India has become one of the fastest-growing startup hubs in the world. With government initiatives like Startup India and a thriving entrepreneurial culture, lakhs of young entrepreneurs are starting their ventures every year. However, the biggest challenge most startups face is funding.
While venture capital and angel investors are popular sources, many startups rely on business loans from private banks and NBFCs to get the initial push. In 2025, financial institutions are offering tailored business loan products to support startups with low-interest rates, collateral-free options, and flexible repayment schedules.
This article explores how startup business loans work, their benefits, interest rates, top banks/NBFCs offering them, and the process to apply.
What is a Business Loan for Startups?
A business loan for startups is a form of financing provided by banks or NBFCs to help new businesses cover their operational costs, purchase equipment, manage cash flow, or expand operations.
- Loan Type: Secured (against collateral) or unsecured
- Loan Amount: ₹50,000 – ₹5 Crores (depending on lender)
- Interest Rate: 10% – 22% p.a. (in 2025)
- Tenure: 1 – 7 years
Why Choose a Business Loan for Your Startup?
✅ Benefits:
- No need to dilute equity (unlike VC funding)
- Collateral-free loans available with NBFCs
- Flexible repayment with EMIs or overdraft facilities
- Fast disbursal – Some lenders provide funds within 48 hours
- Builds business credit history for future financing
❌ Drawbacks:
- Higher interest rates compared to corporate loans
- Limited loan amount for new businesses with no track record
- Default can impact credit score and future funding opportunities
Top Private Banks Offering Startup Business Loans in India 2025
1. HDFC Bank Business Loan
- Interest Rate: 11% – 20% p.a.
- Loan Amount: ₹50,000 – ₹50 Lakhs
- Tenure: 1 – 4 years
- Processing Fee: Up to 2%
- Features:
- No collateral required
- Instant approval for existing customers
- Minimal documentation
2. ICICI Bank Business Loan
- Interest Rate: 12% – 22% p.a.
- Loan Amount: ₹1 Lakh – ₹40 Lakhs
- Tenure: 1 – 7 years
- Processing Fee: 2%
- Features:
- Customized loans for startups and MSMEs
- Overdraft facility available
- Digital application process
3. Axis Bank Business Loan
- Interest Rate: 10.5% – 19% p.a.
- Loan Amount: ₹50,000 – ₹50 Lakhs
- Tenure: 1 – 5 years
- Processing Fee: 1.75% – 2%
- Features:
- Unsecured loan for startups with turnover history
- Easy EMI options
- Quick processing
4. Kotak Mahindra Bank Startup Loan
- Interest Rate: 12% – 20% p.a.
- Loan Amount: ₹3 Lakhs – ₹40 Lakhs
- Tenure: Up to 5 years
- Processing Fee: 2%
- Features:
- Flexible repayment tenure
- Collateral-free loan for small startups
- Pre-approved offers for existing customers
5. Yes Bank Business Loan
- Interest Rate: 10% – 20% p.a.
- Loan Amount: ₹5 Lakhs – ₹50 Lakhs
- Tenure: 1 – 5 years
- Processing Fee: 2%
- Features:
- Attractive offers for women entrepreneurs
- Digital loan disbursal
- Startup-friendly schemes
Top NBFCs Offering Startup Business Loans in 2025
1. Bajaj Finserv
- Interest Rate: 12% – 22% p.a.
- Loan Amount: Up to ₹45 Lakhs
- Tenure: 1 – 7 years
- Features:
- No collateral required
- Flexible prepayment options
- Loans for small businesses and professionals
2. Tata Capital
- Interest Rate: 12% – 21% p.a.
- Loan Amount: ₹5 Lakhs – ₹75 Lakhs
- Tenure: 1 – 5 years
- Features:
- Collateral-free loan
- Step-up repayment option
- Quick approval within 48 hours
3. Aditya Birla Finance
- Interest Rate: 13% – 20% p.a.
- Loan Amount: Up to ₹50 Lakhs
- Tenure: 1 – 5 years
- Features:
- Business loans for startups and SMEs
- Fast online process
- Flexible repayment schedules
4. IIFL Finance
- Interest Rate: 12% – 22% p.a.
- Loan Amount: ₹50,000 – ₹30 Lakhs
- Tenure: 1 – 5 years
- Features:
- Doorstep loan service
- Loans for traders, manufacturers, and professionals
- Easy digital tracking
Eligibility Criteria for Startup Business Loans
- Age: 21 – 65 years
- Business Type: Proprietorship, Partnership, LLP, Pvt. Ltd.
- Turnover: Minimum ₹10 Lakhs (varies by bank)
- Credit Score: 700+ preferred
- Business Vintage: At least 1–2 years (some NBFCs support new businesses with no history)
Documents Required
- Business registration documents
- PAN & Aadhaar of promoters
- GST certificate
- Bank statements (6–12 months)
- Income proof (ITR, balance sheet, P&L)
- Business plan (for new startups)
Step-by-Step Process to Get a Startup Business Loan
- Check eligibility with banks/NBFCs
- Compare interest rates & loan terms
- Prepare business documents (plan, financials, GST, etc.)
- Apply online/offline with preferred lender
- Loan approval & verification by bank/NBFC
- Loan disbursal directly to business account
- Repayment through EMI/overdraft facility
Tips to Get the Best Startup Loan Deal
- Maintain a good credit score (700+)
- Prepare a solid business plan to convince lenders
- Compare offers from banks and NBFCs before applying
- Start with smaller loans to build credibility
- Apply under government-backed startup/MSME schemes if eligible
FAQs
1. Can I get a startup loan without collateral?
👉 Yes, many NBFCs and private banks offer unsecured loans up to ₹50 Lakhs.
2. What is the minimum turnover required for a startup loan?
👉 Some lenders require ₹10 Lakhs annual turnover, while NBFCs may finance even new businesses.
3. Which is better for startups: bank loans or NBFC loans?
👉 Banks offer lower interest rates, while NBFCs provide faster approvals and flexible terms.
4. How much loan can a startup get in India?
👉 Between ₹50,000 and ₹5 Crores, depending on business profile and lender.
5. Can women entrepreneurs get special business loans?
👉 Yes, several banks and NBFCs offer reduced rates and priority processing for women-led startups.
Conclusion
In 2025, business loans for startups in India have become more accessible with private banks like HDFC, ICICI, Axis, Kotak, and Yes Bank, along with NBFCs like Bajaj Finserv, Tata Capital, and IIFL Finance, offering tailored financial products.
For entrepreneurs, securing a business loan can provide the fuel to kickstart and scale operations without depending entirely on investors. However, it is important to compare offers, understand repayment obligations, and borrow only what your business can comfortably repay.
With the right financial partner, your startup can move from an idea to a successful enterprise.
