Can a new business get a loan?

It is difficult without a track record. Options are Mudra (up to ₹10 lakh) and CGTMSE-backed loans that don't need collateral, plus loans against the promoter's personal assets or credit.

What is the difference between a business loan and a personal loan for business?

A business loan is issued to the business entity, uses the entity's financials, and can be substantially larger. A personal loan for business is issued to the individual and is capped much lower.

Do MSMEs get RBI-mandated benefits?

Yes - priority sector classification, TReDS access, MSME Samadhaan for delayed payments, and CGTMSE credit guarantee up to ₹5 crore.

Business Loan in India

A business loan is credit taken by proprietorships, partnerships, LLPs, or companies to fund working capital, equipment, or expansion. This hub explains the main product types, eligibility bars, and what banks actually look at when underwriting an MSME.

Last updated: 15 June 2025

Guides & explainers

Basics

What is a business loan?

Uses, structures, and how repayment works.

Basics

Types of business loans

Term loan, OD, invoice discounting, and more.

Eligibility

Business loan eligibility

Vintage, turnover, GST filings, and credit score.

Related calculators

General EMI Calculator

Estimate business term-loan EMIs.

Common business-loan structures in India

Type	Best for	Typical rate
Term loan	Machinery, expansion	10% – 18% p.a.
Working capital / OD	Day-to-day cash flow	9% – 15% p.a.
Invoice discounting	Businesses with delayed receivables	10% – 16% p.a.
Mudra loan (up to ₹10 lakh)	Micro enterprises	9.5% – 12% p.a.
CGTMSE-backed loan (up to ₹5 crore)	Collateral-free MSME lending	10% – 15% p.a.

Frequently Asked Questions

What is a business loan?Types of business loans Business loan eligibility EMI calculator Credit score basics