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A business loan is a financial product where banks, NBFCs, or fintech lenders provide capital to: Start a new business Expand or upgrade an existing business Cover working capital or operational expenses Buy inventory, machinery, or office space It can be secured (with collateral) or unsecured (without collateral).
Features of Business Loan
A business loan offers financial support to entrepreneurs and business owners to meet various business-related expenses such as working capital, expansion, equipment purchase, or inventory management. These loans are available in both secured and unsecured forms, depending on the lender’s policy and the borrower's profile. Loan amounts typically range from ₹50,000 to ₹2 crores or more, with flexible repayment tenures between 1 to 7 years. Interest rates are competitive, starting from around 9% per annum, and are influenced by factors such as the borrower’s credit score, business performance, and the nature of the loan. One of the major advantages of business loans is their quick processing and fast disbursal—often within 24 to 72 hours—especially when applied online. The documentation required is generally minimal, including KYC documents, proof of business, financial statements, and bank records. Many lenders also offer prepayment and foreclosure options, with little to no additional charges. Additional benefits may include top-up loan facilities and credit score improvement through consistent repayment, making business loans a practical and accessible funding option for growth-oriented businesses.