Banks and non-bank financial institutions (NBFCs) provide business loans to address the financial needs of self-employed consumers. Individuals, MSMEs, business owners, entrepreneurs, and a variety of other entities can use it.

Secured loans and unsecured loans are the two most common types of business loans. Secured loans are those that require a borrower to deposit collateral or security with the lender in order to obtain a loan. Unsecured loans, on the other hand, do not need the submission of any collateral or security to the bank, NBFC, or any other lender.

Most financial institutions provide unsecured business loans, such as term loans, working capital loans, government-backed loans, overdrafts, and so on. Letters of credit, bill/invoice discounting, equipment finance, machinery loans, point-of-sale loans, and other secured loans are available from leading banks.

The smallest loan amount available is Rs. 30,000, which can be obtained from Small Finance Banks (SFBs), Regional Rural Banks (RRBs), or Micro Finance Institutions (MFIs). Leading banks and NBFCs offer collateral-free business loans of up to Rs 1 crore to borrowers. Small business loans with low interest rates are also available from top banks for MSMEs and startups.