How to Get a Loan to Start a Business in India

Starting a business is exciting, but one of the biggest challenges for aspiring entrepreneurs in India is arranging funds. While personal savings and investor backing may not always be accessible, business loans offer a practical way out. These loans can finance everything from daily operations to long-term expansion. 

With multiple banks, NBFCs and loan types available, choosing the right option requires clarity. If you are struggling with this issue or how to use the loan, this guide will walk you through and assist in decision-making. 

What is a Business Loan? 

Business loans are the financial products offered by banks and other financial institutions to invest in a business. These are provided as the debt to the business owner, who must repay as per the mutually agreed-upon terms and conditions. 

An instant business loan does not compromise the ownership of the company and contribute to funding a variety of operational and expansional needs or to meet seasonal demands. The loan to start a business can be either secured, i.e., available on providing collateral or unsecured, i.e., available without providing collateral. 

How Can You Effectively Use the Business Loan? 

Starting a business involves handling a variety of aspects from scratch. Here is how to use the loan in the most effective way to leverage maximum benefits: 

1. Avoiding Lump Sum Expenditure 

Plan the use and expenses to be covered from the loan. It should not be used to make a single payment, but rather to efficiently get a variety of tasks done. 

2. Keep Restricted Access 

The loan should not be used in combination with the existing balance. Rather, keeping it separate helps monitor the usage. Also, it limits impulsive expenditures. 

3. Invest in High ROI Activities 

Choose the high ROI activities depending on the business's specific uses. These can include purchasing inventory and equipment, investing in technology or marketing and advertising. The funds can also go into R&D to offer a product/service. 

Where to Get Business Loans to Start a Business?  

Numerous banks and NBFCs offer loans to start a business in India. Rather than exploring each of them separately, at My Mudra, we offer access to financial institutions in one place. Explore here a few best ones among them to choose the business loans to start a business: 

1. HDFC Bank 

Business loan amount: Up to INR 50 lakhs (can go up to INR 75 lakhs in selected locations) 

HDFC Bank offers business loans to start a business in India. To avail the facility, businesses should have a minimum turnover of INR 40 lakhs and a Minimal Annual Income (ITR) of INR 1.5 lakhs per annum. Offering top features, the choice is worth it because: 

• Companies with existing business loans can transfer balances easily. The option can help set lower EMIIs at attractive rates and avail flexible tenure up to 48 months. 
• Businesses can opt for the Overdraft facility without any security. The facility is available for a range between 1 lakh to 25 lakhs. 
• Get to experience a quick eligibility check and disbursal either online or at the bank branch. 
• Choose from the flexible tenure period of 12 to 48 months. 

2. ICICI Bank 

Business loan amount: Up to INR 50 lakhs 

It is another top bank to consider when exploring how to get a loan to start a business. With processing fees of up to 2%, customer-friendly prepayment charges and others, the documentation requirements here are minimal. The bank offers loans with features like: 

• No collateral requirement and fixed interest rates starting from 13.25% per annum, preventing any fluctuations and deviation from your budgets 
• Flexible tenure options of up to 60 months and benefits on other products from the bank 
• Quick disbursement allows instant access to the funds 

3. Yes Bank 

Business loan amount: Up to INR 75 lakhs 

If you are wondering how to get a loan to start your own business, My Mudra also offers loan options from Yes Bank. The bank has set a processing fee of up to 2.75% of the loan amount, and interest rates begin from 17.25%. The benefits to expect from Yes Bank are: 

• Option to transfer existing business loan at lower EMIs with competitive rates 
• No collateral or guarantor required to avail the loan 
• Allows to apply for the loan at a young age of 22 years 

How to Get a Loan to Start Your Own Business?

Now, let us address your main query, i.e., how to get a loan to start a business. It includes following steps: 

• Register: Enroll with your mobile number to register yourself. 
• Enter details: You will be receiving the form to fill out. First, you will be required to provide the business loan expectations and other details, followed by entering the business details. After successful filling of the forms, you will get a verification message.
• Proceed with our financial advisor: Now you can expect a call from the financial advisor of My Mudra to guide you for the next steps. After processing, you will receive the business loan in your account quickly. 

How My Mudra Can Help

My Mudra simplifies the process of securing funding by providing easy access to quick business loans. It achieves so by eliminating the need to explore multiple banks. Being strategically associated with top banks and NBFCs, we help you choose the right financial institutions for your needs. 

Thus, at My Mudra, we can help you with: 

• Variety of loans like business, personal, professional, secure and instant loans 
• Loan disbursal in minimal time with our one-day approval and disbursal feature 
• Allow to choose the lowest interest rate 
• Highest safety with a secured database 

Conclusions

Getting a loan to start a business often feels like a challenge. But it has now been streamlined by My Mudra, by offering a single platform to help you choose the right bank and NBFCs for your loan requirements. Leverage the right knowledge, planning and guidance to secure funding that supports your business goals. Also, follow the best practices to keep finances managed efficiently. Connect with us in case you have any queries or require assistance. 

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