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Business Loan in Mumbai: Types, Benefits, Documents Required, Application Process, Interest Rates

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Business Loan in Mumbai

Mumbai is the capital city of Maharashtra state. It is the most populated city in the west. Several businesses contribute to the economic growth of the city. Business owners in Mumbai can check the process, eligibility conditions of business loans in the following sections of this page.

As a business owner, no matter whatever your goals expanding your business or improving dales or increasing inventory, you can take the loan on your business. Banks provide startup, secured or unsecured business loans in Mumbai with lower interest rates. The different sector bank offers unsecured loans up to 50 lakhs to candidates who can reach their business goals.

Get Business Loan in Mumbai details by fulfilling all the eligibility criteria of the bank and step into the new business life. Well, some of the individuals have doubts like getting a Mumbai business loan can be easy? Is applying for a business loan a hectic process? Can we get a business loan at less interest rates in Mumbai? and so on. To clear all your doubts, we have given the complete guide on business loans.

Have a look at the below sections of this page to know important details like what is a business model, eligibility conditions, different types of business loans, required documents, interest rates, how to apply for a business loan in Mumbai.

Business Loan in Mumbai Overview

A business loan is financial support offered by banks and NBFCs in India. The aim of this loan is to help the lenders to grow their business. A business loan is also called a commercial loan. Different financial institutions offer loans to the existing businesses and startups that satisfies the eligibility conditions. These business loans can be obtained by all sectors businesses like partnership firms, self-employed individuals, proprietorships, self-employed individuals and retailers.

Interest Rate 14.00% onwards
Processing Fee Upto 3% of the loan amount
Loan Tenure Upto 5 years
Lowest EMI per lakh ₹ 2,327 for 5 years
Loan Amount Upto 50 Lakhs

Eligibility Conditions for Mumbai Business Loan

Go through the available entities of the business loans:

  • Self Employed Professionals
  • Individuals
  • Private and public limited companies
  • Artisans, Traders, Manufacturers, Shopkeepers, Small Vendors & Retailers.
  • Sole Proprietors
  • Private Limited Companies and Partnership Firms engaged in Manufacturing, Trading or Services sectors.

The following given are the basic eligibility criteria to apply for a secured business loan in Mumbai city.

  • Business should be operations and in profit for the past 1 year.
  • The minimum age limit of the applicant should be 18 years.
  • The maximum age limit is up to 65 years at the time of loan maturity.
  • Minimum annual turnover and profit depend on the lender’s loan amount requirements.
  • Current business experience should be more than 2 years.
  • Applicants shouldn’t have previous defaults with any financial institution.
  • Indian citizens with no criminal record.

Also, see:

Required Documents for Mumbai Business Loan Application

Here mentioned are the list of documents applicants must carry to the financial institutions to get loan approval.

  • Filled application form with passport-sized photographs.
  • Identity Proof (Voter ID/Passport/Driving License/Aadhar Card/PAN Card).
  • Address proof (Latest Utility Bill/Ration Card/Aadhar Card)
  • Income proof: Last 1-year ITR, Last 2 years P&L statement and Last 6 months bank statement
  • Company address and vintage proofs
  • Company establishment certificate
  • Any other document required by the lender.

How to Apply for Business Loan in Mumbai?

Eligible candidates can apply online for unsecured business loan in Mumbai from the financial institution’s websites. These three are steps are helpful for business loan applications in Mumbai.

Submit Application:

  • Login to the financial institution’s official website.
  • Check the startup business or other business loan eligibility criteria.
  • Eligible individuals can find apply online link.
  • Fill out the online application form with your details.
  • Submit the application form to receive the business loan offer.

Upload Documents:

  • Collect all the mandatory documents required to get business loan approval.
  • Verify your documents by uploading their copies to the website.

Get Sanctioned:

  • If all your details are verified and find no issues, then your loan will be approved within 3 days and disbursed.

Types of Business Loans

A business loan is a secured and unsecured loan offered at fixed, floating interest rates by the financial institutions, which provides access to the required credits that can be paid back in the agreed time period. The various business loans that are available for Mumbai businessmen are included here:

  • Working Capital Loan
  • Mudra Loan
  • Bill or Invoice discounting
  • Letter of Credit
  • Term Loan
  • Equipment Finance
  • Loan against securities
  • Loan for goods and machinery
  • Merchant Cash Advance
  • POS loans
  • Bank Guarantee
  • Machinery Loan
  • Cash Credit Facility and Overdraft Facility

Small Scale Business Loan in Mumbai and Their Types

These are the different types of small scale business loans that are available.

  • Business Credit Line: A specific amount is always made available to business owners. Similar to a credit card, revolving credit offers credit that resets once the amount withdrawn is paid in full.
  • Short term Loan: Finance for some business sectors over a short period or for employee salaries or purchasing assets for the business. The business owner is allowed to take out a term loan to borrow a specific amount of money and repay it with interest over a period.
  • Invoice Financing: Business owners borrow loan amounts against customer invoices. A short term requirement helps businesses to manage cash flow, pays employees and suppliers, and leads to business growth.
  • Equipment Financing: It is useful to purchase business machinery or equipment or a business owner’s fund needs.

Read More: Business Loan in Hyderabad

Interest Rates for Business Loan in Mumbai

The interest rates and processing fees of the various financial institutions that offer business loans in Mumbai are given here. Individuals who wish to take a business loan can refer to all these details to take the loan with lesser interest rates.

Name of Financial Institution Processing Fee Interest Rates
HDFC Bank Up to 2.50% of the loan amount
Minimum of ₹ 2359
Maximum of ₹ 88500
11.90% to 21.35%
Bajaj Finserve 2% of the loan amount 18% onwards
Axis Bank 1.25% to 1.50% 14.25% to 20%
IDFC First Bank Up to 3.5% of the loan amount 16% to 24%
Kotak Mahindra Bank 2% of the loan amount and GST charges 18% to 23%
Tata Capital Up to 2.75% of the loan amount and GST Starting at 19%
Zip loan 3% of the loan amount 23% to 29%
Lendingkart 1 to 2% of the loan amount 1 to 2% per month
Indifi 2% of the loan amount Starts from 1.5% per Month
Fullerton India 6.5% of the loan amount 17% to 21%

Note: The Interest Rates of Business Loans in Mumbai are given after enormous research and are effective as on 12th March 2022. Cross check once before applying for your loans.

Comparison of Top Banks Interest Rates for Business Loan in Mumbai

Here given is the list of top banks/NBFCs that provide startup business loans in Mumbai. Compare the interest rate in all banks and eligibility conditions. Give importance to the banks that give huge loan amounts with lesser interest rates

Bank/NBFC/Fintech Interest Rates per annum
HDFC Bank 16% onwards
Kotak Mahindra Bank 14% onwards
Axis Bank 17% onwards
Zip loan 16% onwards
FlexiLoans 16% onwards
Fullerton Finance 17% onwards
Bajaj Finserv 17% onwards
Tata Capital Finance 17% onwards
Yes Bank 17% onwards
ICICI Bank 18% onwards
Lendingkart Finance 18% onwards
Hero FinCorp 18% onwards
IIFL Finance 18% onwards
Indifi Finance 18% onwards
NeoGrowth Finance 18% onwards
RBL Bank 19% onwards
U GRO Capital 19% onwards
SMEcorner 19% onwards
IDFC First Bank 20% onwards
HDB Financial Services Ltd 22% onwards

Features & Benefits of Business Loan in Mumbai

Here are the business loan benefits in detail.

Benifits of Business Loan

Flexibility:

You can choose different types of loans to fulfill the business needs. Various government schemes like CGTMSE and other similar schemes offer business loans that are designed for MSEs for starting, expanding, and upgrading the facility.

Convenient Repayment:

The flexible nature of business loans in Mumbai reflects in their repayment options. Banks offer such flexibility as they understand the difficulties involved with various businesses and their plans are designed accordingly. They can offer a repayment plan as per the cash flow to avoid difficulties in financial management. Also, borrowers may increase or decrease EMI as per the financial position of the business. They can also choose bullet payments for periodic repayment.

Low-Interest Rates:

Banks are different from private lending institutions and their rates of interest are also lesser. It happens in the case of government-backed schemes as they are designed for public welfare, not for the benefit of the financial institution. Also, the interest rates are not determined just on the basis of the loan amount. A number of factors are taken into consideration like loan tenure, the viability of the business model, credits of the borrower, and the financial condition of the company. Other costs like processing fees are nominal and are one-time expenses.

Easy Availability:

Several banks, including private lending institutions, offer small business loans without collateral. This makes it easy for small entrepreneurs to avail such loans and sustain their ventures. Also, EMI calculators and online applications offered by the banks on their websites made this process much easier

Grow Your Business:

Manpower, finance, and technology are the needs of any business. Among all of them, finance is an important aspect that makes it possible for a business to ensure all the other needs are met. The required cash flow can be highly important for expanding a business as it can be used for different purposes to grow your business. You can arrange another facility or purchase machinery to speed up your business. In addition, owners can also have the freedom to use the money as per their preference.

Tax Benefits:

Small business loans allow you to save some tax benefits. This is because there are sections of the Income Tax Act that state the percentage of profit used for repaying the loan amount is exempt from the tax.

FAQ’s on Business Loan in Mumbai

1. Is a business loan in Mumbai risky?

Taking business loans in Mumbai city is not difficult by following the simple steps provided here.

2. Which bank loan is best for business?

The best banks for business loans in Mumbai are given here:

  • SBI Simplified Small Business Loan
  • HDFC Bank Business Loan
  • ICICI Bank Business Loan
  • Citi Bank Business Loan
  • Axis Bank Business Loan
  • Kotak Bank Business Loan
  • Standard Chartered Bank
  • IDFC First Bank Business Loan

3. How long does it take to disburse the business loan in Mumbai?

It varies from bank to bank, depending on the process to verify the eligibility conditions. But mostly your business loan will be disbursed within 3 to 7 working days.

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