How to get a business loan in Maharashtra

Maharashtra is a unique state in terms of its geography and business dynamics. It is home to billionaires, big industrialists and many startups such as Apna, Reliance Jio, Upgrad, and many more. If you want your business to be known domestically as well as globally you may require a business loan. 

Getting a business loan can be difficult. You may not know where to begin, which kind of business loan will be best for you, and how to take a business loan. In this article, we will help you understand business loans basics and how to take them work for you in Maharashtra. 

Let’s learn a little bit about Maharashtra and what it has to offer in terms of business opportunities. 

Maharashtra: Business Opportunity & Landscape

Maharashtra is located in the central part of India. Mumbai City is its capital. Maharashtra is surrounded by states of Gujarat, Telangana, Madhya Pradesh, Karnataka, Chhattisgarh, and Goa. Among all the Indian states, Maharashtra leads in industrial and agricultural production, education, and transport. Its capital city, Mumbai, is the home of Bollywood. 

In terms of business, Maharshthra is a blooming state with Mumbai known as the “Financial capital of India”. Another state of Maharashtra, Pune is emerging as an educational hub. The state is famous for its production of jeeps, three-wheelers, cars, cold-rolled products, and industrial alcohol. The Maharashtra’s government has also founded Maharashtra Industrial Development Corporation (MIDC) that aims to provide infrastructure like roads, land, land, drainage facilities, etc. to businesses. In the agricultural sector, Maharashtra is the main producer of rice, sugarcane, oilseeds, etc. 

Why do you need a Business loan?

Loans are an important part of business. There are multiple ways to generate funds like from  banks, NBFC or crowdfunding. 

But timing is also important in taking a business loan as you have to pay back the loan amount and if you are not making reasonable profits then it may become difficult to do so.

You may require business loan for the following reasons:

To pay the due bills: It is okay for unpaid bills to rack up in the course of business. But a business loan can certainly help you come out of that difficult situation and pay some of the bills so as to not affect the daily business.

To hire new employees: A business loan will help you attract talented individuals to your company that will ultimately help you grow your business. 

To improve your hardware: As your business grows, you may need to either change or buy new hardware. Additionally, you can sell the old machinery to earn at least something. 

To expand your business: When you run out of space for your business and it starts to affect your efficiency then maybe it’s time for expansion. You can use a business loan to move into a new location. 

Reasons you should take Business loan in Maharashtra

As we learned, business loans can be very helpful to grow your business. Here are some of the reason why you should take a business loan in Maharashtra:

To open an acting school: Bollywood and Maharashtra are almost synonyms. Owing to its popularity, you can open up an acting school. An acting school will also help upcoming actors to find their ways in the industry. 

To open a recycling business:  E-waste and garbage poses a serious threat to the environment and with Maharashtra large-scale industries this has become a major problem. Opening a recycling business can not only be profitable but you will also be helping the environment.

To open a bar lounge: A lounge or a restaurant is very attractive to people, especially youths. With a business loan you can build a unique looking bar lounge that is appealing to the people.

To open a Import-export business: with Maharashtra being so attractive to domestic as well as foreign firms, opening a import-export business can be very beneficial. Your business can focus on many things such as fruits and vegetables, electronic products, materials like copper, leather goods, etc.

To open a travel agency: Maharashtra is home to many famous monuments like, Marina drive, Gateway of India, Ajanta cave, etc. 

Which are the best business loans in Maharashtra?

Now that you know the reason why taking a business loan can be beneficial, you need to determine which kind of business loan you will require. Every type of business loan is created for a different purpose. Given below are some kinds of business loans you can get:

Start-up loan: As the name suggests, this kind of business loan can be perfect to grow your business. Here, the applicants may not have the best credit history so their personal credit history will be considered by the lender.

Equipment financing: If you have a manufacturing business then this type of loan will be suitable for you. Here, equipment is taken as security against the loan.  

Term loan: If your business generates steady income then this type of loan will be suitable for you. Here, the loan amount is repaid over a specified period.

Invoice financing: This type of loan is given against the amount raised in the invoice of the business.

The government also offers various kinds of business loans for startups as given below:

Pradhan Mantri Mudra Yojana (PMMY): This scheme was introduced in 2015 and its main purpose is to provide loans to manufacturing, service, and trading activities.

Standup India: Standup India was introduced in 2016. You can take loans ranging from Rs. 10 lakh to 1 crore.

Credit Guarantee Scheme (CGS): This loan can be taken by both new and current industries and up to Rs. 2 crore can be taken as a loan amount under this scheme.

Bank Credit Facilitation Scheme: National Small Industries Corporation (NSIC) governs this scheme. This scheme aims to provide business loans to MSME units. 

Top 10 Banks and NBFCs that Offer Business Loan in Maharashtra

Both banks and NBFCs offer business loans. Every bank offers business loans at different interest rates. Here is the list of banks & NBFCs you can approach for a business loan.

HDFC Bank

HDFC bank Ltd is among the leading banks in terms of market value. They provide various services that include retail banking, auto loans, personal loans, wholesale banking and loans against properties. 

Key highlights of HDFC bank

• Interest rate- 15.75%

• Security not necessary 

• Loan tenure-12 to 48 months

• Processing charge- 2% of amount 

• Overdraft facilities-5 lakh to 15 lakh

• Amount-  up to 40 lakh

ICICI Bank

ICICI bank is a multinational bank that offers a range of services to its customers that includes, mortgage loan, corporate and consumer banking, wealth management, term loans, Insta OD, and GST business loan.

Key highlights of ICICI bank

• Interest rate- up to 17% p.a. for unsecured loans, up to 11.40% for secured loans, and up to 12% of Stand up India and CGTMSE schemes.

• Processing fee- 2% for unsecured loans, and 1% on secured loans

• Loan amount- 1 lakh to 40 lakh

• Simple documentation process

Axis Bank

Axis bank is a leading private sector bank in terms of assets and market value. They offer business loans to new and existing businesses, retail business, SMEs, MSMEs, with short and long term options. 

Key highlights of Axis bank

• Interest rate-14.64% to 18.90% p.a. 

• Processing fee- 2% of the amount

• Loan amount- 50,000 to 50 lakhs

• Repayment tenure- 1 to 5 years

• Require existence of business for a minimum of three years

• Collateral not required

• 24/7 business loans

Bank of Maharashtra

The Bank of Maharashtra comes under the ministry of finance. This is one of the largest banks in Maharashtra. This bank offers personal banking services, deposits, loans to MSME, corporates, and NRI customers. 

Key highlights of Bank of Maharashtra

• Interest rate-14.50%

• Loan tenure-12 to 36 months

• Loan amount- 50,000 to 1.50 lakh

• Processing fee- 3% of amount

• Foreclosure facility not allowed

• Offers various schemes tailored specifically for MSMEs which include, Mahabank GST Credit Scheme, Mahabank Scheme for contractors, vehicle loan scheme for small road transport operators, MSME project loan scheme, TReDS, Loan scheme for doctors, and professional loan scheme.

Kotak Mahindra bank

Kotak Mahindra bank offers services like Life insurance, investment banking, Kotak Realty Fund, Kotak Private Equity, Mutual funds, Securities, Wealth management, and Car finance.

Key highlights of Kotak mahindra bank

• Loan amount- 3 lakhs to 75 lakhs

• Interest rate- 16% to 19.99% p.a. 

• No collateral in required

• Speedy approval

• They provide business loan along with doorstep services

• Processing fee- 2% of amount plus the applicable taxes

• Loan tenure- Up to 4 years

Yes bank

Yes Bank is the 6th largest bank in India. They provide services like Loans, debt capital markets, digital banking, Yes corporate credit card, Yes MSME loans, and investment banking solutions. 

Key highlights of Yes bank

• Loan amount- up to Rs. 50 lakhs

• Interest rate- not mentioned directly.

• Loan tenure- 12 to 60 months

• Collateral-free loan.

IndusInd bank

IndusInd bank is a new-gen private sector bank. The services they offer include retail banking, electronic banking, transactional and commercial lending, consumer finance, and investment banking.

Key highlights of IndusInd Bank

• Interest rate- fixed at 13% to 22% 

• Processing fee- 3%

• Cheque dishonour charges- Rs. 500

• Loan tenure- up to 36 months

• Loan amount- up to 5 months

• Door step business loan service available 

Muthoot Finance

Muthoot Finance is the biggest gold loan NBFC in India. If you have gold jewellery or gold products then you can use it to take a loan from this NBFC. They offer business loans to SME, individuals, public and private limited companies, and MSMEs.

Key highlights of Muthoot Finance

• Interest rate customizable into categories given by the bank.

• Loan amount starting from Rs. 5000.

• Loans are secured against gold. 

• Loan can be repaid with Equated Daily Instalment.

Bajaj Finserv

Bajaj Finserv is among the leading NBFC in India. The main focus of Bajaj Finserv are lending, wealth management, and insurance. In terms of business loan, they provide Start-up business loan, MSME loans, working capital loan, and Flexi loans.This is a very famous NBFC that you may have heard of and is another good option to get a business loan from.

Key highlights of Bajaj Finserv

• Interest rate- 17% p.a. Onwards

• Processing fee- 2% on the loan amount plus the taxes applicable

• Loan amount- up to 45 lakhs

• Collateral not required

• Minimum documents and hassle-free process

• Easy access to an online account to know details about the loan.

HDB financial services

HDB financial services offers like business loans, Vehicle loans, Auto loans, loans against properties, Gold loans, and personal loans.

Key highlights of HDB financial services

• Loan amount- 30 lakhs

• Loan tenure 12 to 48 months

• Speedy loan disbursal

• No collateral required

• Interest rate- as per the profile and requirement of the applicant.

Conditions for loan eligibility

Now that you know the highlights of the banks and NBFCs, let us learn about the conditions to be eligible for a loan. The conditions required by a particular bank may differ from other banks.

These are some general conditions.

• Existing and new customers can avail of a business loan. 

• People and entities that are eligible for taking a secured business loan include, individuals, SME, MSME, Partnership firm, Limited liability company, and proprietorship firm.

• Professionals that include CAs, doctors, etc and non-professional individuals like manufacturers, traders are also eligible to take a business loan.

• The candidate should have a good repayment history.

•  The candidate should have a good credit score.

• The person should be at least 18 years old and no older than 65 years old.

• The business must exist for a minimum of 2 years.

• Business must have earned profit in the previous 2 years.

• The candidate must be owner property that include shop, residence, or a factory

• The profit and loss statement of the candidate must meet the criteria mentioned by the lender.

Documents required for a Business loan

If you fall the above mentioned criteria, then here are the documents that are needed to take a business loan. But, some lenders may ask for other documents.

• For personal identity, a duplicate of any documents which includes Passport, PAN card, Voter’s ID card, Driving Licence, or Aadhar card is required.

• For proof of address, a duplicate of any document which includes Passport, Driving licence, Voter’s ID card or Aadhar card is required.

• The most recent ITR with Balance sheet, computation of income, and P&L account of previous 2 years after it has been certified or audited a C.A  is required

• Continuing proof is required which includes ITR, certificate of sales tax, trade licence, and establishment tax is required.

For self employed people that include Partnership firm and private Ltd. Co, you need to furnish Sales tax, Service tax, VAT, Excise registration, Water, IT return of the concern, PAN ID, Registration under Shops and Establishment Act, Memorandum and Articles of Association, Municipal tax and Electricity bill as identity proof.

For the identity proof of sole proprietorship, you need PAN ID or IT return of the concerned person, Electricity or water bill of the concerned person, or Municipal tax.

For non-professional self-employed individuals, you need an ITR of 3 years, identification proof of sole proprietorship. Identity proof of the individual, past three years of sale tax returns, and the duplicate of the bank statement of the term loan. 

Process to apply

The process to apply for a business loan is very simple nowadays. Mentioned below are the steps for taking a business loan online.

• Open the website of the the preferred bank or NBFC and find the loan tab

• Click on the loan tab and select the business loan. You will see a link or an application on the website itself. 

• Fill out the application with correct details and click on next. 

• Upload the required documents when asked and submit the form

• If your application is approved then you will be informed and the loan amount will be reflected in you bank account within few days

Mentioned below are the steps for taking a business loan offline.

• Visit the office of the preferred Bank or NBFC

• Inquire about the business loan application.

• Fill out the application correctly and ask in case of any doubt

• Keep all the required documents with you and submit them if asked

• Attest the form and submit it. The bank will then authenticate the application and other submitted documents.

•  If your application is approved then you will be intimated and the loan amount will be reflected in your bank account in a few days.