Business loans are unsecured financial assistance provided by banks and NBFCs in India. The primary aim of these is to support the urgent needs of your growing business. Most financial institutions offer term loans and flexi loans to cater to the business needs of a company. Business loans are also called commercial loans. All types of businesses such as a sole proprietorship, privately held company, partnership firms, self-employed individuals and retailers can avail these loans.
Foremost, a business loan interest rate remains fixed throughout the tenure. However, depending on the profile of the borrower, a lender may also offer a floating rate of interest, in which case the interest rate will vary through the tenure of the loan. Typically, rates vary between 11%- 19% (subject to change).
It is also possible to avail business loans even if you have a bad credit rating. A borrower can leverage the application through the status of the revenues, type of business and the assets of the company. In case the assets of the company are more valuable than the loan, banks will not shy away from sanctioning it.
The repayment tenure of the loan is between 1 to 5 years and depends on the ability to repay.