| BANKS/NBFCs | INTEREST RATES | LOAN TENURE | PROCESSING FEES |
| Standard Chartered Bank | 15%-18% (p.a) | 1-4 Years | Upto 2% |
| Deutsche Bank | 16%-18% (p.a) | 1-4 Years | Upto 2% |
| HDFC Bank | 15%-18% (p.a) | 1-4 Years | Upto 2% |
| ICICI Bank | 15%-18% (p.a) | 1-4 Years | Upto 2% |
| Kotak Mahindra Bank | 15%-18% (p.a) | 1-4 Years | Upto 2% |
| Axis Bank | 15%-18% (p.a) | 1-4 Years | Upto 2% |
| RBL | 15%-18% (p.a) | 1-4 Years | Upto 2% |
| IDFC First bank | 15%-18% (p.a) | 1-4 Years | Upto 2% |
| Yes Bank | 16%-18% (p.a) | 1-4 Years | Upto 2% |
| Aditya Birla Finance Limited | 16%-19% (p.a) | 1-4 Years | Upto 2% |
| Tata Capital | 16%-19% (p.a) | 1-4 Years | Upto 2% |
| Hero Fincorp Ltd | 16%-19% (p.a) | 1-4 Years | Upto 2% |
| Bajaj Finance ltd | 16%-19% (p.a) | 1-4 Years | Upto 2% |
| NeoGrowth | 16%-19% (p.a) | 1-4 Years | Upto 2% |
| U Gro | 16%-19% (p.a) | 1-4 Years | Upto 2% |
Business Loan in Mumbai: Considered the Commercial Capital of India, Mumbai supports hundreds of businesses and is often called the ‘City of Dreams’. It has a thriving entertainment industry, along with several businesses functioning in the services sector catering to the urban population of the city.
Access to credit thus plays a determining role in not only the health of those businesses but also the economy of Mumbai and other cities associated with it through trade terms. Thus, lenders usually provide various types of business loans, including loans for buying equipment, working capital loans, pre and post-shipment credit, invoice discounting facilities, inter alia.
Despite the availability, a business loan in Mumbai can however to difficult to access. Most companies at times do not have the know-how of the financial domain to get a business loan suitable for their business. They are often in the dark about the business loan eligibility criteria, the required documents, and the process of applying for a loan in Mumbai.
This often hampers their ability to get timely access to credit, leading to cash flow inefficiencies, in turn forcing businesses to take loans from informal sources at higher rates of interest and terms detrimental to business health.
Let us then understand the different types of Business loans in Mumbai, the essential documents required, the interest rates and charges applicable to business loans, and the loan application process to bridge the gap between businesses and lenders in Mumbai.
The Economy of Mumbai
Mumbai is the financial capital of India, with the Bombay Stock Exchange (BSE), the Reserve Bank of India (RBI), and lots of other financial institutions. The city’s financial district, including places like Dalal Street and Nariman Point, is a busy hub for banking, stock trading, and other financial stuff. Mumbai is also a big centre for offices and headquarters of both Indian and international companies.
There are also a bunch of major industrial and business companies here, which is a big deal for the country’s business scene. And of course, Mumbai is home to Bollywood, India’s awesome film industry, with Film City and a bunch of production houses. The film and entertainment industry doesn’t just help the city’s economy but also plays a huge role in India’s cultural exports.
Mumbai Port is one of the biggest and busiest ports in India, with a lot of trading going on. It’s a super important gateway for imports and exports, making Mumbai a crucial centre for international trade. And lastly, Mumbai is growing in the IT sector, with a bunch of IT companies and tech parks in the city and its suburbs. The IT industry here is diverse, with software development, IT consulting, and business process outsourcing (BPO) services.
Purpose of Business Loans in Mumbai
In Mumbai’s bustling financial hub, businesses often turn to loans for a variety of creative purposes, fueling growth and navigating the dynamic economic landscape.
- Business loans can help fund office expansions, allowing companies to scale up and make their mark on the impressive skyline.
- Media and entertainment businesses may take loans to finance creative projects, movie productions, or innovative digital content, turning their visions into reality on the big screen.
- In Mumbai, businesses often seek loans to invest in cutting-edge technologies, whether that means developing innovative software, upgrading IT infrastructure, or embracing digital solutions to stay ahead in the tech race.
- In the city known for fashion and glamour, the garment and retail industry may use loans to launch new fashion lines, revamp stores, or participate in high-profile fashion events, putting Mumbai’s style in the spotlight.
- Businesses involved in shipping, logistics, and maritime trade in Mumbai’s coastal location may utilize loans to improve their fleets, upgrade port facilities, or invest in state-of-the-art logistics solutions.
- Mumbai’s entrepreneurial spirit thrives in its startup ecosystem, and business loans can be the catalyst that startups need to innovate, hire talent, and disrupt industries.
- Mumbai’s commitment to sustainability also encourages businesses to go green, and loans can finance eco-friendly initiatives like solar installations, energy-efficient upgrades, or environmentally conscious practices, helping to make Mumbai cleaner and greener.
Types of Business Loans in Mumbai
There are various types of Business Loans offered in Mumbai, some of which include:
| Business Loan Type | Uses |
| Unsecured Business Loans | These are term loans used to finance long-term or short-term business needs and can be used for Business Expansion/Business Operations. |
| Working Capital Loans | They are used to finance short-term business needs and can be used for cash flow management, Business Operations, and to fulfil short-term liabilities. |
| Secured Business Loans | They are usually taken against the security of collateral and used for financing long or short-term business needs. They usually have lower interest rates than an unsecured business loan due to collateral security. |
| Loans against Property | Business Loans against Property are taken against the security of commercial, industrial, or residential property and may have a higher loan amount sanctioned based on the market value of the property and the LTV ratio. |
| Equipment Loans | Equipment Loans are usually taken to upgrade machinery or to buy new equipment. |
| Bill Discounting/Invoice Discounting | Bill Discounting is usually used to finance the working capital needs of a business. |
Business Loan EMI Calculator
Documents required for a Business Loan in Mumbai
The necessary documents required for a Business Loan in Mumbai may vary based upon the type of business loan. However, the following documents are usually sought by a Business loan provider in Mumbai:
| KYC Documents of the owner and the business: The foundation of your journey. For both you and your business, we require: | 1. Personal Identification: PAN Card, Aadhaar Card, Voter’s ID Card, Driving License, etc. 2. Address Proof: Passport, Utility Bills, Lease Agreement, Trade License, etc. 3. Business Legitimacy: GST Registration, UDYAM Registration, Business PAN Card, Licenses issued by Municipalities, Registration certificates from relevant authorities, etc.. |
| Financials: Your economic blueprint, essential for a tailored loan strategy, includes: | 1. Narratives: ITR filings for the last 2 years, complete with Income Computation. 2. Business Health Check: Audited Balance Sheets and Profit & Loss Statements for the last 3 years, certified by a CA. Bank Statements from the last 2 years, revealing your financial journey. 3. License issued by Municipalities, GST Registration Certificate, Registration certificates by appropriate authorities, etc |
| Proof of Ownership or Collateral Documents (In case of secured loans) | 1. Proof of ownership or collateral documents, including property deeds, sale agreements, possession letters, and asset valuation (if applicable). |
Eligibility Criteria for a Business Loan in Mumbai
To avail a Business Loan in Mumbai, the borrower must fulfil the following eligibility criteria:
| Particulars | Requirement |
| Citizenship | The business owner must hold an Indian citizenship. |
| Age | The borrower must be at least 21 years old, and the maximum age must not be more than 65 years old at the time of loan maturity. |
| Business Vintage | The business must be at least 2 years old. |
| Credit Score | The promoter and the business must have a good credit score of over 650. The credit score of co-applicants is also checked wherever applicable. The credit score has a crucial role to play in determining the creditworthiness of the borrower. It determines the limit of the lender’s credit exposure based on the repayment history of the business. |
Interest rates and Charges on a Business Loan in Mumbai
The Business Loan interest rate can vary from lender to lender in Mumbai. However, here is an overview of the Business Loan interest rates in Mumbai:
| Business Loan Type | Interest Rate |
| Unsecured Loans | Starting from 16% p.a. |
| Working Capital Loans | Starting from 9% p.a. |
| Secured Business Loans | Starting from 8.85% p.a. |
| Loans against Property | Starting from 8.85% p.a. |
| Equipment Loans | Starting from 9% p.a. |
| Bill Discounting/Invoice Discounting | As per the financial institution |
Interest rates by various banks and NBFCs for Loan Against Property in Mumbai
| Banks / NBFCs | Interest Rates | Tenure | Processing Fees |
| HDFC Bank | Starting 8.80% | Maximum 15 years | 0.50% |
| ICICI Bank | Starting 9% | Maximum 15 years | 0.75% |
| Kotak Mahindra Bank | Starting 9% | Maximum 15 years | 0.75% |
| Axis Bank | Starting 9% | Maximum 15 years | 0.50% |
| IDFC Bank | Starting 9% | Maximum 20 years | 1% |
| Standard Chartered Bank | Starting 9% | Maximum 15 years | 0.50% |
| Deutsche Bank | Starting 9% | Maximum 15 years | 0.75% |
| Bajaj Finance | Starting 9.5% | Maximum 15 years | 1% |
| L&T Finance | Starting 9.5% | Maximum 15 years | 1% |
| India Bulls | Starting 10% | Maximum 15 years | 1% |
| RBL Bank | Starting 9% | Maximum 15 years | 1% |
| Hero Fincorp | Starting 10.50% | Maximum 15 years | 1% |
| HDB Finance | Starting 9.5% | Maximum 15 years | 1% |
| HSBC | Starting 9% | Maximum 15 years | 0.50% |
| Shinhan Bank | Starting 9% | Maximum 15 years | 0.50% |
| AU Small Finance Bank | Starting 9.25% | Maximum 15 years | 1% |
Read: loan against property in Mumbai
How to apply for a Business Loan in Mumbai through OneNDF
The process of applying for a Business Loan in Mumbai may differ based on the type of business loan availed.
Many banks at times provide collateral-free loans, MSME loans and small business loans specifically catering to the requirements of MSMEs.
However, given the lack of knowledge about business loans offered and the opaqueness in the loan application process, small businesses are often unable to get any financial assistance and end up running from pillar to post to get a business loan in Mumbai.
To apply for a business loan on OneNDF, please follow these streamlined steps:
1. Sign-Up Process:
- – Click on the “Sign-up” button to begin your journey with OneNDF or Click here
- – Enter your mobile number to receive a One-Time Password (OTP) for verification.
2. Business Authentication:
- After signing up, provide your PAN number. This step is crucial for verifying your business identity.
3. Registration and Profile Completion:
- Complete the registration process to build your profile on the platform. A comprehensive profile increases the success rate from initial login to loan sanction.
4. Credit Score Check:
- We will conduct a soft-pull of your credit score. This process does not generate an inquiry, thus not affecting your credit score.
5. Financial Information:
- You can upload the Downloaded ITR for your business (detailed PDF) or you can authenticate the credentials for the ITR portal and we will fetch this information and give you a snapshot . This helps in assessing your business’s financial stability.
6. GST Returns:
- Authenticate the GST credentials. Loans are provided to MSME clients, including both self-employed professionals and non-professional business owners based on their GST returns. ((This information can serve as a quick snapshot to help you understand your business better. It allows you to identify your top suppliers and buyers and monitor your returns effortlessly with just a click, eliminating the need to rely on your accountant for this data.))
7. Banking:-
- Provide banking details for the last 12 months. This helps in analysing your banking turnover and financial transactions.
Upon completing these steps, we will tailor loan offers from lenders that best fit your requirements. Additionally, a comprehensive profile of your business will be created. This profile not only helps you understand your current business health but also provides recommendations on improving key financial ratios to maintain a healthy bottom line.
Frequently Asked Questions (FAQs)
Is business loan in Mumbai risky?
No, a business loan in Mumbai is not risky. However, it is advised to seek help from reputed and experienced platforms such as OneNDF.
Can I get a business loan in Mumbai with a low credit score?
Having a decent credit score can increase your chances of getting approved, but there are still some lenders who might be willing to give loans to businesses with lower credit scores. However, keep in mind that this could lead to higher interest rates or more rigid conditions.
How can I apply for a business loan in Mumbai?
You can apply for a business loan in Mumbai through banks, financial institutions, or even online lending platforms. The whole process usually just involves sending over some important documents, like your business plans, financial statements, and KYC documents.
