Best Banks to Get Startup Loans

Shruti Kasera Shruti Kasera
Jun 8, 2021 8 min read
Best Banks to Get Startup Loans

Are you one of those who have just started a business and are looking for finance? Do you need funding to boost up your new business? Businesses earn money from money. Here’s a guide that will help you find the best banks to get a startup loan from. Also there are a few important points are mentioned for easy analysis of where to avail of the startup loan and how to go about it.

Is it a good idea to take a Loan from Banks?
List of Best banks to Get Startup Loans
HDFC Bank Business Growth Loans
Citi Bank's Business Loans
ICICI Bank Business Loans
Axis bank business loans
Best Banks for Startup Loans: Conclusion
Best Banks for Startup Loans: FAQs

Is it a good idea to take a Loan from Banks?

Acquiring loans from banks for a startup with a futuristic approach is always a good idea. Loans are regarded as a better source of capital for a gainful business as compared to the share capital as you get to have better leverage. You can enjoy the surplus of the rate of return over the interest you pay for the borrowings.

As a startup, you should never be scared of taking it. Loans enhance the scope of your business by aiding you in expansion as well. On the other hand, it also acts as a catalyst to motivate you for better productivity. You can avail these advantages of acquiring startup loans-

1) You can get a boost to develop an even stronger business plan
2) You can effectively manage the flow of money
3) Higher rate of return on capital

To begin with a startup, you need to be very well aware of how to keep your interest rate as low as possible with maximum benefits.


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List of Best banks to Get Startup Loans

Here is a list of banks that provide startup business loans without much documentation and are preferred among all.

“If you would know the value of money, go and try to borrow some; for he that goes a borrowing goes a sorrowing. “  said Benjamin Franklin.

HDFC Bank Business Growth Loans

HDFC Bank Business Growth Loan | startup loans
HDFC Bank Business Growth Loan | Startup loans

A startup can scale up their business with additional financial help from HDFC bank. Every entrepreneur seeks minimal documentation, flexible tenures, and interest rates that are lower or competitive which you too can get with HDFC. Just check out the following.

Eligibility

  1. Entrepreneurs, Proprietors, Private Ltd. Co., and Partnership Firms involved in       the business of Manufacturing, Trading, or Services.
  2. The business has a minimum turnover of Rs. 40 lakhs.
  3. Individuals currently in business for a minimum of 3 years, with 5 years of business experience.
  4. Business involved in profit-making for past 2 years.
  5. Business should have a Minimal Annual Income (ITR) of Rs. 1.5 lakhs per annum.
  6. The applicant should be at least 21 years at the time of applying for the loan and should be no older than 65 years at the time of loan maturity

Documentation

If you are interested in a business growth loan, then you can apply with the following documentation.

  1. Mandatory Documents [Sole Prop. Declaration Or Certified Copy of Partnership Deed, Certified true copy of Memorandum & Articles of Association (certified by Director) & Board resolution (Original)]
  2. A copy of any of the following documents as identity proof:
  • Aadhaar Card
  • Passport
  • Voter's ID Card
  • PAN Card
  • Driving License

3.  A copy of any of the following documents as address proof:

  • Aadhaar Card
  • Passport
  • Voter's ID Card
  • Driving License

4.  Latest ITR along with computation of income, Balance Sheet, and Profit & Loss account for the previous 2 years, after being CA Certified/Audited

5.  Proof of continuation (ITR/Trade license/Establishment/Sales Tax Certificate)

6.  Bank statement of the previous 6 months

Interest Rate & Charges

Rack interest range is Min 11.90% & Max 21.35%

Loan Processing Charges - Up to 2.50% of the loan amount subject to a minimum of Rs.1000/- and a Maximum of Rs.25,000/- for salaried customers and Rs. 75,000/- for self-employed customers as per the board note.

An additional feature is access to the overdraft facility. You pay interest only on the utilized loan amount together with a credit protection plan.


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Citi Bank's Business Loans

CITI Bank Business Loans | Startup Loans
CITI Banks Business Loans | Startup Loans

It is referred to as Citibusiness which offers business loans through which startup can manage working capital efficiently. A startup can also opt for diversified MSME loan products which include working capital loans, short term loans, long term loans, overdrafts, and export-import finance facilities too.

Only 2% processing is charged on the sanctioned amount of the loan. Also, there are pre-closure charges (2%) and renewal fees (2%).

Whereas, Citibank hasn’t mentioned any loan amount, interest rate, tenure related details on its website.


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ICICI Bank Business Loans

ICICI Bank Business Loans | Startup Loans
ICICI Bank Business Loans | Startup Loans

ICICI also provides startup loans. It has come up with 'iStartup 2.0', which brings a wide range of business solutions that assists you beyond your business and banking needs that help you save time and effort, and allow you to focus on your core business functions. This facility has clearly been brought up for the startups to avail loans.

If you go with iStartup 2.0, including banking services, a lot of other services are also provided to you that play a very important role for the growth of the business such as debit cards with limits and much more.

You can get your company registered here, GST services, ROC filing, stamp paper, property registration, personalized Website, and wholesale growth.

Eligibility

Partnership firms, LLPs, Private and Public limited companies, one person companies(OPCs).

You have to opt for one of the 3 packages. In Platinum, the average quarterly balance has to be rupees 500,000. For Gold, it’s rupees 100,00 and for silver, it’s rupees 25,000.

Other benefits

  • No QAB requirement up to 1 year
  • Premium savings account
  • Networking solutions
  • FD OD & LAS
  • API & connected banking solutions

Services offered

  • Company registration
  • GST/IT related services
  • Property Registration
  • Traveling facility
  • Marketing support
  • Identity pack
  • Ecommerce pack
  • Digital marketing pack and many more.

If you go with istartup 2.0, you are provided with the perfect solution for healthcare, IT & services, real estate, manufacturing. In short, it might prove to be a small step for a big leap.

If you are one of the customers of ICICI bank, then you will appreciate the services provided by ICICI banks. With istartup2.0 you will also get Startup Assist which is an exclusive bundle of services to simplify your startup operations.


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Axis bank business loans

Axis Bank Business Loans | Startup Loans
Axis Bank Business Loans | Startup Loans

Axis bank is one of the banks which can be the best fit for you. Let's dive into it to know more about it features, eligibility, and documentation.

Features-

  1. No collateral- Yes, you would not be asked for any collateral and it's one of the eye-catching features among all which only specific banks provide.
  2. Maximum Loan up to Rs. 50 lakhs.

For more information, just visit the official website or contact customer care/ nearest branch.

Best Banks for Startup Loans: Conclusion

These are best suited for startups, self-employed, small businesses, professionals, and individuals having a profitable business. Usually, entrepreneurs owning the startups try to earn money on their own and invest in their businesses and get on track. If you rewind the history, then among those availing loans very few can utilize the sanctioned funds wisely.

Bank loans become a big problem for some but the only thing you must learn is to take advantage of the facility wisely.


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Best Banks for Startup Loans: FAQs

Which bank gives business loan easily?

  • HDFC Bank Business Growth Loans
  • Citi Banks Business Loans
  • ICICI Bank Business Loans
  • Axis bank business loans

What is a good credit score to get a business loan?

A Credit score of 650 is considered good to get a business loan.

For a collateral-free business loan: Credit score above 700.
For a secured business loan: Credit score 650 - 700.

How do I qualify for a business loan?

Below Requirements are needed to qualify for a Business Loan.

  • Business Credit Score
  • Annual Revenue of your Business
  • Updated Business Plan with projected financial statements
  • Additional financial collateral to secure the loan

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