A business loan is a lending product offered by various banks and financial institutions. The borrowed amount can be utilized for several purposes including purchasing new inventory or business expansion and other business-related purposes. No matter whether the borrower is a wholesaler, manufacturer or retailer, a business loan can help the borrower to meet the daily operational needs of the business.

1. Business Loan In India

2. • Many banks and NBFCs provide business loans to
fulfill the financial needs of enterprises and self-
employed individuals. However, a business loan
can be provided to the MSMEs, individuals, SMEs,
entrepreneurs, business owners, professionals
such as chartered accountants, doctors, CS,
architects, and other business entities.
• A business loan can be classified into two
divisions I.e., secured loan and unsecured loan.

3. • Secured loans are a type of loans that require security
or collateral, that an individual has to deposit with the
bank to get a business loan whereas in unsecured loans
an individual does not require to pledge any assets or
collateral with the lender, or NBFC.
• Banks provide both secured loan and unsecured
business loans such as working capital loan, equipment
finance, term loan (short term and long term), cash
credit, letter of credit, overdraft, machinery loans, loan
under government schemes, POS loans, bill or invoice
discounting, loan under bank guarantee, etc...

4. • The minimum loan amount provided to start a
business is Rs. 30,000 that can be taken by
Regional Rural Banks (RRBs), Small Finance
Banks (SFBs), or Micro Finance Institutions
(MFIs).
• The individual can get collateral-free loans up
to Rs. 1 crore from the public sector banks and
lending institutions.