Top Indian Banks for Availing Business Loans within the Country

Business loans are basically personal loans availed to meet expenses related to the operations of a business. Be it for ensuring smooth functioning of enterprises or raising capital for expansion, business loans are the best options for entrepreneurs. However, when you make an application for a business loan, the lender / bank will carry out a check of your documents to ascertain whether or not you are eligible for credit. The documents that will require verification include your credit report, your cash flow statements and other accounts that carry information regarding the gross profit recorded by your business.

Business loans are usually granted without any need for the borrower to pledge a collateral security or mortgage. Since business loans are generally unsecured loans, there is no need for guarantee from group members either. In essence, business loans are considered as personal loans only for individual businesses as they are mainly granted to meet small business expenses. The business / concern’s status does not determine the eligibility of an individual for a business loan, but what counts is the status of financial attributes and the tenure and capacity of repayment.

The main aim of a business loan is to facilitate the development of a business concern. To avail one, you will have to ensure that there are no risks associated with your enterprise as banks and lenders are usually sceptical when it comes to lending to individuals who have a rather high element of risk. It is also important to maintain a complete documentation of all the loan you have previously availed from other institutions. The manner in which your personal financial values are managed will determine whether or not you qualify for a business loan. Even your business plan must be documented and presented to the lender when required as it plays a crucial role in helping the bank / lender determine your eligibility for credit.

The best financial institution to approach when seeking a business loan is the one that previously helped finance your business. The main reason for returning to your primary lender is that it is already aware of your past records and reputation with regards to handling credit. The lender will also possess a summary of your financial accounts, thus making the application process less tedious for the borrower as your business behavior is already acknowledged and the bank will be more confident in you so far as repayment is concerned.

The best banks to approach for business loans

Entrepreneurs of small businesses have several options when it comes to availing business loans. Most banks and lenders that have business loan facilities offer them at similar rates of interest, making it difficult for individuals to ascertain which bank best suits their requirements.

ICICI Bank offers term loans worth Rs.15 lacs and does not request any collateral security from the borrower. All that is expected of the borrower is that he / she submit all the necessary documents for verification, like their income tax returns for the past three years and personal ID documents as requested by the lender.

Oriental Bank of Commerce deals with the public sector and operates in somewhat similar fashion to ICICI Bank but offers loans without any securities at a slightly lower rate of interest. The Oriental Bank of Commerce is ideal for entrepreneurs seeking to expand their businesses. 

Citibank provides personalized business loans so that a large number of small businesses can gain access to funds without providing any past financial records or collateral. Individuals who borrow from Citibank will not even have to deal with distribution or processing costs, making it considerably cheaper for the borrower to avail the facility.

HSBC Bank has grown into one of the most popular banks among Indian borrowers seeking business loans. Having updated its factoring services and overdraft to help small businesses develop and excel in its operations, it is no surprise that HSBC is one of the most-preferred lending institutions in the country.   

All of the aforementioned banks offer special schemes to individuals seeking business loans, making them great options for entrepreneurs who wish to expand their businesses or meet working capital requirements.