Business Loan Eligibility

You can speed up your loan approvals with an exquisite network of lenders. To determine the eligibility for a business loan, lenders simply consider factors such as the credit score of the business and its owners, the business's revenue and profitability, the length of time the business has been operating, and the purpose of the loan. Lenders may look closely at your business line in which you operate and its overall financial health.

Soft checking your credit score is non-binding and free through online. Would not affect the credit score & helps provide an upfront idea about your chances on loan approvals!

Here are few of Businss loan eligibility criterias distributed for the business owners to help meet them.

Eligibility Criteria for A Business Loan

Here is a detailed overview of the eligibility criteria for a business loan:

  • Age Criteria: The individual applying for the loan should be at least 21 years old at the time of the loan application and should not be older than 65 years at the time of loan maturity.
  • Business Vintage: The business should have been in operation for a minimum of 1 year or more.
  • Business Experience: The applicant should have a minimum of 1 year of experience in the business, and the business location should remain the same.
  • Annual Turnover: The specific annual turnover requirement is usually defined by the Bank/NBFC (Non-Banking Financial Company) providing the loan.
  • Credit Score: A credit score of 700 or above is preferred by most private and public sector banks. This indicates a good credit history and responsible credit management.
  • Nationality: The applicant should be an Indian citizen and should not have defaulted on any previous loan(s) with any lender.
  • Additional Criteria: The applicant must own either a residence, office, shop, or godown.

Eligible Entities Who can Avail a Business Loan

The following entities are generally eligible for a business loan:

  • Individuals,
  • Startups, MSMEs (Micro, Small, and Medium Enterprises),
  • Sole Proprietorships,
  • Partnership Firms,
  • Public and Private Limited Companies,
  • Limited Liability Partnerships,
  • Retailers, traders, manufacturers, and other non-farm income-generating business entities engaged only in the services, trading, and manufacturing sectors.

The eligibility criteria can vary between different lenders, so it's advisable to directly inquire with the specific institution from which you are seeking a loan to ensure you meet all the requirements.

Are you looking for a business loan?

Business Loan Eligibility Calculator

Taking out a business loan is a big financial commitment. A loan of ₹50 lakhs can be useful for buying equipment, starting a new project, or making investments. So, it's important to first check your loan eligibility for your business needs.

Loan eligibility will vary from lender to lender; however, there are some common parameters, that lenders consider when deciding on loan approvals. Utilize the business loan eligibility calculator to estimate your eligible loan amount.

Monthly EMI 86
Principal Amount 1,000
Total Interest 32
Total Amount 1,032.00

Year Month Principal (A) Interest (B) EMI (A+B) Balance Loan Paid to Date (%)

Besides loan eligibility, for better financial planning of your loan, use the Business Loan EMI calculator to calculate your EMI.

Documents Required For a Business Loan

Here is a common list of documents that are required for a business loan:

  • A loan application form that is filled along with passport-sized photographs
  • KYC documents of applicants, partners, and co-applicants including Passport, Aadhar card, Voter’s ID card, PAN card, Driving license, and recent Water or Electricity Bills
  • Income Proof with the last 6 months’ bank statement
  • Last year's Income Tax Return for existing enterprises
  • Certificate of Business Incorporation/Establishment
  • Business Vintage and Address Proofs
  • Any additional document requested by the lender

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Comparing Business Loan Interest Rates Across Lenders

It is crucial to compare business loan interest rates offered by different lenders. As it will help business owners find the best financing option for their business. Here are the various banks and NBFCs offering business loans along with their interest rates:

Business Loan Interest Rates From Top Banks & NBFCs

Here is a comprehensive list of business loan interest rate offered by top banks and NBFCs:

Bank & NBFCs Interest Rate (%)
Axis Bank 14.95% - 19.20% p.a.
Bajaj Finserv 9.75% - 30% p.a.
Flexiloans 1% per month onwards
HDB Financial Services Ltd. Up to 36% p.a.
HDFC Bank 10% - 22.50% p.a.

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Note: The interest rates are subject to change. Do visit the official website for updated rates

Factors Affecting Business Loan Eligibility

When applying for a business loan, several key factors play a vital role in determining an applicant's eligibility. These factors encompass various aspects, ranging from the individual's financial history and creditworthiness to the stability and profitability of the business itself. Understanding these determinants is essential for prospective borrowers seeking to secure financing for their entrepreneurial endeavors.

  • Applicant’s Age: The age of the applicant can be a determining factor for business loan eligibility, as it may indicate the applicant's level of experience and stability in managing financial responsibilities.
  • Nature and Type of Business: Lenders often consider the nature and type of business when assessing loan eligibility, as certain industries or business models may pose different levels of risk.
  • Applicant’s Credit Score, Financial History, and Source of Income: A strong credit score, a positive financial history, and a stable source of income are crucial factors that lenders evaluate to gauge the applicant's financial reliability and ability to repay the loan.
  • Business Stability, Vintage, Turnover, and Profitability: The stability and vintage of the business, along with its turnover and profitability, provide insights into its financial health and sustainability, influencing loan eligibility.
  • Applicant’s Repayment Capability & Creditworthiness: Lenders assess the applicant's repayment capability and creditworthiness to ensure they have the financial capacity and reliability to meet the loan obligations.
  • Details of Collateral/Security for Secured Business Loans: For secured business loans, providing details of collateral or security can significantly impact loan eligibility, as it offers a form of assurance for the lender.
  • Loan Defaults or Repayment History: Past loan defaults or a history of inconsistent loan repayments can negatively impact business loan eligibility, as it raises concerns about the applicant's financial reliability.

Get a business loan without any security or collateral!

Steps to Apply For Business Loan with Buddy Loan

Step 1: Visit or Download & install the Buddy Loan app (Android or iOS).

Step 2: Open the business loan application page. Enter your mobile number and OTP.

Step 3: Specify the desired loan amount and email. Next, choose the Business Loan option.

Step 4: Choose if you have a Business Proof (Yes/ No)

  • If ‘Yes’ (If you have a business proof), enter your business and personal details.
  • If ‘No’ (If you do not have a business proof), choose the profession type and enter your personal details.

Step 5: Provide income details and Click the ‘Submit’ button.

Frequently Asked Questions

A loan eligibility check is an assessment conducted by lenders to evaluate an individual's or business's financial situation and determine the amount of loan they are qualified to borrow based on various factors such as income, credit score, and existing financial obligations.

The specific business loan for which you qualify depends on factors such as your creditworthiness, the nature of your business, its financial stability, and the amount you are seeking to borrow.

How to be eligible for a business loan?

Business loan eligibility is often calculated based on factors such as your income, credit score, business stability, and existing financial obligations. Lenders use this information to determine the maximum loan amount you qualify for.

The amount of salary eligible for a loan varies based on factors such as the lender's criteria, the individual's existing financial commitments, and the specific loan product being applied for.

The minimum CIBIL score required for a business loan can vary among lenders, but generally, a score of 700 or above is considered favorable for obtaining a business loan at competitive terms.

The maximum time period for a business loan, also known as the loan tenure, can vary depending on the lender and the specific loan product. It typically ranges from one year to up to 5-7 years, or even longer in some cases, based on the nature of the business and the loan amount.

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