Often unsecured
Sized on turnover, profit, banking behaviour and vintage rather than on a specific asset.
Business & working capital · Loan guidance
Business loan, explained.
Funding for a running business, read from turnover, banking and vintage rather than from a single asset.
What it is
The instrument, in plain terms.
A loan to a business — often unsecured — sized on turnover, profitability, banking behaviour and how long the business has been running.
It can suit
- Operating businesses with documented turnover and clean banking.
- A defined working-capital or expansion need that the cash flow can service.
- Owners prepared to give a personal guarantee, as most such loans require.
It may not suit
- Pre-revenue or very new ventures with little trading history.
- Businesses that run largely in cash with thin or inconsistent records.
The lender’s view
How a lender reads this.
Turnover and margin
The lender reads size together with profitability, not turnover alone.
Business vintage
How long the business has traded is often a hard eligibility line.
Banking and tax records
Bank statements, returns and GST filings are cross-checked against each other.
Owner and guarantor profile
The promoter's credit behaviour and willingness to guarantee carry real weight.
Lenders decide on their own assessment. Our work is to make your case complete, consistent and genuinely ready to be read.
Our work
What we prepare with you.
Reconciled banking, returns and GST records that tell one consistent story.
A specific use of funds, tied to something the business will earn from.
An honest view of seasonality, so the repayment plan survives the lean months.
The owner's and any guarantor's profiles prepared before they are examined.
Preparation
What a lender usually asks for.
- Business registration, PAN and, where applicable, GST registration.
- Audited financials and income-tax returns for recent years.
- Bank statements for the last twelve months on the operating account.
- GST returns, which lenders cross-check against bank credits.
- The owner's identity, address and personal financials.
- A note on the use of funds and how they will be repaid.
Mechanics
How it is usually structured.
The shape a lender will typically put around this facility.
Short to medium tenure
Commonly one to five years, repaid in instalments or structured payments.
Guarantee
The owner usually gives a personal guarantee, linking the loan to personal as well as business credit.
Common mistakes
Where borrowers go wrong.
None of these are exotic. They are the ordinary errors that turn a workable requirement into a difficult application.
Mixing personal and business finances
Intermingled accounts make the business look smaller and riskier than it is.
Under-reporting to save tax
It shrinks both documented turnover and the eligibility built on it.
Borrowing what cannot be serviced
A loan sized to ambition rather than cash flow is a problem waiting for a slow quarter.
The full cost
What it costs, beyond the rate.
- Processing fee
- A percentage of the sanctioned amount, plus tax.
- Renewal or annual review
- Some facilities carry a periodic review charge.
- Personal guarantee
- Not a fee, but a real exposure to understand before signing.
- Late or missed instalments
- Penal charges and a credit mark on the owner as well as the business.
Language
Terms worth knowing.
- Turnover
- Total sales in a period; a starting point, not a measure of profitability.
- GST returns
- Filed tax returns on sales that lenders use to verify declared turnover.
- Personal guarantee
- The owner's personal commitment to repay if the business does not.
Repayment estimate
What the instalments might look like.
Adjust the amount, rate and tenure for an indicative instalment and total cost. It is a planning aid, not a quote.
Tenure
Estimated monthly instalment
- Total interest
- ₹37,89,715
- Total payable
- ₹72,89,715
- Tenure
- 20 yr
- Principal₹35,00,000
- Interest₹37,89,715
Year-by-year repayment schedule
| Year | Principal | Interest | Balance |
|---|---|---|---|
| 1 | ₹69,658 | ₹2,94,828 | ₹34,30,342 |
| 2 | ₹75,815 | ₹2,88,671 | ₹33,54,527 |
| 3 | ₹82,517 | ₹2,81,969 | ₹32,72,010 |
| 4 | ₹89,810 | ₹2,74,676 | ₹31,82,200 |
| 5 | ₹97,749 | ₹2,66,737 | ₹30,84,451 |
| 6 | ₹1,06,389 | ₹2,58,097 | ₹29,78,063 |
| 7 | ₹1,15,793 | ₹2,48,693 | ₹28,62,270 |
| 8 | ₹1,26,028 | ₹2,38,458 | ₹27,36,243 |
| 9 | ₹1,37,167 | ₹2,27,319 | ₹25,99,075 |
| 10 | ₹1,49,292 | ₹2,15,194 | ₹24,49,784 |
| 11 | ₹1,62,488 | ₹2,01,998 | ₹22,87,296 |
| 12 | ₹1,76,850 | ₹1,87,636 | ₹21,10,446 |
| 13 | ₹1,92,482 | ₹1,72,004 | ₹19,17,964 |
| 14 | ₹2,09,496 | ₹1,54,990 | ₹17,08,469 |
| 15 | ₹2,28,013 | ₹1,36,473 | ₹14,80,456 |
| 16 | ₹2,48,167 | ₹1,16,318 | ₹12,32,288 |
| 17 | ₹2,70,103 | ₹94,383 | ₹9,62,185 |
| 18 | ₹2,93,978 | ₹70,508 | ₹6,68,207 |
| 19 | ₹3,19,963 | ₹44,523 | ₹3,48,245 |
| 20 | ₹3,48,245 | ₹16,241 | ₹0 |
Indicative only. Not specific to your circumstances. It excludes processing fees, insurance, taxes and any lender-specific charges, and it is not an offer of credit.
On rates
Why we don’t publish a single rate.
Pricing is set by each lender, not by us. Two borrowers approaching the same lender on the same day can be offered different rates, because the number reflects both the facility and the person behind it.
What moves the rate you are offered:
- Your credit record and how past borrowing has been serviced.
- The security offered, and how readily it could be realised.
- The tenure and the structure of the facility.
- Your income or business profile, and how well it is documented.
- The lender’s own cost of funds and internal policy.
- Fees, insurance and margin that belong in the all-in cost, not the headline.
A single advertised rate would misrepresent all of that. What we do instead is help you compare the whole cost, and understand what is actually negotiable in your case.
Questions borrowers ask
Why does under-reporting hurt me?
- Lenders size the loan from documented turnover. A smaller declared business means a smaller eligible loan.
Do I need a personal guarantee?
- Most unsecured business loans require one. It is a genuine obligation, not a formality.
Can a new business qualify?
- Vintage is often a hard requirement. Below it, lenders may look at secured options instead.
Adjacent borrowing
Related options.
Borrowers considering business loan often weigh these alongside it.
Term loan
A long-tenure loan for a specific purpose — machinery, premises or a project — repaid on a fixed schedule.
↗Cash credit
A running working-capital limit drawn against stock and receivables, renewed periodically.
↗Loan against property
Borrowing against property you already own, for purposes that may have nothing to do with the property itself.
↗Begin here
Discuss this requirement.
Tell us the broad shape of what you need — amount, purpose and timeline. Nothing confidential at this stage.
The Loan CA prepares and advises; it does not lend and cannot promise an approval. Every credit decision rests with the lender, subject to their assessment, documentation and applicable terms. The Loan CA is not licensed, registered or regulated by the Reserve Bank of India, and is not approved, endorsed by, or affiliated with the RBI or the Institute of Chartered Accountants of India (ICAI). Full disclosures →