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Home > Business Loan Interest Rate

Business Loan Interest Rate

Borrowing money for your company is a good decision. It will assist you in moving forward more quickly. Our customized collateral free business loan interest rates and fees are tailored to each customer's unique profile and needs. Thus, regardless of the business loan condition—working capital, acquisition of new equipment, extension, or debt restructuring—our affordable options would guarantee that you fulfill your business loan obligations most simply and conveniently possible.

If you own a small company and consider applying for a MSME loan online, you are already well aware of the importance of these loans. Business loans are lifesavers for a variety of companies, from multinational corporations, small to medium-sized enterprises, and entrepreneurs. These loans assist company owners in cash flow management, payout times, and inventory management. However, one of the most critical considerations when applying for these loans is the interest rate.


Types of Business Loan Interest Rates

The Flexi loan Interest rate on business loans is essentially determined by the loan volume and term. In general, there are two types of small business loan interest rates. They are a fixed rate of interest and a Reducing or Diminishing Balance Rate.

  • Fixed Rate of Interest

The term "flat interest rate" refers to the interest rate that has been measured on the entire loan amount throughout its term, without taking into account the fact that monthly EMIs steadily reduce the principal amount and hence the interest rate. As a result, the Effective Rate is far greater than the average Flat Rate.

Business loan rates usually vary from lenders. The current business loan interest rates are determined by the borrower's record, credit ratings, financial statements, current debt, market stability, market forecast, and a variety of other risk management criteria.

  • Reducing or Diminishing Balance Rate

Reduced or diminishing balance rate refers to the monthly interest rate based on the outstanding loan balance. The EMI is calculated in this manner by adding the interest owed on the remaining balance of the loan every month to the principal of repayment. Following each EMI deposit, the loan's remaining balance is minimized. Thus, the next month's interest rate is calculated using just the remaining balance of the loan. Business loan interest rates today help you cover your operating costs during a time of reduced profits or earnings.


Current Business Loan Interest Rates in India

Our business loan interest rates are comparable with those offered by other lenders. However, we decide the right Flexiloans interest rate for your business loan requirement based on loan eligibility, revenue, your business, and other factors.

There are no hidden fees or costs when you apply for a GST Business Loan with FlexiLoans. All information is transparently provided for seamless processing of your company, whether it is related to processing fees, foreclosure costs, or missed EMI Payments.

  • Per Month's EMI

This consideration takes into account not just current circumstances but also previous financial stability history in determining the right to pay per month EMI. If you have a clear financial history, you will be able to determine the business loan interest rates and terms while applying for a new loan. Be sure you're paying your EMI with extra money that won't interfere with your daily needs.

  • Processing Fee

This is a one-time deposit paid to get the loan balance processed. It's the equivalent of the service costs on top of the original price. This is non-refundable, and there will be no tax paid on it. This fee is inevitable no matter what kind of loan you're applying for, and it's supposed to be charged upfront.

  • Prepayment

If there is an opportunity to pay off the loan early before the end of the term, you will do so with additional prepayment fees. FlexiLoans calculates this based on the remaining balance to determine service costs and other factors.

Business Loan allows you to get started on the path to your goal. Money can never be a barrier to starting a company in this day and age, where there are so many opportunities like FlexiLoans giving the best business loan rates in India.


Factors Determining the Rate of Interest on a Business Loan

  • Company History

The length of operation is critical in deciding if the business is approved for a business loan and the interest rate charged. The longer an enterprise has been in operation, the greater its chances of obtaining business loans at the most favorable interest rates. Typically, the lender divides the debt into two categories: Priority Sector and Non-Priority Sector. Non-Priority Sector loans have such a higher interest rate than priority sector loans. As a result, the nature of your company affects the interest rate on your business loan as well.

  • Credit/CIBIL Score

Credit/CIBIL scores are used to determine your creditworthiness and are calculated from your credit record. If you've ever taken out a loan and paid it back on time, or even if you pay your credit card payments on time, you'll get a decent credit score. Additionally, having a positive credit score would work to your advantage when applying for a loan. A strong credit score entitles you to other benefits such as best business loan interest rates and much more flexible loan terms.

  • Flow of Cash

The monthly revenue generated by your company determines whether it is profitable or incurring losses. In short, it continues to play a significant role in deciding your business loan eligibility. At intervals, the turnover rate fluctuates. However, accuracy is critical since it assists the lender in determining the loan duration and repayment terms.

  • Business experience

Although many lenders in India provide business loans to start-ups, including businesses with little experience, overall interest rates are typically higher on these loans. If you've been in the very same industry for many years, the investor will see this as a good indication and will give you a better price than if you are starting a new company.

  • Type of Business

Not only does industry knowledge matter, but also the form of business. This is because some companies are perceived to be riskier than others. If you engage in one of these risky businesses, you would be forced to pay a higher interest rate on your business loan.

  • Business strategy

If you're starting a new company, you'll still need to provide the lender with a clear business strategy and specifics on how you want to use the loan funds. Without a clear and thoughtful plan, the lender will accept the loan but charge a higher interest rate.

  • Collateral

The majority of business loans are secured. The more collateral provided, the smaller the bank's risk and thus the lower the interest rate. Collateral is indeed the security that most lenders need as a condition of providing business loans. Collateral is any commodity that the company owner owns that has a nominal value. Although some businessmen are eager to have collateral, others are unable to do so. It also has an impact on the interest rate on business loans.


Basic Eligibility Criteria

FlexiLoans has simplified its eligibility conditions to the bare minimum to expedite the processing of business loans. We don't ask for a lot of documentation or papers that can slow down the loan approval process.

  • You must be 21 years of age when applying for the loan and not more than 65.
  • Business loans are available to individual corporations, sole proprietors, and private companies involved in trading, production, or services.
  • The applicant must have worked in the industry for three years and have at least five years of experience.
  • Offers business loans to those businesses that have been running for at least a year and have monthly total sales of at least ₹2,00,000.
  • If the company has been in service for more than 3 years, you can apply for a business loan.
  • We would also ensure that there are no errors in previous accounts and, as such, the company is tax compliant.

How to Apply for a Business Loan?

Although applying for an instant business loan used to be a lengthy process, it has now become fully hassle-free and online. You are not required to visit several banks in search of the best interest rate, nor are you required to wait for clearance or submission of papers.

To apply for a business loan without collateral, all you need are soft copies of your records, a decent internet connection, and a strong credit score. The whole procedure can take no more than a few business days, during which time you can see a reflection of the funds transferred to your account. Here are 4 ways how you apply for a business loan:

  • Online Application

Visit the FlexiLoans website and complete the application process by entering all necessary details accurately. FlexiLoans will use this information to determine your business loan eligibility.

  • Online submission of required documents

Upload all necessary documentation, including identification documents, current account bank statements, and business identification papers.

  • Credit Analysis

We'll evaluate the business's performance and operations to determine the amount of money you're willing to borrow and the applicable interest rates. Our loan officers will assist you in comprehending the offer and making an informed choice.

  • Loan Disbursement

After checking the paperwork and accepting the loan, FlexiLoans will exchange the loan agreement. Within 48 hours of signing the contract, funds are transferred to the applicant's account.


Documents Required for Business Loan

Personal KYC PAN card
Residential Address Proof (Any One) Rent Agreement | Driving License | Voter's ID | Ration Card | Passport | Aadhar Card
Banking Last 6 months current account bank statements
Business KYC (Any One) GST Registration Certificate | Shops & Establishment Certificate | Business PAN Card

Frequently asked questions

What are the purposes for which I can get a loan via FlexiLoans?

FlexiLoans is here to provide you financial access for your business funding needs. You have to undergo simple and transparent Credit Evaluation, basic documentation before we disburse the loan. You may get loans via FlexiLoans for:
  • Expanding your business
  • Servicing regular working capital needs
  • Managing seasonal working capital requirements
  • Manage short term cash flow gaps

Why should I avail loan via FlexiLoans?

Quick credit assessment ensures fast disbursal of loan at best rates and flexible terms, thus providing financial access at a click! Our business is to help you grow your business.

How is the interest rate calculated on a business loan?

  • Business Loan interest rate is calculated basis- E = P * r * (1+r)^n / ((1+r)^n-1).
  • Here, P signifies principal loan amount, r signifies the interest rate, n stands for tenor in months and E signifies the EMI amount.
  • You can use the FlexiLoans EMI Calculator to check the interest payable, EMI amount and more.

What documents are required to apply for a loan?

KYC document

  • - Pan card

Proof of residential address (any one)

  • - Rent Agreement
  • - Driving License
  • - Voter's ID
  • - Ration Card
  • - Passport

Banking

  • - Last 6 months of bank statement of current account

Business KYC (any one)

  • - GST Registration Certificate
  • - Shop Establishment Certificate

Financial documents (For loans greater than 20 Lakhs)

  • - 2 years Audited financials
  • - Last 2yrs ITR
  • - GST Returns of 6 months

Are there any charges other than interest rate that I have to pay to avail the loan?

We may charge processing fee to facilitate the loan towards legal and documentation charges. You may be charged penal charges for late or irregular payment behavior.

Where to apply for a business loan?

To apply for a business loan click on the link here.

Quick credit assessment ensures fast disbursal of loan at best rates and flexible terms, thus providing financial access at a click! Our business is to help you grow your business.

We may charge processing fee to facilitate the loan towards legal and documentation charges.

Interest rates start at as low as 1% per month. However, it may depend on various factors like your loan amount, tenure, eligibility, etc.