What is the minimum business vintage required?⌄
Most banks require 2+ years of stable business operation with positive income. Some specialised lenders accept 1 year for strong profiles. For startups under 1 year, Mudra Yojana and government-backed schemes may be accessible.
Can I get a business loan without collateral?⌄
Yes — up to ₹5 Cr through unsecured term loans for strong profiles. Government-backed credit guarantee schemes allow banks to lend without collateral to MSMEs. Mudra Yojana offers up to ₹10 Lakh fully collateral-free.
What is the Mudra Yojana scheme?⌄
PM Mudra Yojana offers collateral-free loans: Shishu (up to ₹50K), Kishor (₹50K–₹5L), Tarun (₹5L–₹10L). Available from banks and MFIs. No processing fee. Ideal for micro businesses, street vendors, home-based businesses, artisans.
Is GST registration mandatory for a business loan?⌄
GST registration strengthens your application significantly and is practically required above ₹20L loan. For smaller amounts (Mudra), it is helpful but not always mandatory. We advise getting registered if your turnover qualifies.
What is working capital vs term loan?⌄
Working Capital: Revolving credit for daily operations (inventory, payroll, overheads). Cash Credit or Overdraft — use as needed, pay interest on drawn amount. Term Loan: Fixed amount disbursed once, repaid in EMIs. For specific capital expenditure or expansion.
Can a startup less than 2 years old get a business loan?⌄
Traditional bank loans are difficult under 2 years. Options: (1) Mudra Yojana — available to new businesses, (2) Fintech NBFCs — more flexible on vintage, (3) Invoice discounting — if you have customer invoices, (4) Collateral-backed loan against personal property.
How does invoice discounting work?⌄
You submit unpaid customer invoices to a lender. They advance 70–90% of the invoice value immediately. When your customer pays (30–90 days later), you receive the balance minus fees. No traditional collateral needed — the invoice is the security.
What is CGTMSE scheme?⌄
Credit Guarantee Fund Trust for Micro and Small Enterprises provides guarantee coverage (75–85%) to banks for MSME loans up to ₹5 Cr. Banks are more willing to lend since most of the risk is covered. Enables collateral-free lending for eligible MSMEs.
What turnover do I need for a ₹1 Cr business loan?⌄
General benchmark: banks lend 2–3× annual turnover for term loans and 20–25% of turnover for working capital. For ₹1 Cr, annual turnover of ₹40–50 Lakh+ with 2 years of stable profits is typically needed.
How long does business loan approval take?⌄
7–15 working days for standard term loans. Working capital facilities (OD/CC) may take 10–20 days including property valuation if secured. We prepare your file correctly the first time — reducing back-and-forth delays.
Can a woman entrepreneur get special rates?⌄
Yes. Many banks and government schemes offer preferential rates for women-owned businesses — lower interest rate, reduced processing fee, relaxed eligibility. Schemes like Stree Shakti, Mahila Udyam Nidhi specifically target women entrepreneurs.
What is the difference between OD and CC?⌄
Overdraft (OD): Linked to current account. Overdraw up to approved limit. Better for occasional large needs. Cash Credit (CC): Separate credit account. Primarily for working capital with monthly interest on drawn balance. Both are revolving — repay and redraw.