Urban Money

Canara Bank Business Loan

Canara Bank
4.5

Canara Bank was founded by Shri. Late Ammembal Subbarao Pai in July 1906. The bank was founded in Mangalore in Karnataka and has evolved into one of the foremost Indian banking institutions today. Post nationalization in 1969, Canara Bank has diversified rapidly into several business segments.

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Urban Money

Business Loan Banks

Interest Rate

Processing Fee

Loan Amount/Tenure

Canara Bank Bussiness Loan Interest Rate

10.5% - 18%

Up to 1%

₹50K - ₹10Cr

Tenure(1 - 7 Years)

Details

Features & Benefits of Canara Bank Business Loan

Canara bank is one of the leading organisations  in the banking sector of India. Established in 1906, the main headquarters of the bank is located in Bangalore. Further, since its inception, the bank has grown and expanded to over 3500 branches in several locations across India.

Canara bank has a rich history of continuous progress and profit making ability, which has allowed it to establish itself as one of the premiere financial service providers in the country. Leveraging deep industry experience and advanced technology, the organisation has been able to provide world-class services to their customers. They also provide cleverly designed business loans for business startups, SME loans, self-employed businesses, software companies, the IT sector, traders, manufacturers, machinery, equipment, and others.

The Canara Bank business loan provides a fund to facilitate end-to-end business operations. This loan can be availed to meet the business expansion or working capital requirements. Given below are some of the features and benefits of a Canara Bank business loan:

  • With Canara bank business loans you can have an easy and hassle-free loan application experience.
  • If you are an existing customer you won't require any documentation. However, as a new business loan applicant, you can apply with minimal documentation requirements.
  • You can apply for a loan for any purpose like a capital requirement or expenditure.
  • You can avail a business loan of up to Rs 10 crore, however, this is subject to the nature of the business.
  • Extended loan tenure of up to 7 years.
  • Canara bank will charge a very low processing fee compared to different lenders. The bank charges up to 1% of the loan amount as a processing fee.

Canara Bank Business Loan Eligibility Criteria

To avail a business loan from Canara Bank, you will have to fulfill some eligibility conditions. Given below are some of the eligibility criterion for a business loan:

  • All the self-employed individuals, Proprietors, Private Ltd. Co. and Partnership firms involved in the business of manufacturing, trading or services. 
  • The business should be functional for a minimum of three consecutive years.
  • The minimum age of the business loan applicant must be 21 years.
  • The maximum age at the time of application and loan tenure must not be more than 65 years.

Canara Bank Business Loan Fees and Charges

The table given below depicts the various  Canara bank business loan fees and charges:

Loan Amount Interest Rate on Short Term Loan per annum Interest Rate on Term Loan per annum
Micro Organisations Small & Medium Organisations Micro Organisations Small & Medium Organisations
Upto 50,000 Base Rate + 0.50% Base Rate + 1% Base Rate +1% Base Rate + 1.50%
More than 50,000 Up to 2,00,000 Base Rate + 2.50% Base Rate + 3% Base Rate + 2.50% Base Rate + 2% – Base Rate + 3%
More than 2,00,000 Up to 2,00,00,000 Rate of interest depends on scoring norms and parameters Rate of interest depends on scoring norms and parameters
Base Rate Of 1.50% to Base Rate + 4.50% Base Rate Of 2.25% to Base Rate + 5% Base Rate + 1.75% to Base Rate + 4.75% Base Rate + 2.25% to Base Rate + 5.75%
More than 2,00,00,000 Up to 10,00,00,000 Rate of interest based depends on Internal Credit Risk Rating with Base Rate Of 3.25% to 5.75% and applicable Term Premium
More than 10,00,00,000 Rate of interest depends on External Credit Risk Rating with Base Rate Of 2.25% to 5.75% along with applicable Term Premium

Canara Bank Business Loan Interest Rates

Here is the Canara Bank Business Loan for MSMEs & Start-ups in a tabular format:

Interest rate As per the business requirements
Age Criteria From 21 years to Maximum 50 years
Loan Amount From Rs. 10 lakh to Rs. 200 lakh
Nature of Loan The business loan can be a term loan, working capital & Non-fund based limit
Purpose You can obtain the business loan for working capital requirement & capital expenditure
Repayment Tenure Starts from 1 year to 7 years
Security 50% of loan amount by way of land/building/securities/bank deposits
Margin Minimum 20% as per term loan minimum and 25% as working capital

Types of Business Loans Offered by Canara Bank

Canara bank provides business loans in several categories such as Term Loans, Working Capital Loans, and Pradhan Mantri Mudra Yojana (PMMY).

Term Loan

A term business loan can be obtained from Canara Bank in both secured and unsecured types.This loan can be used for several business expansion purposes like meeting capital requirements, enhancing cash flow, buying land, buildings, equipment, machinery, and more.  Given below are some of the features of the term loan offered by Canara Bank:

  • Loan can be availed in the form of Rs, foreign currency, and Deferred Payment Guarantees.
  • Interest rate depends on loan tenure, nature of project, and structure of debt.
  • Both industrial and non-industrial applicants are eligible for this loan offer.

Documents Requirement

  • KYC: Aadhaar Card, Pan Card, Passport, Driving licence.
  • Partnership Organisation: Identity proof, PAN Card, Office Address Proof, Partnership Certification
  • ITR documents from the previous 3 years, or Income Statement

Working Capital Finance

A working capital loan can be availed by an organisation to acquire raw materials, semi-finished goods, or pay back sundry debtors. The working capital requirement of a business is determined via various methods like Cash Budget System, Net Owned Funds System, and Maximum Permissible Bank Finance (MPBF) System. Given below are some of the features of this loan product:

  • Interest rate depends on the loan tenure, loan amount, and the risk rating of the business.
  • The securities of the working capital loan will be according to the general lending norms of the bank.

Documents Required

  • KYC: A copy of PAN Card, Passport, Aadhaar Card, Driving licence, etc.
  • Partnership Firm: Identity proof of the organisation’s pan card, office address proof, and partnership Certificate of the Partnership Firm.
  • Income documents, GST return, and CA certificate.
  • Three years of ITR documents are required by every organisation. 

Mudra Loan Under Pradhan Mantri Mudra Yojana (PMMY)

The Mudra Yojana is designed for assisting small and medium MSMEs. This loan will help such companies to grow, trade, produce, manufacture, etc. The collateral-free amount is Rs. 50,000. However, the maximum amount offered is up to Rs. 10 lakh. The repayment tenure for such loan yojana is 5 years. Further, the rate of interest depends upon the amount of loan that falls under MSME. Canara bank charges a processing fee depending on the disbursed loan amount.

Factors Affecting Canara Bank Business Loan Interest Rates

Usually, banks and NBFC consider a number of different factors before determining the appropriate interest rate for your loan. Given below are some of the prominent factors that affect the business loan interest rate provided by Canara bank.

1. Loan Amount

The loan amount that you have applied for is one of the major factors affecting your loan interest rates. If you apply for a higher loan amount, you will be granted lower rates of interest, and vice versa. In other words, the loan amount and interest rate are inversely proportional to each other.

2. Type of Business

The type of business also affects the business loan interest rates. The type of business you are involved in should represent a positive outlook and should not be blacklisted in any sense. While determining the appropriate interest rates, the lenders take a look at the previous nature of the business to determine the risk aspect of your business. If your business is determined to be less risky, you will be granted favorable interest rates.

3. Time in Business

The total experience of the business is one of the prime aspects affecting the loan interest rates. This is because a business involved in a particular industry for an extended duration is generally viewed as being more stable. Lenders usually grant higher interest rates to start ups or new businesses, due to the risk of default or non-payment of loan amount.

4. Revenue

If your business has higher turnover, you may be granted a business loan at a really low-interest rates. Banks and lenders usually check the quarterly, monthly, and yearly profit statements to accurately determine the financial standing of the business. However, if you have a low turnover, you will be granted a higher interest rate.

5. CIBIL Score

The CIBIL score is the prime indicator of your credit history and repayment ability. This helps the lender to determine how much of a credit risk you are. If you have a poor repayment history, you might be granted a higher interest rate, or in extreme cases, it may even lead to rejection of application. To get a loan from Canara bank you must have a credit score of 750 or more. The higher the credit, there are higher the chances of getting a business loan at a lower interest rate.

Documents Required for Canara Bank Business Loan

The documents required for Canara bank business loan are as follows:

  • A copy of applicant’s PAN card.
  • Driving Licence, PAN card, Passport, or Voter ID as identity proof.
  • Water bill, gas bill, telephone bill, or rental agreement as address proof.
  • Six-month bank statement.
  • Proof of continuation of business for 2 years.
  • ITR/Sales Tax certificate.
  • Latest ITR with proper computation of income, balance sheet, profit and loss of last two years. All these must be certified by a certified CA.
  • Sole Proprietorship Declaration/Certified copy of Partnership Deed/Memorandum of Articles of Association.

How Does the EMI Calculation Work for Canara Bank Business Loans?

You can always use the Urban Money online calculator and calculate your business loan EMI. All you have to do is enter the loan amount, loan tenure, and interest rate, and the calculator will determine the best loan offers for you The EMI calculation for your business loan involves a lot of variables and complex calculations that simply take too much time and effort. However, if you wish to understand the EMI calculation, you can always refer to the below given formula.

Given below is the formula to calculate your loan EMI amount:

EMI = P × r × (1 + r)n/((1 + r)n - 1) 

Here,

  • P stands for a principal loan amount
  • n stands for tenure for repayment of the loan
  • r stands for current rate of interest on your loan amount

How Canara Bank Compares with Other Lenders?

Here is a table representing the comparison between Canara bank and other Business loan lenders on the basis of annual rate of interest.

Other Bank/NBFCs Rate of Interest (p.a.)
Canara Bank 10.50% to 18%
IIFL Finance 12.75% - 32% p.a.
HDFC Bank 11.90% to 21.35%
Flexi Loans 1% per month onwards
Zip Loan 1% to 1.5% per month (Flat ROI)
Axis Bank 14.25% to 18.50%
IDFC First Bank 14.50% onwards
Kotak Mahindra Bank 16% to 19.99%
Fullerton Finance 17% to 21%
Bajaj Finserv 17% p.a. onwards
RBL Bank 17.50% to 25%
ICICI Bank 18% onwards
Indifi Finance 1.5% per month onwards
Lendingkart Finance 1.5% to 2% per month
Tata Capital Finance 19% p.a. onwards
NeoGrowth Finance 19% to 24%
Hero FinCorp Up to 26%

Canara Bank Business Loan Customer Care Number

In case you have any doubts or queries regarding Canara Bank business loan, you can get in touch with customer service in the below given ways:

  • Phone: 1800-425-0018, 9180-22240903
  • Email Address: hosbu@canarabank.com

FAQs

From refinancing to reducing your interest, we have the answers right here.

What is the interest rate of a business loan in Canara bank?

The interest rate offered for a business loan in Canara bank ranges between10.50% to 18%.

What is the maximum and minimum business loan amount I can get from Canara bank?

You can get a maximum loan amount of Rs 10 crore, while the minimum loan amount is Rs. 50,000.

How to check business loan Status in Canara bank?

Open the Canara bank website, click on corporate banking, then loan and advance banking, and then select loan application status. Enter the details asked and you will know the status of your business loan application. This is possible when you already have an account in Canara bank. If you do not have any account you can contact the customer care executive.

Canara bank Checks for CIBIL Score for a business loan?

The best credit score is 750 or more. However, Canara bank also accepts a minimum CIBIL score of 650.

What is the minimum turnover requirement for a Business Loan?

The business’s minimal annual income must be a minimum of Rs. 1.5 lakh. The applicant must be at least 21 years at the time of applying for the loan.

What are the documents required in Canara bank for a business loan?

The documents required in Canara bank are identity proof, address proof of company incorporation, a document of the deed signed, ITR, and many more.

How to apply for a business loan in Canara bank online?

You can simply apply for a business loan in Canara bank online by visiting the official website of Canara bank.

What is loan foreclosure?

Loan foreclosure is a complete repayment of the remaining loan amount in a single payment and not in multiple EMIs. You can use your surplus funds can be used to give a complete foreclosure to your loan.

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