Know more about loans for start-up businesses


There are numerous people in India who have the potential to become bright entrepreneurs. They have all the pre-requisites for a successful business set up except for one key thing – the much needed financial backup.

Financial institutions and banks understand the need of providing a business loan for any kind of businesses, small or big. Now, whether you want to grow your existing business or set up an entirely new one, various reputed institutions come forward to assist you in achieving your dream.

They look after all your financial requirements and give wings to your business to reach the pinnacle of success. Funds for inventories and receivables, funds for new machinery and advertising needs, etc. can be handled by loans given by these institutions or banks.

Features of loans for a start up

Getting a start up business loan is not a tedious task. There are certain eligibility criteria that you need to fulfil, and then you are given a loan. The features of these loans are as below:

  • Requires minimal documentation
  • Get approved without any bottlenecks
  • No kind of collateral or security is needed
  • Flexibility in tenure
  • Convenient EMI options
  • Low rates of interest

Some institutions provide various loan products categorised as:

  • Insta loans (loan of up to 10 lakhs)
  • Fast track loans (loan till 20 lakhs)
  • Business loans (a loan up to 50 lakhs)

Clearing the air regarding business loans

Many people face a plethora of questions and queries with respect to loans provided by financial institutions and banks. Let us put some of them to rest.

  • Banks provide loans to companies which are general start-ups as well as to companies which are being set up in a fresh and novel area.
  • Loans are given for research and development of technology from institutions and banks.
  • Start up business loans are provided for buying machinery and the required equipment. This is called as a term loan.
  • Working capital loans are given for stocking inventory and offering credit to the customers.
  • Start-ups requiring capital assets may make use of the CGTMSE scheme (a framework which allows banks and financial institutions to lend up to 1 crore rupees towards term loans and working capital loans).
  • There are specific schemes offered by banks and institutions which target particular start-ups. For example, Small Industries Development Bank of India provides growth capital and equity assistance funds for SMEs that need capital.

The list of documents required when applying for a business loan at financial institutions and banks are:

  1. Photos
  1. ID proof
  2. Date of birth proof
  3. Signature verification
  4. Residential address proof
  5. Contact number proof
  6. Bank statements along with IFSC code
  7. Proof of income
  8. NACH mandate

When choosing a financial institution for start-up business loans, make sure that the institution has its presence all over the country, and its transactions are clear and well defined. It should provide the necessary legal advice whenever needed with smooth service, and the team should be co-operative.


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