Business Loan for Startups

Get an instant business loan for startups or startup funding for various requirements of up to ₹50 Lakhs on Bajaj Markets.

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Today, a majority of lenders offer startup business loans and these give aspiring entrepreneurs the financing they need to get their ventures off the ground. The funding can be used to fulfil all the requirements of establishing the business.

To learn about a startup loan for a new business, how to get a startup business loan and more, read on.

Features and Benefits of Business Loans for Startups

Flexibility

Startup business funding offers flexible repayment terms and tenures to new business owners.

Quick Availability

Startups get fast access to capital from most lenders to unlock growth and opportunities.

Unsecured Loan

New ventures can safeguard high-value assets as these loans are available without collateral.

Hassle-Free Documentation

The documents required to apply for small business startup loans are minimal.

Business Loans for Startups by the Indian Government

Being the third largest ecosystem for startups, India has more than 77,000 startups. Some of these startups get financing through means other than startup loans. This includes access to private equity and other financing sources like crowdfunding.

However, accessing these resources for funding may be challenging for a venture in its infancy. As a result, the Government of India (GoI) announced setting up business financing initiatives for startups.

Additionally, SIDBI (Small Industries Development Bank of India) has directly started financing MSMEs and startups at affordable interest rates.

Here are some of the top startup business loans by the Indian government.

1. Pradhan Mantri Mudra Yojana (PMMY)

This scheme offers an MSME startup loan classified as MUDRA (Micro Units Development and Refinance Agency). Financial institutions, including regional rural banks, MFIs and NBFCs, can offer this startup funding solution.

Traditional or regional craftsmen, vegetable sellers, machine operators, store owners, service firms, etc., can all apply for a Mudra loan.

The startup loan amount ranges from ₹50,000 to ₹10 Lakhs and is categorised as Shishu, Kishor, and Tarun, depending on the loan amount. Moreover, women business owners can avail of this loan at discounted interest rates, making the loan more affordable.

2. Sustainable Finance Scheme

Started to support ventures that work towards sustainable development and clean, energy-efficient operations, the scheme is also run by SIDBI. As such, an entrepreneur working towards sustainability through their venture can apply for these startup loans.

Under this scheme, you can get financing of up to ₹1.5 Crores with a repayment tenure of up to 6 years.

3. Credit Guarantee Scheme (CGS)

As the name suggests, the scheme aims to extend credit and financing to the MSME sectors. Established and emerging MSMEs engaged in service or manufacturing operations can apply for this MSME loan for startup businesses.

However, businesses engaged in Self Help Groups (SHGs), agribusiness, academia, retail, etc., avail financing under this scheme. Under this plan, run by the CGTMSE (Credit Guarantee Fund Trust for Micro and Small Enterprises), you can avail up to ₹5 Crores as startup business funding.

4. Standup India

The primary aim of this scheme is to offer business loans for startups headed by women and people belonging to the SC/ST category. Standup India Under this scheme, you can get financing of up to ₹1 Crore as startup funding.

However, to qualify for this scheme, you should have a greenfield enterprise. This means that it should be a first-time venture in the trading, manufacturing, and service sector.

Apart from the above, there are other government schemes that offer an MSME loan for startup businesses. These schemes include:

Financing through NABARD (National Bank for Agriculture and Rural Development)
Startup India Scheme
Bank Credit Facilitation Scheme
Udyogini
Coir Udyami Yojana

Remember to check the details of the scheme before applying to ensure that you get seamless access to the funds you need.

Eligibility Criteria of Business Loan for Startups

To apply for a startup loan, you must meet the following eligibility criteria:

You must be an Indian citizen
You must be a self-employed individual
Your age must be between 21 to 70 years

You must have a CIBIL score of at least 700
The business must have a vintage of at least 3 years
The business must meet the minimum annual income terms
The business must not be in the blacklisted or excluded category

You can check your startup business loan eligibility with the help of the Business Loan Eligibility Calculator. Keep in mind that the above eligibility criteria may vary depending on the lender you apply with.

Check the lender’s website before applying for startup business funding to ensure that you meet all the criteria.

Documents Required for Startup Business Loan

Here are the documents that you need to apply for a startup business loan:

2 passport-size photographs
Proof of Identity: Aadhaar card/ Driving licence/ PAN card/ Passport/ Voters ID
Address proof: Aadhaar card/ Passport/ Utility bills/ Lease Agreement
Signature Proof: PAN Card/ Passport/ Bank verified signature
Bank statement for the last 6 months
ITR form and certified copies with income computation, balance sheet, and Profit and Loss (P&L) statement for the last 2 years
Sole Proprietorship Declaration or authenticated copy of Partnership Deed
Certified copy of Memorandum and Articles of Association

How to Apply for a Startup Business Loan

Most lenders allow you to apply for an instant business loan for Startup using online as well as offline modes. To apply for business loans for startups, follow the steps given below:

Step 1: To apply online, visit the lender’s official website and to apply offline, visit the lender’s nearest branch.
Step 2: Fill up the application form and submit the necessary documents.
Step 3: The lender will contact you to assist and understand other related aspects.
Step 4: The loan application is then evaluated before it is approved.
Step 5: After approval, the funds get transferred into your account quickly.

Things to Consider When Applying for a Startup Loan

If you are seeking loans for your startup, you need to consider the following points:

Provide a precise estimation of the available working capital
Create a clear, thorough, and workable business plan
Your business plan should be able to explain where you intend to spend the funds
Include a summary of the company's aims and objectives
Provide a graph of expected profits and expansion of the venture

Business Loans for Startups From Banks and Financial Institutions

Here is a list of the partner lenders on Bajaj Markets that offer Business Loans for Startups:

Our Partners	Interest Rate Range	Max Loan Amount/ Tenure	Avail Loan
Ambit Finvest	20% onwards	36 months	Apply Now
AYE Finance	28% onwards	36 months	Apply Now
FlexiLoans	12% onwards	36 months	Apply Now
IIFL Finance	18% onwards	60 months	Apply Now
InCred	20% onwards	48 months	Apply Now
Indifi	16% onwards	36 months	Apply Now
KreditBee	15% onwards	9 months	Apply Now
Lendingkart Finance Limited	15% onwards	36 months	Apply Now
Protium Finance Limited	1.25% p.m. onwards	72 months	Apply Now

Disclaimer: The rates mentioned above are subject to constant change. You must always check with the lender before applying. The final interest rate applicable to you will also depend on factors such as your repayment tenure, age, monthly income, and CIBIL score.

Before applying under any scheme or with any lender, carefully assess the terms and conditions of the loan. This will enable you to understand which is the best deal and ensure the growth of your venture. Visit the Bajaj Markets website to compare small business loans for startups and apply with ease.

Apart from the interest rates, business loans for startups also have other charges such as processing fees, bounced EMI fees, prepayment or foreclosure fees, and more. You can check the list of applicable charges on the lender’s website.

To know your eligibility, you can check the lenders’ website. Some of the generally accepted criteria for startup loans include being an Indian citizen between 21 and 65 years of age. You must have a CIBIL score of at least 700. Along with that, your company must have a vintage of at least two years, and it should meet the minimum revenue requirements.

The best way to get a business Startup loan is by applying at the National Small Industries Corporation or NSIC. Alternatively, you can check with the lenders to assess the small business loan offers available.

Yes, there are numerous government startup loans for new business, such as National Bank for Agriculture and Rural Development (NABARD), National Small Industries Corporation Subsidy, Credit Link Capital Subsidy Scheme, Stand Up India Scheme, and Mudra Loan Scheme, among others.

Your access to startup loans depends on the viability and current performance of the company. This is because the performance and viability of the loan are key factors that lenders assess. However, there are many lenders that offer easy and quick access to funds.

Yes, you must have a business plan before applying for a startup loan. To offer startup loans, lenders look at the business plan, objectives, and goals to assess the viability of your venture and their feasibility in making the funds available. Lenders will also assess how and where you will use the funds, so mention that in your plan.

A business loan for a startup primarily supports the capitalisation of a firm that you want to launch. Getting a loan to launch a new business would help your operations by enabling you to get the needed equipment and machinery.