Apply for a business loan in just 5 minutes with Lendingkart!

What is a business loan?

A business loan is basically a borrowed amount of capital that is used for an investment in a new or existing business set up. Whether small or medium-sized enterprises (SMEs) or large businesses, it is absolutely important to understand how these loans work.

From the people involved, the formalities, benefits, to the risks, terms and conditions – all the aspects require your utmost attention before you proceed to take a loan. Proceed and learn about them below with us!

Features of Lendingkart Business Loan

  1. Get Business Loans up to ₹ 2 Crore

    We offer business loans of ₹ 50,000 up to ₹ 2 Crore to eligible SMEs. Our wider loan window increases the chances of business loan approval and provides you the funds needed for growth and expansion of your venture.

  2. Superfast Business Loan Processing

    We have taken loan processing times to the next level through our Online Only loan application process. It allows us to by-pass a lot of manual work and provide same-day loan approvals.

  3. Fast Turnaround Time and Disbursals

    Lendingkart’s offers business loans faster than the 59 Minute Business Loan scheme. With our online business loan processing, you can get a business loan within 3 days as opposed to 8-10 days taken by banks.

  4. No collateral required

    A business loan from Lendingkart does not put your valuable assets on risk. We offer unsecured business loans that do not require any collateral or security. So, you don’t have to worry about developing your capital assets anymore.

  5. Fair interest rates

    Lendingkart uses proprietary big data and machine learning tools to determine the lowest interest rates on business loans, on a case to case basis. This means, the interest rates you get from Lendingkart are the best ones available for your business.

  6. Extended Loan Tenure

    Our loan tenure of minimum 1 month and maximum 36 months, vastly extends the credit relief for your business. If you are facing temporary Business problems, a business loan tenure of 6 months or more can give you the necessary buffer for resolving operational issues.

  7. No Hidden Costs

    Lendingkart business loans promise zero hidden costs and charges. We only levy a one-time processing fee of 2-3% based on your loan ask and that’s all. This allows you to retain more of the principal amount for business growth.

  8. Flexible Repayments

    Last but not the least, Lendingkart business loans can be repaid in monthly or bi-weekly EMIs. Our EMI options allow you to pace your repayments as per your invoicing and sales cycle, for example, if your sales are going great, you can repay your business loan two times faster with the bi-weekly EMI option.

Benefits of Business Loan by Lendingkart

– Faster processing:

Faster processing means faster credit for your business, allowing you to explore new horizons and exploit opportunities as they come your way. A timely business loan can expand your marketing potential, speed up your operations, and eventually increase your profit margins.

– Preserving your ownership:

Since it is an unsecured business loan, you are at no risk of losing valuable assets or giving up precious company stock in lieu of investment. So, a Lendingkart business loan allows you to preserve your ownership while also providing you with the funds to grow your enterprise.

– Streamlines your cash flow:

Lendingkart business loans increase your window of opportunity by providing both capital and time for you to streamline your cash flow and get into profitable territory. These loans allow you to strike a balance between your Business fund and company capital fund by providing investment that can be repaid in instalments.

– Improve your credit score:

An NBFC loan from Lendingkart is the best way to improve your business credit score as we report loan accounts to all credit bureaus. Moreover, a business loan with Lendingkart is especially beneficial for companies witnessing a recent dip in credit score due to unforeseen market conditions.

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Business Loan Fees & Interest Rates

Customized Interest Rates1.5 to 2% per month
Processing Fees2-3%
Loan Tenureup to 36 months
Pre-closure ChargesNil**
Eligibility Criteria> ₹ 90,000 turn over for 3 Months
Loan Amount₹ 50,000 – ₹ 2 crore
InstallmentsFlexible Monthly / Bi-weekly
*Based on the health of your business, revenues and annual turnover
**Pre-closures are only allowed after the first EMI is paid in full

Eligibility Criteria for Business Loan

  1. An established business that has been in operations for more than 6 months.
  2. A minimum turnover of ₹ 90,000 or more in the 3 months preceding your loan application.
  3. The business should not fall under blacklisted / excluded list for SBA finance.
  4. The physical location of your enterprises should not be in the negative location list.
  5. Trusts, NGOs and charitable institutions are not eligible for small business loans.
If you are not sure if your business falls under a restricted category or location, you can contact us to confirm your eligibility

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Documents Required for a Business loan

 ProprietorshipPartnershipPvt. Ltd. / LLP / One Person Company
Bank statement (12 months)docsdocsdocs
Business registration proofdocsdocsdocs
Proprietor(s) PAN Card Copydocsdocsdocs
Proprietor(s) Aadhar Card Copydocsdocsdocs
Partnership Deed Copydocsdocsdocs
Company PAN Card Copydocsdocsdocs
We accept any of the following as a Business registration proof
1) Business Registration Certificate 2) GST filing 3) Gumastadhara 4) Trade License 5) Drug License 6) TIN  7) VAT registration

3 simple steps to your Business loan

  1. Submit Application

    Simply enter your personal, business and financial info to receive a business loan offer.

  2. Upload Documents

    Upload digital copies of your documents in a single step process for verification.

  3. Get Sanctioned

    Receive your business loan approval and disbursal within 3 working days.

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Types of Business Loans

Here’s a list of six most common types of Business Loan for SMEs

  1. Bank Overdraft / Credit Line:

    This facility is available from both banks and online lenders. It allows a revolving credit facility, in which a businessman can withdraw money up to a sanctioned limit from their business account, even if the actual account balance is lower. The excess amount is considered as a business loan, which can be repaid by depositing the same, plus interest, in the account.

  2. Equity Funding

    Business owners can also raise funds by divesting their share in the company in lieu of capital investment. While a popular choice in more advanced markets like the United States, equity funding is a less preferred option in Indian investment market by SMEs, as it accompanies the risk of ownership dilution. In case of equity funding, a business owner can retain the option for buy back of shares in order to get back to preferred ownership levels, once the investment objectives have been met.

  3. Short-term Loans

    These loans have a smaller-ticket size owing to the shorter repayment window. Generally, a short-term loan is given for a period ranging between 3 to 18 months as these loans are meant for working capital finance and limited capital investment. However, Lendingkart offers short-term business loans for a period of 1 to 24 months, increasing the convenience of credit for small and medium enterprises in India.

  4. Equipment Finance

    Equipment finance is a popular means of improving cash flow and working capital. Equipment financing is the use of a loan or lease for purchasing or borrowing hard assets. It is a type of secured business loan because the lender has rights over the equipment in case of a default.

  5. Loan on Accounts Receivables

    Also known as invoice financing, these are very short-term credits, given in lieu of accounts receivables. The shortcoming of this kind of business loans is that they can only be availed by SMEs with commercial customers. The loans tenure generally ends on the invoice due date and require full payment along with interest and processing charges.

  6. Factoring / Advances

    Under this arrangement the money is paid in advance by the factor company to the business for an accounts receivable. However, instead of paying the full amount, a percentage of amount, usually 70% to 90% of the invoice value, is paid. The rest is retained to cover unforeseen charges, breakage, delivery and quality errors. For this kind of business loans, both the buying and selling companies have to come onboard and work with a factoring company.

  7. Trade Creditor

    A supplier who has provided goods or services to your business, but is yet to be paid, is considered a trade creditor. It is a very common arrangement for conducting day-to-day business activities between buyers, suppliers and service providers with long working relationships. The amount due to a trade creditor can also be considered as a very short-term business loan.

Business Loan EMI and How to Calculate It

Business Loan EMI

Different types of business loans can be repaid in different ways. One of the easiest ways to repay a business loan is through Equated Monthly Instalments (EMIs). Your loan is divided into equal fixed sums that are paid on a monthly basis till the full repayment of the loan. 

An EMI consists of two parts, the principal loan amount and the accrued interest. Small and medium businesses find it easier to repay business loans with EMIs, as the method allows them to fund expensive assets and expansions without straining their smaller operating budgets. 

NBFC loan providers like Lendingkart offer flexible business loan EMIs that can help you repay a business loan two-times faster by opting for bi-weekly repayments. With auto-renewal also on offer by Lendingkart, faster repayments mean quicker access to refinance for the same amount or a larger business loan.

How to Calculate Business Loan EMI?

The Business Loan EMI calculation is done on the basis of a simple formula i.e.
E = P x r x (1+r)n/(1+r)n-1
‘E’ is the EMI
‘P’ represents the loan amount
‘r’ stands for the interest rate offered on a monthly basis
‘n’ is the duration of the loan

A business loan EMI calculator is a digital version of this formula, that allows you to calculate EMI amount through a web interface. The business loan EMI calculator can help you understand the breakdown of interest and principal loan amount, thus, allowing you to decide the layout of your cash resource planning.

Do’s and don’t’s of Business loans

Have you explored all other options for managing your Business?

When you go for a business loan, it is because you need capital to fund a critical task. However, a business loan is not the only way to fund your working capital needs, asset acquisition or new business unit. You can also get the necessary investment by adopting cost reduction mechanisms, increasing production and sales to a limited extent, or by using the money in your contingency fund. 

So, consider all your financial options carefully before applying for a business loan. Sometimes it may turn out that you did not need a business loan at all and have ended up with a commercial debt for no reason.

How do you intend to use the loan money?

Deciding how you are going to use the loan amount beforehand can put your business on the front foot, immediately after you receive the loan funds. The money can go directly into funding critical tasks. You can even pre-empt the operationalisation of your growth plans if you have previous working relationship with the lender.

For example, Lendingkart business loans can be renewed upon full repayment, so, you can start a new project immediately after finishing the current one, as your working relationship with Lendingkart will ensure a renewal. On the other hand, not planning ahead can sometimes lead to wastage of loan funds, as they get used for non-critical tasks. For example, you may end up using your working capital loan money for paying an existing debt or for purchasing plant and machinery, which will then create a void in your working capital funds.

Does it benefit your business?

Lastly, any form of capital investment should benefit your business. If you have a plan for repaying the loan and also have an intended use-case for the loan money, but it is not providing meaningful growth to your operations, you should probably think again about taking a business loan. So, sit with your financial planners, operational heads and other business advisors to chart a strategy for growth before you apply for your first business loan.

Business Loan FAQs:

A business loan is a loan taken for investments in a business set up. It is essentially borrowing money for a set purpose and entails repayment with a fixed interest rate.
You can take a business loan to fund your business investments and projects. A business loan can help your business venture to prosper at a faster pace and you can finish stagnant projects immediately.

Yes, we have a very fast loan-lending process with three steps. Application submission, Approval and Disbursal. This process takes a maximum up to three days while banks may take 8-10 working days.

On the other hand, we have very reasonable and lower interest rates. Also, we don’t require any collateral or property for security. It makes our loans unsecured and less risky for you.

We do not take any additional penalty for a loan foreclosure and there are no hidden payments and charges with our business loans.

No, the whole process of taking loans is automated online. The document verification too occurs online and thus provides a hassle-free loan application process.
Lendingkart’s business loans are free from any bias and prejudice as it is an automated process. The loans provided are in equal and fair terms and conditions.
Due to the different ranges of ticket-size we offer at Lendingkart, there are higher chances of a loan approval from us than a bank.
Even though our loans are faster than banks, we urge you to provide correct documents and follow the online application process thoroughly so that the loan approval doesn’t have any stoppages.
You can apply for a business loan on Lendingkart online. The process to be followed is noted in the section above.
You can check your application status at your Lendingkart account after login. It will be notified at the dashboard.
We have made the whole loan application process online which allows us to reduce any manual costs required if our process was so. The savings due to this reduction is passed on to the borrower at low interest rates.
A minimum of INR 90,000 or more in the 3 preceding months makes your business eligible for a business loan at Lendingkart.
Businesses that have been operational since the past 6 months have a turnover greater than INR 90 thousand are eligible for a loan at Lendingkart.
The maximum amount of loan that can be availed is up to INR 2 Crores

The EMI is calculated using the simple formula:

Where,‘E’ is the EMI

‘P’ represents the loan amount availed

‘r’ represents the monthly interest rate

‘n’ is the duration of the loan

If your business is thriving and sales are up, full repayments at once are possible. You won’t have to keep paying multiple EMIs every month. This is called loan foreclosure or prepayment. However, you have to pay an extra amount called foreclosure charges if you wish to proceed with loan foreclosure.
With Lendingkart, one can opt for a foreclosure without any additional charges. There no such hidden costs.
The loans are to be repaid are paid faster. If you want to optimize your working capital, faster repayments can help with the renewal of the loan and you can have a revolving credit line in place for better optimization.
All business loans under Lendingkart do not require collateral and hence are unsecured..
Yes you can avail a loan at any credit score but it inadvertently increases the interest rates. It is advisable that you should improve your credit score and then apply.
Yes. The due date of the EMI payment can be changed.
Your CIBIL score may not be affected directly but the improvement of your CIBIL loan might be stifled. It is advisable that timely repayment is done.
The wide range of ticket-sizes offered by Lendingkart means you have a higher chance of getting a business loan from us than from a bank.
Yes. Lendingkart business loans are all-in-one products which can be used for many short-term functions such as working capital management, inventory management and purchasing equipment.
There are no pre-closure charges or hidden fees.

Cities we serve

Delhi NCR: Delhi, East Delhi, Gurugram, Faridabad ,Ghaziabad, New Delhi, South Delhi, Noida, RithalaHaryana: Chandigarh, Rohtak, Palwal ,Gurgaon, Rewari, Panipat, Kaithal, KarnalHimachal Pradesh: Shimla, Mandi, Manali, Chamba, Kullu, RampurUttarpradesh: Lucknow, Agra, Kanpur, Allahabad, Varanasi, Meerut, JhansiPunjab: Amritsar, Ludhiana, Jalandhar, Patiala, FirozpurUttarakhand: Dehradun, Haridwar, Mussoorie, Roorkee, Kichha
Odisha: Bhubaneswar, Cuttak, Sambalpur, BerhampurWest Bengal: Kolkata, Hooghly, Howrah, KalyaniBihar: Patna, Sasaram, Nalanda, Aurangabad, Jahanabad, Siwan, Darbhanga, BuxarJharkhand: Ranchi, Jamshedpur, Dhanbad, Deoghar
Gujarat: Ahmedabad, Vadodara, Surat, Jamnagar, Gandhinagar, Deesa, Porbandar, BharuchGoa: Panaji, Madgaon , Mapuca , Ponda Rajasthan: Alwar, Jaipur, Ajmer, Behror, DholpurMaharashtra: Mumbai, Palghar, Pimpri, Ulhasnagar, Thane, Ahmednagar, Aurangabad, Nashik, Nanded
Telangana: Hyderabad, Ranga Reddy, Khammam, Secunderabad, Warangal, Nalgonda, Karimnagar, Nizamabad, AdilabadKarnataka: Bangalore, Mangalore, Hubli, Mysore, Shimoga, Davanagere, Gulbarga, Bellary, Belgaum AndhraPradesh: Vijayawada, Visakhapatnam, Guntur, Tirupati, Rajahmundry, Kakinada, Amaravati, Kadapa, Nellore, Kurnool, AnantapurTamilNadu: Chennai, Coimbatore, Madurai, Trichy, Salem, Vellore, Erode Kerala: Ernakulam, Kochi, Thiruvananthapuram, Kollam, Thrissur, Malappuram

Business Loan News:

The credit demand surges to a new high

The NBFCs or Non-Banking Finance Companies like IIFL, Edelweiss, and Shriram Transport which had been struggling constantly to conserve their capital recently have come up with a decision to open wallets. They are trying to lend as high as Rs 4 thousand crores per month. The country’s biggest lender and mortgagee HDFC Ltd has also witnessed a big increase in the demand for home loans which was quite similar to the pre-covid era. It was also seen that the new trend for various kinds of loans for purchasing construction equipment and trucks is seeing a new high in this  pandemic times. Further, the rise in infrastructure spending by the governments as well as capital expenditure by some of the private companies is in demand too. Retail credit demand is also on track now.

Updated Date: 24-09-2021

Credit to various sector affected by pandemic and lockdown

As per the Quarterly Basic Statistical Returns report by the RBI, credit growth to various sectors have seen a low due to the pandemic while few have seen growth as well. The credit to industrial sector was in the negative zone while there was strong growth in personal loans and working capital loans in the form of cash credit which accounted around one-thirds of total credit in 2020-21. This is an representation of the fact that businesses and livelihoods have been severely affected by the pandemic as well the lockdown as people have been struggling to gather means to survive.

The data further showed that private sector banks recorded higher loan growth than public sector banks. The credit to the household sector also sees a boom by around 11% and thereby this sectors total credit share also increased as compared to previous years. Credit to private corporate sector has been seeing a decline since 6 quarters now.

The banks in rural and semi-urban areas have recorded good credit growth over the last 4 quarters whereas the branches in metropolitan cities have taken a hit in terms of total credit share. This showcases the fact that the need for loans in time of the pandemic is being recognised in the rural areas as well.

Updated Date: 05-07-2021

Emergency Credit Line Guarantee Scheme (ECLGS) to receive ₹1.15 Lakh Cr boost

The Union Finance Ministry had started the ECLGS (Emergency Credit Line Guarantee Scheme) in May last year. The initiative began as part of the Prime Minister’s AatmaNirbhar Bharat package.

According to Finance Minister Nirmala Sitharaman, ECLGS 1.0, 2.0 and 3.0 were able to disburse credit up to ₹2.69 lakh crore to 1.1 Cr from public banks.

The Finance Minister, on Monday, announced an additional ₹1.15 Lakh cr for ECLGS. The initiative is meant to offer 100% credit guarantee to lenders that offer loans to businesses that suffered because of COVID 19, who are unable to meet their working capital requirements. The Government will also include private banks and NBFCs in the attempt. She also said that the existing admissible limit of credit guarantee on loans will be raised from 25%. The sector-wise details on the project are yet to be released.

The Minister also announced that the Government will increase the cap of admissible credit guarantee will increase from ₹3 lakh crore to ₹4.5 lakh crore.

The Government also plans to launch other schemes with a view to assist businesses. Countries like UK see Aatmanirbhar Bharat as a scheme with great potential.

Updated Date: 01-07-2021

Stalin seeks moratorium on loan repayment for MSMEs

M.K Stalin, the Chief Minister of Tamil Nadu, pleaded to his counterparts via letters, asking them to join his efforts in asking the Central Government and Prime Minister Shri Narendra Modi to provide moratorium on loan repayment for the MSME sector that has been badly hit due to the Covid-19 pandemic.

The lockdown meant to suppress the spread of the pandemic has affected small businesses severely. He has written letters to the Chief Ministers of Jharkhand, Andhra Pradesh, Bihar, Delhi, Chhattisgarh, Kerala, Maharashtra, Punjab, Odisha, Rajasthan, Telangana, and West Bengal asking them in turn to write letters to the Minster of Finance and Chairman of RBI regarding the moratorium as he feels that a united front might ease things and increase the chances of success for the appeal.

Stalin pointed out the fact that when the central government announced lockdown last year, there was a decision to provide moratorium on loan repayment for the MSME’s, but this year it hasn’t been followed although the state governments had to impose lockdown individually to curb the death toll due to the spread of the pandemic. He seeks a moratorium on loan repayment of upto INR 5 Crores for atleast the first two quarters of 2021 to ensure that the MSME sector doesn’t collapse.

Updated Date: 14-06-2021