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Business Term Loan

Invest today,repay steadily — business term loans.

A business term loan offers structured, long-term capital with predictable EMIs when your company needs to expand or invest in assets rather than just manage daily cash flow.

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Why choose us

Why Choose an Online Business Term Loan in 2026?

A term loan allows you to expand without interfering with your regular working cash, whether you operate a manufacturing facility in Pune, a retail chain in Mumbai, or a services company in Bengaluru.

What is a Business Term Loan?

A business term loan has a set repayment schedule and disburses a lump of cash for a particular purpose. It is intended for capital expenditures with tenures that correspond to the asset's useful life, in contrast to working capital facilities. The definition of a business loan in this context is simple: you borrow a predetermined amount, decide on a predetermined duration, and pay it back in equal installments (EMIs) until the loan is entirely closed. Because of this, a term loan for business differs significantly from a working capital loan or a line of credit loan, where money is spent and paid back over time. When you know exactly what you need the money for and how long you'll need to return it, a term loan is the best option because it's a one-time payment.

Key Benefits of Business Term Loan

A business term loan provides financial assistance to businesses needing structured long-term capital without tying up your working capital reserves. Whether you are financing a new production line, setting up a second office or funding a construction project for your growing business, a business term loan is the way to go.

  • Fixed EMIs: Your cash flow estimates won't be surprised by a predictable monthly outlay, making financial planning simpler.
  • Long tenure: To avoid burdening your company before the investment begins to pay off, repay the loan over a period of one to seven years in order to match asset returns.
  • Lower rates: Typically, term loans come with lower rates compared to overdraft facilities or unsecured credit lines because the tenure and purpose are clearly defined in advance.
  • Capex Focus: Designed for machinery, expansion & upgrades, funding that builds your business capital, not bridges short-term gaps
  • Tax benefits: Interest on business term loans may be tax deductible, helping to reduce the effective cost of borrowing
  • MSME-friendly: Offered as a SME business loan option, with certain government-backed schemes providing collateral-free limits for qualifying small businesses
  • Improves business credit: Paying EMIs on time helps your commercial credit score, so it's easier to get business financing in the future
  • Preserves working capital: Keeps your day-to-day operational cash flow separate from long-term investment funding, so your expansion plans won't affect daily operations.

Business Term Loan interest rates

Business term loan rates are typically lower than revolving credit:

BanksInterest rateProcessing fees.
Aditya Birla Capital14%–21%Up to 3% of loan amount + GST
Axis Bank
HDFC Bank10.50%–15.75%Up to 2% + GST (NIL for MSMEs on loans up to Rs. 5L with Udyam Registration)
Icici bank10.25%–19%Up to 2%
IDFC First BankStarts from 12.99%Up to 3.5%
Tata Capital12%–30%Up to 3%
L&T FinanceStarts from 15%Up to 3%
Poonawalla FincorpStarts from 15%Up to 3%
Piramal Financestarts at 16.49%Up to 5%
InCred'20%–36%Up to 5%
SMFG India Credit's13.00%–33.00%Up to 2.75%
Finnable'

NOTE: Interest rates are indicative and subject to change. Contact Bikesh Finserv for current rates.

Unlike most intermediaries, Bikesh Finserv offers Up to 100% cashback on processing fees which saves you thousands upfront.

Business Term Loan eligibility

Term loan lenders assess project viability and repayment from business cash flows:

ParametersSalaried employeesSelf employed
Age25–65 years25–65 years
Business vintage2+ years3+ years
Annual turnoverRs. 10 lakh+Rs. 15 lakh+
CIBIL / commercial score700+ (recommended)680+ (recommended)
Loan amountRs. 1 Lakh – 50 lakhRs. 1 Lakh – 50 lakh

Factors That Improve Your Loan Eligibility

  • Project purpose: A clear capex plan with expected ROI improves approval; lenders want to know exactly how the funds will be used, whether for machinery, expansion or a construction project
  • Debt service coverage: Business income should easily cover EMIs and the debt service coverage ratio should ideally be over 1.2-1.3x
  • Business vintage: 3+ years preferred for larger-term loans, but newer businesses still qualify for small-ticket sizes with strong financials
  • Asset quote: Machinery or project quotes underpin the loan amount and give the lender confidence that the funds will be used.
  • Credit history: A clean repayment history on existing business credit lines demonstrates reliability and often leads to better interest rates
  • Turnover Trend: Year-on-year consistency or increase in turnover backed by GST returns enhances your overall business loan eligibility

Business Term Loan for Proprietors & MSMEs

When business income and paperwork are in order, directors, partners, and proprietors may apply. Small and medium-sized businesses in the manufacturing, trading, and service sectors can easily obtain business term loans as an SME business loan option. Government-backed programs like CGTMSE provide collateral-free limits for qualified MSMEs, making this a feasible path to MSME financing without pledging assets.

Application Tips

  • Updated ITR: Submit your most recent business tax returns, preferably those from the previous two years.
  • Statements from banks: To show cash flow stability, present 12 months' worth of major business account statements.
  • Turnover proof: The loan amount you are requesting is supported by GST returns or audited financial statements.
  • Examine different lenders: You can obtain the most economical financial support for your company by evaluating several offers because NBFCs and banks have varied requirements, processing times, and rates.
  • Select the appropriate structure: Depending on your asset situation and urgency, choose between an unsecured business loan (faster, collateral-free, usually smaller sums) and a secured business loan (lower rates, requires collateral).

Business Term Loan with Moderate Credit

Through NBFCs or secured alternatives, businesses with ordinary credit may still be eligible. A lower credit score typically implies changing your strategy, but it doesn't immediately rule you out.

What Facilitates Approval

  • Strong cash flow: Healthy monthly credits in your business account can offset a moderate credit score
  • Lower loan amount: Requesting an amount aligned with your turnover and existing EMI obligations improves your chances
  • Co-applicant: Adding a partner or guarantor with stronger credit history can strengthen the application
  • Existing lender relationship: Check renewal or top-up offers from your current bank; existing relationships often come with more flexible underwriting
  • Loan collateral: Offering property, machinery, or fixed deposits as collateral can offset credit concerns and unlock better terms even with a moderate score

Before You Apply

  1. 1.Check your commercial credit report and CIBIL for problems; correcting them early on can significantly increase your chances of being approved.
  2. 2.Before applying, pay off any outstanding balances on your personal and company credit accounts.
  3. 3.To demonstrate sound credit management, keep credit utilization on cards and overdrafts below 40%.
  4. 4.Steer clear of making several loan inquiries in a short amount of time since this can damage your credit score.
  5. 5.Keep your business account balance at a healthy average each month, as lenders regularly monitor this.
  6. 6.PAN, Aadhaar, business registration evidence, bank statements, ITRs, and GST returns are among the usual business loan paperwork that must be prepared. Having these organized greatly speeds up processing.

Documents for Business Term Loan

Documents for business term loan including project and asset proof.

Standard Requirements

  • Aadhaar Card and PAN Card of proprietor/partners/directors
  • Business registration proof (GST, Udyam, Shop Act, etc.)
  • Last 12 months' bank statements
  • Last 2 years' ITR with computation and balance sheet
  • GST returns (GSTR-3B) for the last 6–12 months
  • Quotation or invoice for machinery / project
  • Project report (for loans above Rs. 25 lakh)

How Does a Business Term Loan Work?

Following approval, the lender deposits the authorized sum straight into your business account or, in certain situations, straight into a vendor (for the purchase of machinery or equipment). From there:

  1. 1.The loan tenure is fixed at the start, anywhere from 1 to 7 years
  2. 2.EMI repayment begins the following month, combining principal and interest
  3. 3.The interest rate is usually fixed or linked to a benchmark rate, depending on the lender
  4. 4.No further access to funds once disbursed; unlike a line of credit or working capital loan, this is a single disbursement product
  5. 5.This structure makes term loans ideal for capital expenditure, funding that goes into long-term assets rather than short-term operational needs.

Simple process

How it works?

From eligibility check to term loan disbursal — a seamless digital journey.

Step 01

Check Eligibility

Fill in your basic details and see your loan offer in seconds.

Step 02

Choose Loan Offer

Pick the amount and tenure that perfectly fits your needs.

Step 03

Get Funds

Approved! Your loan is disbursed directly to your account.

Term loan categories

Structured Business Investment

Types of business loans fall into two broad categories: funding for ongoing operations and funding for growth/creation of assets. A business term loan falls squarely into the latter category, and so do options like the products below. Depending on the loan size and lender policy, a business term loan can be secured or unsecured, offering companies choice regarding the assets they can pledge and the amount of capital they require.

PurposeTypical amountTypical tenure
Machinery & equipmentRs. 5 Lakh – 1 crore3–5 year tenure matching asset life
Office / warehouse setupRs. 10 Lakh – 50 lakh5–7 year repayment for property fit-outs
Business vehicleRs. 3 Lakh – 25 lakh3–5 year EMI aligned to usage
Expansion & renovationRs. 5 Lakh – 40 lakhFund new branch or capacity increase

Business Loan Types: Where Does a Term Loan Fit?

  • Working capital loans: for inventory, payroll, and day-to-day cash flow gaps
  • Line of credit loans: flexible, revolving credit you draw and repay as needed
  • Letter of credit: a bank guarantee used mainly in trade transactions
  • Secured business loans: backed by collateral, usually offering lower rates
  • Unsecured business loans: no collateral required, but typically higher rates and lower ticket sizes

Additional benefits:

  • Separate capex funding from working capital lines
  • Potentially lower interest than credit cards or informal loans
  • Build asset base while preserving working capital reserves

Got questions?

Frequently Asked Questions

A business term loan is a fixed-amount, fixed-tenure loan for capital expenditure — repaid in equal EMIs over 1 to 7 years.

Machinery, equipment, office setup, warehouse, vehicle for business, and expansion projects — not day-to-day working capital.

Tenures typically range from 12 months to 7 years depending on asset life and lender policy.

Higher amounts (Rs. 25 lakh+) often require collateral. CGTMSE and unsecured options exist for eligible MSMEs up to Rs. 2 crore.

Still have questions?

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