Introduction to Business Loan Myths
In 2025, misconceptions about business loans can deter entrepreneurs from seeking financing. Loanpao clarifies these myths to help you make informed decisions. Apply now to explore business loan options tailored to your needs.
Common Business Loan Myths
Myth 1: Only Large Businesses Qualify
Many believe only established corporations can secure business loans. In reality, small businesses and startups can access loans through MSME schemes and fintech platforms like Loanpao, with loan amounts starting at ₹1 lakh.
Myth 2: High Credit Scores Are Mandatory
While a good credit score helps, lenders in 2025 offer loans to businesses with scores as low as 650, especially with collateral or guarantors.
Myth 3: Loans Take Months to Process
Fintech advancements have reduced processing times. Loanpao disburses business loans within 7–10 days post-verification.
Myth 4: Collateral Is Always Required
Unsecured business loans up to ₹50 lakh are available for eligible businesses, depending on revenue and creditworthiness.
Myth 5: Interest Rates Are Always High
Rates start at 10% p.a. for business loans in 2025, with competitive options for strong applicants. Government schemes further reduce costs.
Comparison of Business Loan Features
Here’s how business loans vary across lenders in 2025:
| Lender | Interest Rate | Loan Amount | Tenure |
|---|---|---|---|
| SBI | 10.5%–13.0% | Up to ₹100 crore | Up to 7 years |
| HDFC Bank | 11.0%–15.0% | Up to ₹50 crore | Up to 5 years |
| ICICI Bank | 11.5%–14.5% | Up to ₹40 crore | Up to 6 years |
| Loanpao Partners | 10.0%–12.5% | Up to ₹75 crore | Up to 7 years |
Note: Rates and terms depend on eligibility. Check eligibility criteria for personalized offers.
Eligibility Criteria for Business Loans
Key requirements include:
- Business Age: Minimum 2 years of operation.
- Turnover: Annual revenue of ₹10 lakh or more.
- Credit Score: Preferably 650+ for business or owner.
- Documents: GST returns, ITR, and business registration.
- Collateral: Optional for loans above ₹50 lakh.
Documents Required
Loanpao simplifies documentation:
- Identity Proof: PAN, Aadhaar of business owner.
- Business Proof: GST certificate, shop license.
- Financials: 2 years of ITR, bank statements.
- Address Proof: Utility bill or lease agreement.
Benefits of Loanpao’s Business Loans
Choosing Loanpao offers:
- Competitive rates from 10% p.a.
- Fast disbursal within 7–10 days.
- Flexible tenures up to 7 years.
- Unsecured loans up to ₹50 lakh.
- Expert guidance for applications.