Corporate Loan

Corporate loans, often referred to as corporate business loans, are specialized financial products only crafted to fulfill the financial requisites of companies, enterprises, or corporations. These loans serve as a means for businesses to secure capital for various purposes, ranging from operational expenses to expansion initiatives, equipment procurement, and working capital needs.

Corporate loans cater only to businesses, while other loans, like personal loans cater to individual needs. The interest rates for corporate business loans are variable and typically suit the business’s creditworthiness, prevailing market conditions, loan duration, and the intended use of the funds. Offering diverse structures, including term loans, lines of credit, asset-based loans, or commercial mortgages, corporate loans provide adaptable financial solutions specifically designed to address the varied financial requirements of businesses.

Read further to learn more about corporate loan rates and other basic details

Corporate Loan Interest Rate

When understanding corporate loan rates, it's essential to note that interest rates can significantly differ from one bank or financial institution to another. Understanding these variations enables businesses to compare rates offered by different lenders, ensuring they secure the most favorable terms suitable for their financial requirements and capabilities.

Interest Rate 10%-21% p.a.
Loan Amount ₹50,000-₹50,00,000
Loan Tenure Up to 10 years
Prepayment Charges Up to 4% on the balance

Types of Corporate Loans

Corporate loans come in various types, catering to diverse business needs:

  • Term Loan: These funds are ideal for injecting capital, property purchase, machinery acquisition, or technology upgrades. Interest rates can be fixed or floating, with a set repayment schedule.
  • Loan Against Securities: By pledging investments like mutual funds, insurance policies, or bonds, you can secure funds for your business. The loan tenure renews annually.
  • Letter of Credit (LC) and Bank Guarantee: Banks issue a letter ensuring payment to the seller, covering your obligations. Under certain conditions, if you're unable to pay, the bank may cover the outstanding amount.
  • Cash Credit Facility: Pledge business assets like receivables or inventory to access funds. Typically, withdrawal limits range from 70% to 80% of the asset value, with renewal every 12 months.
  • Overdraft Facility: This facility permits debiting your account below zero, within a specified limit based on pledged securities. Interest is charged only on the used amount, but repayment may be demanded by the bank at short notice.

Eligibility for Corporate Loans in India

To get a corporate loan approved, you must meet a set of eligibility criteria. Refer to the table below to know whether you are eligible for a personal loan.

  • Age - Min 21 - Max 65 (at the time of loan maturity)
  • Business Vintage - Min 2 years or above
  • Annual Turnover - As per banks
  • Credit Score - 750 or above
  • Nationality - Indian

Not sure of your credit score? Check it now!

Check Your Credit Score for Free

Also get a Free Credit Report

Top Leading Banks/NBFCs that Offer Corporate Loan

Here are the top banks and Non-Banking Financial Companies (NBFCs) that offer corporate business loan solutions, providing competitive rates and flexible terms to cater to diverse business needs and objectives. However, here is a curated list of leading financial institutions known for offering corporate loans with varying rates and features to support businesses in achieving their financial goals.

Banks/NBFC Interest Rate
Bajaj Finserv 9.75% - 25% p.a.
HDFC Bank 10.00% - 22.50% p.a.
IIFL Finance 12.75% - 44% p.a.
FlexiLoans 1% per month onwards
ICICI Bank Up to 17% p.a.

Read More

Read Less

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

Looking for a Business Loan?

Documents Required for Corporate Loan Application

To get quick approval for your corporate business loan, here are the eligibility criteria that an individual should meet. Refer to the table below to know whether you are eligible for the same:

Age Min 21 - Max 65 (at the time of loan maturity)
Business Vintage Min 2 years or above
Annual Turnover As per banks
Credit Score 750 or above
Nationality Indian

Benefits of Applying for Corporate Loan

Here are four key points highlighting aspects of business loans offered by banks and NBFCs for Corporate Loan:

  • Varied Interest Rates Based on Credit Profile: Business loan interest rates vary according to the applicant's creditworthiness, business type, loan type, and offered collateral. Lenders assess these factors to determine the interest rates, ensuring tailored financial solutions.
  • Top-Up Loans for Existing Borrowers: Many banks and NBFCs allow existing business loan borrowers to access additional funds through top-up loans, supplementing their existing loan amounts with no new application process.
  • Overdraft Facilities for Borrowers: Several lenders provide overdraft facilities to existing business loan customers, granting them the flexibility to withdraw funds up to a pre-set limit, and offering enhanced financial control.
  • Minimal Documentation: Some lenders extend pre-approved business loans to existing and new customers, offering instant loan disbursals with minimal paperwork, streamlining the loan application process for swift access to funds.

Steps to Apply for a Business Loan

A business loan can also directly help business requirements, mirroring the utility of corporate loans. To apply for a business loan, gather the necessary documentation, choose the right loan type, complete the application accurately, and submit it to your selected lender for evaluation and potential approval.

You can apply for a business loan on Buddy Loan with a pool of RBI approved lenders providing collateral free loans for your business needs.

  • 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. Or
    • If ‘No’ (If you do not have a business proof), choose the profession type and enter your details.
  • Step 5: Provide income details and Click the ‘Submit’ button.

Apply for a Business Loan now!

Loan Repayment

Repaying corporate loans promptly holds immense significance for businesses. It cultivates financial stability, fosters trust with lenders, and bolsters the business's credit profile, paving the way for easier access to future financing. Consistent repayments ease financial strain, ensuring smooth operations and offering opportunities for growth and expansion through improved financial planning and credibility in the market.

Frequently Asked Questions

The primary purpose of a Corporate Loan is to provide businesses with essential financial support for various operational needs, such as expansion, working capital requirements, purchasing equipment, upgrading technology, funding projects, or meeting specific financial obligations.

The approval process for Corporate Loans involves a comprehensive assessment by the lending institution. It includes evaluating the business's creditworthiness, financial stability, business plan, cash flow projections, collateral (if required), and repayment capacity. Documentation substantiating the business's financial health, such as financial statements, balance sheets, income tax returns, and business plans, is also necessary.

Corporate Loans serve various purposes for businesses, including but not limited to:

  • Expansion initiatives
  • Working capital requirements
  • Equipment purchase or upgrades
  • Project financing
  • Debt consolidation
  • Cash flow management
  • Business acquisitions or mergers

Various types of Corporate Loans cater to diverse business needs, including:

  • Term Loans
  • Working Capital Loans
  • Equipment Financing
  • Trade Finance
  • Project Financing
  • Line of Credit/Overdraft Facilities

Interest rates on Corporate Loans are influenced by factors like the business's credit profile, loan tenure, market conditions, loan amount, type of loan, collateral (if any), and the prevailing benchmark rates set by the central bank or financial markets.

Collateral requirements for Corporate Loans vary based on the lender and the loan type. While some loans may require collateral (such as property, equipment, or inventory), others might be available without collateral, especially for businesses with strong credit profiles. The need for collateral depends on the risk assessment conducted by the lender.

Display of trademarks, trade names, logos, and other subject matters of Intellectual Property displayed on this website belongs to their respective intellectual property owners & is not owned by Bvalue Services Pvt. Ltd. Display of such Intellectual Property and related product information does not imply Bvalue Services Pvt. Ltd company’s partnership with the owner of the Intellectual Property or proprietor of such products.

Please read the Terms & Conditions carefully as deemed & proceed at your own discretion.