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.
Updated
Rates checked against the lenders' official pages on 28 September 2026. Your actual rate depends on your profile; confirm with the lender before you apply.
Official rate pages: HDFC Bank
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- DecisionBest business loan providersRanked banks + NBFCs for MSME lending.
- BasicsWhat is a business loan?Uses, structures, and how repayment works.
- BasicsTypes of business loansTerm loan, OD, invoice discounting, and more.
- EligibilityBusiness loan eligibilityVintage, turnover, GST filings, and credit score.
- SchemeMUDRA loan under PMMYShishu / Kishor / Tarun tiers and how to apply.
- SchemeCGTMSE collateral-free schemeHow the government guarantee enables no-collateral MSME loans.
Banks and their rates
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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. |
Term loan
- Best for
- Machinery, expansion
- Typical rate
- 10% – 18% p.a.
Working capital / OD
- Best for
- Day-to-day cash flow
- Typical rate
- 9% – 15% p.a.
Invoice discounting
- Best for
- Businesses with delayed receivables
- Typical rate
- 10% – 16% p.a.
Mudra loan (up to ₹10 lakh)
- Best for
- Micro enterprises
- Typical rate
- 9.5% – 12% p.a.
CGTMSE-backed loan (up to ₹5 crore)
- Best for
- Collateral-free MSME lending
- Typical rate
- 10% – 15% p.a.