Business loan eligibility – how banks actually decide
Banks size a business loan from three things: how much cash the business earns to repay, what security is offered, and the track record of the promoters. Funding Desk checks your figures against the norms of each lender and shows the amount, rate and EMI you are likely to get.
Check your own eligibility in 2 minutesFree · no credit-score enquiry · lender-wise amount, rate and EMI
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| Lender | Type | Rate range | Up to | Min score |
|---|---|---|---|---|
| Bank of Baroda Baroda MSME Term Loan / Cash Credit | Public Sector Bank | 8.15% – 10.75% | ₹50 Cr | 700 |
| Canara Bank Canara MSME Term Loan / Cash Credit | Public Sector Bank | 8.20% – 10.60% | ₹50 Cr | 700 |
| State Bank of India SME Term Loan / Cash Credit | Public Sector Bank | 8.25% – 10.50% | ₹50 Cr | 700 |
| Punjab National Bank PNB MSME Term Loan / Cash Credit | Public Sector Bank | 8.25% – 10.75% | ₹50 Cr | 700 |
| Union Bank of India Union MSME Term Loan / Cash Credit | Public Sector Bank | 8.25% – 10.75% | ₹50 Cr | 700 |
| HDFC Bank Secured Business Loan / Working Capital | Private Bank | 8.75% – 11.50% | ₹50 Cr | 720 |
| ICICI Bank MSME Secured Term Loan / Cash Credit | Private Bank | 8.75% – 11.50% | ₹50 Cr | 720 |
| SIDBI Direct Term Loan / Working Capital (MSME) | Development FI | 8.75% – 11.50% | ₹25 Cr | 700 |
| Axis Bank MSME Term Loan / Cash Credit | Private Bank | 9.00% – 11.50% | ₹50 Cr | 720 |
| Kotak Mahindra Bank Secured Business Loan / Working Capital | Private Bank | 9.00% – 12.00% | ₹25 Cr | 720 |
As on 26 Oct 2026, RBI repo rate 5.50%. Indicative ranges; your rate depends on your profile.
See today’s rates from every lender →
Who is eligible
- Business vintage of 2–3 years for unsecured loans; new units can use term loans and government schemes
- Profit in the last two years; losses need a strong explanation or security
- Promoter credit score of 700+ for most banks; NBFCs accept 650–685
- Regular GST returns and ITR; mismatch between GST turnover, bank credits and ITR is a common reason for rejection
How much you can get
- DSCR: cash profit (profit after tax + depreciation + interest) divided by yearly EMIs – 1.25x minimum, 1.5x comfortable
- Unsecured loans: usually up to 25–30% of yearly turnover, ₹50 lakh to ₹1 crore at most lenders
- Secured loans: 50–75% of property value, or project cost less your margin
- Existing EMIs reduce the new amount rupee for rupee
Documents
- KYC of business and promoters
- ITR with computation and audited financials for 2–3 years
- 12 months of bank statements and GST returns
- Sanction letters of existing loans
Tips from our credit panel
- Apply to 2–3 lenders in the same fortnight; many enquiries spread over months lower the credit score
- A public sector bank is usually cheapest; use a private bank offer to negotiate
- Ask for the rate as repo/EBLR plus a spread in the sanction letter
Common questions
What DSCR do banks need?
Most banks want a DSCR of at least 1.25 on the new loan, and are comfortable at 1.5 or more.
How much unsecured business loan can I get?
Typically up to 25–30% of yearly turnover, limited by repayment capacity and the lender’s maximum, which is ₹50 lakh to ₹1 crore at most lenders.
Does this check affect my credit score?
No. Funding Desk works on the figures you enter and does not pull your credit report.