank
- Axis Bank
- ICICI Bank
- State Bank of India provides easy business loans for small and medium size enterprises. Business owners, professionals, and self-employed person can apply for business loan from SBI.
- The Bank offers minimum loan of Rs.10 lakh, and the maximum loan of Rs.50 lakhs.
- Minimum five years of business existence is necessary to get business loan from SBI.
- It is mandatory to have current bank account of any bank for the last two years
- Mandatory to maintain minimum average balance of Rs. 1 Lakh.
- The duration of repayment is up to 60 months
- The loan processing fee of SBI is is 1% of loan amount, max up to Rs 10 Lakh.
- According to bank policy, interest rate varies from 9.05% to 16.30%.
- HDFC Bank provides easy business loan for startups up to Rs 40 lakh. Significant thing is that the bank offers this loan without any collateral, guarantor, or need of security.
- Business must remain in profit in last two years.
- Minimum and maximum loan amount is Rs. 50,000 and Rs. 50,000,00 respectively.
- Minimum and maximum duration of repayment is 1 year and 4 years respectively.
- The loan processing fee of HDFC is 2.5% of loan amount + GST, as applicable.
- Prepayment charge is 2% when loan is settled after three years.
- Bank charges 2% per month late EMI interest on the delayed amount and minimum fee is Rs. 200
- Prepayment charges are 3% and 4%, if the loan is closed between 25 months-36 months, and 7 months-24 months respectively.
- Cheque swapping charges and Amortization schedule charges are Rs.500 and Rs.200 respectively.
- Axis Bank provides easy business loan for startups at competitive interest rates.
- The bank offers business loan to professionals like engineers, doctors, CAs to practice their service and to purchase office space and equipments
- The business must be partnership, proprietorship, LLP, and Pvt. Ltd, Company business; and its minimum annual turnover must be Rs.30 Lakhs.
- Minimum and maximum loan amount is Rs.50,000 and Rs 50 lakhs respectively.
- Person who wants business loan from axis bank, he/she must be in age group 21 to 65 years and mandatory three years of minimum experience in running business.
- Bank determines interest rates according to your business profile, financial assessments, former track record, and tenure.
- Maximum duration of repayment is 15 years.
- The loan processing fee of Axis Bank is 1.25 - 1.50 percent of loan amount
- In case of check bounce bank charges ₹500 plus applicable taxes and penal interest of 2% per annum on the current rate of interest
- ICICI Bank provides Easy business loan for startup where the bank follows excellent documentation method and manageable repayment option.
- The bank provides loan as working capital, term loans, or composite loan.
- Minimum and maximum loan amount is Rs. 1000,00 and Rs 40 lakhs respectively.
- The bank provides loan according to last one-year income tax return, audited financials of the last 3 years, current year performance and turnover. In addition, you also need to provide bank statements for the latter six months.
- The bank also provides overdraft facility on business loan and maximum duration of repaying the business loan is 7 years.
- The loan processing fee of ICICI bank is up to 2% of loan amount.
- According to the bank policy, interest rate on business loan is 10% to 11%.
- The bank offers minimum guarantee fee for women enterprises in the north eastern region, which is 0.75% - 0.85%.
In today's competitive socio-economic landscape, if you want to make your startup successful, then you need to invest your time and money in right direction. Today, there is a great significance of legal services for business. Legal services like trademark registration, GST registration and company registration ensures numerous benefits for business. These legal services not only make your business secure financially and legally but also proves helpful in getting business loan, raising funds, and escalating business globally.
Apart from above four banks, to encourage startup ecosystem in the country, Government of India has also introduced various business loan for startup. Business loan by the Government of India has numerous benefits including zero collateral required, flexible repayment tenures, Interest rate depends on credit score, Instant disbursal of loan and minimal documentation. Ambitious and diligent entrepreneurs who want to escalate the growth of their business and monetize new idea to generate profit, they can avail these business loan under Credit Guarantee Scheme (CGS), Pradhan Mantri Mudra Yojana (PMMY), Stand Up India Scheme, and Coir Udyami Yojana.
Read Also:
Eight Golden Rules to Make Your Startup Successful
Five Significant Advantages of Trademark Registration for Startups
Top Five Advantages of GST Registration for Startups in India
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