Urban Money

State Bank of India Business Loan

State Bank of India
4.5

Small firms and entrepreneurs can use business loans to aid them with their cash needs. There are numerous financial institutions across the nation that offer specialised business loans with low interest rates to meet your demands. Where SBI offers Business loans with flexible terms and rates starting at 11.2 % p.a. for amounts up to Rs. 50 crore.

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Business Loan Banks

Interest Rate

Processing Fee

Loan Amount/Tenure

State Bank of India Business Loan Interest Rate

Up to 11.2%

1% - 5%

₹10K - ₹50Cr

Tenure(1 - 5 Years)

Details

Features & Benefits of SBI Business loan

SBI Bank Business Loan offers several features that borrowers can employ to enjoy various benefits. These include the following:

  • Loan Amount: The SBI offers a minimum business loan of up to ₹ 10 lakhs and a maximum loan amount of ₹ 25 lakhs.
  • Target Group: All the business units involved in services and manufacturing, professional, self-employed individuals, retail and wholesale trade.
  • Flexible Loan Tenure: State Bank of India offers a flexible loan term ranging from 12 months to 60 months (reducing drawing power). It also includes a moratorium of a maximum of three months.
  • Guarantee Cover: The bank provides you with a guarantee cover for 5 years. Also, under Mudra Scheme, the advance cover has a maximum period of up to 60 months.
  • Assessment Process: You don't need to furnish any financial statements. Rather, the bank performs credit limit checks and need-based assessments. However, the applicant must have ten times the average monthly balance in the current account for the last year. The balance must be between ₹ 10 lakhs and ₹ 15 lakhs.

SBI Business Loan Overview

A simplified Small Business Loan (SSBL) is India's most popular type of SBI Business Loan. The SSBL aims to offer hassle-free finance for meeting fund requirements pertaining to the business activities of the unit. The loan offers an attractive interest rate starting at 8.05% onwards. The bank provides you with a business loan ranging from ₹ 10 lakhs to ₹ 25 lakhs.

Every business units involved in service activities, manufacturing, and wholesale/retail trade, along with professional and self-employed individuals, are eligible to apply for this loan.

Simplified Small Business Loan falls under SBI's SME Loans. Other business/SME loans offered by SBI are as follows:

  • Surya Shakti Solar Finance
  • Asset-Backed Loan
  • Loans under Contactless Lending Platform
  • Asset-Backed Loan - Commercial Real Estate
  • Fleet Finance
  • E Dealer Finance Scheme
  • E Vendor Finance Scheme
  • Export Packing Credit
  • Stand Up India
  • PM Mudra Yojana
  • Lease Rental Discounting
  • Finance to Food Processing Industry
  • SME Smart Score
  • Warehouse Receipt Finance, etc.

SBI offers a range of SME loans. You can visit the official website of the bank for further  information.

Eligibility Criteria and Factors Affecting SBI Business loan Eligibility

You must meet the following criteria to apply for the SBI Business Loan:
  • You must be a self-employed individual or professional.
  • The applicant must have an existing business operating in the same area or locality for at least 3 years.
  • If you own the premise, you must have the property papers.
  • In the case of a tenant, you must have a tenant agreement with the owner of the property.
  • If you are on a rented property, at least one year stay at the leased/rented premises is required and a minimum residual period of 3 years is necessary. 
  • You must hold a current account at any bank for at least two years. 
  • A monthly threshold balance of ₹ 10,000 and minimum credit of up to ₹ 50 lakhs for the last year is necessary.
  • The business unit must fall within a radius of 10 KM from the branch lending the loan.
  • The applicant borrowing the loan must fulfil the Go/No Go eligibility criteria. 
  • Good financial history and credit score are obligatory.

SBI Business Loan Fees and charges

With an SBI business loan comes certain fees and charges that are as follows:

  • Unified charges* of ₹ 7,500 plus applicable taxes
  • Margin 10% — which should be ensured via receivable statement and stocks
  •  Minimum collateral security of 40%, in the form of exclusive mortgage charge on Land & Building/cash equivalent such as charge or lien on Mutual Fund, Fixed Deposit, etc. 

*Unified charges consist of documentation, processing, commitment, inspection, and remittance charges (1 remittance per day free).

SBI Business Loan Interest Rates

The interest rate of Simplified Small Business Loans at SBI begins from 8.05% plus CRP (Credit Risk Premium) and BSP (Basis Points). 

You need to call the SBI executives to know how SBI business loan interest rates vary for different loan tenures and amounts.

Factors Affecting the SBI Business Loan Interest Rates

The interest rates on business loans usually depend on certain factors, which can directly or indirectly impact business loan interest rates. The factors are as follows:

  • Business Experience: The longer you have in the business, the better it will be for you. Usually, lenders prefer businessmen with higher business experience than the current ones. Moreover, such applicants tend to get lower interest rates on loans.
  • Credit History and Score: Credit score and history are the foremost factors that any lenders look for while lending you a loan. Therefore, you must have better credit history and a credit score of 750 or above. The higher the credit score, the better your credibility; hence, the bank will offer you a lower interest rate on a business loan. Your credit history shows that you have made payments on time.
  • Annual Business Turnover: NBFCs and Banks prefer applicants with greater business turnovers. The higher your business turnover, the lower your business loan interest rates could be. The turnover of a business signifies a lot about your loan repayment potential.
  • Avoid Getting on Defaulters List: If you don't pay your bills or dues on time, you automatically fall on the defaulter's list. Eventually, this creates a negative impression of yours on the lender's mind. It either results in loan rejection or approval at higher interest rates. Thus, try staying off the defaulter's list. Relationship with the Lender: If the lender asks you to furnish any required documents or information, ensure you do it on time. Such tasks will help to build a better relationship with the lender. Furthermore, it will help you fetch a better deal at SBI business loan interest rates.

Documents Required for SBI Business loan

To obtain an SBI Business Loan, you must submit the following documents:

  • A duly signed and completely filled SBI business loan application.
  • KYC documents, including Aadhaar Card, PAN Card, Voter ID card, Driving Licence, Utility Bills, etc.
  • Rent agreements or property papers associated with business location. 
  • Company incorporation documents, if required.
  • Last year's bank statement and details of filed ITR for the last three years.

Besides these, the bank may require additional documents that you must furnish, or your application may get rejected.

How does the EMI calculation Work for SBI Business Loans?

SBI business loan calculator renders a deep insight into the business loan EMIs. It helps you arrange your finances well. Moreover, you can use the calculator to instantly assess the monthly EMI payment of the loan.

You are simply required to enter the desired loan amount, interest rate, and loan tenure in the EMI calculator. The tool will display the result on the screen containing values of monthly EMIs, the interest rate payable, and the total principal amount. You can also use the Urban Money Business Loan calculator as a secondary reference.

If you wish to dip your hands into the calculation, you can use the following formula to determine the EMI on a business loan.

EMI = P x R x (1+R)N/ (1+R) N - 1

Where,

  • P = Loan Amount 
  • R = Rate of Interest
  • N = Loan Tenure

How does SBI Compare with Other Lenders?

Go through the table below to understand the comparison of SBI Bank's business loan interest rate with its competitors.

Bank/NBFCs Interest Rate
SBI Bank 6.25% onwards
Axis Bank 14.25% – 18.50% p.a.
HDFC Bank 10.00% – 22.50% p.a.
IDFC First Bank 14.50% onwards
ZipLoan 1% – 1.5% per month (Flat ROI)
FlexiLoans 1% per month onwards
Fullerton Finance 17% – 21%
Kotak Mahindra Bank 16% – 19.99%
RBL Bank 17.50% – 25% p.a.
Bajaj Finserv 17% p.a. onwards
Indifi Finance 1.5% per month onwards
ICICI Bank 17% onwards
Tata Capital Finance 19% p.a. onwards
Lendingkart Finance 1.5% – 2% per month
Hero FinCorp Up to 26% p.a.
NeoGrowth Finance 19% – 24% p.a.

Note: The interest rate on business loans keeps changing. The given rates are as of September 2022.

SBI Business Loan Customer Care Number

For any queries or detailed information about the SBI Business Loan, you can contact SBI customer care executives at the following numbers:

  • 24 x 7 helpline number — 1800 1234 (toll-free) 
  • Other toll-free numbers — 1800 11 2211, 1800 425 380, 1800 2100, or 080-26599990. 

You can access the aforementioned toll-free numbers from all mobile phones and landline numbers in the country.

FAQs

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

Does the SBI Provide business loans at the best rate?

SBI business loans are available at the best rate, especially when the applicant has a good credit score and credit history.

What is the interest rate of a business loan in the SBI?

The SBI business loan interest rate starts at 6.5% per annum.

What are the benefits SBI provides on a business loan?

SBI offers guarantee cover of up to 5 years and doesn’t require any financial statements for obtaining a business loan.

Does the SBI have a fixed rate of interest on a business loan?

No, the interest rates on a business loan may vary depending on the borrower’s profile, credit history, and other factors.

What are the documents required in SBI for a business loan?

KYC documents, bank statements, rent agreements, etc., are some documents required for obtaining a business loan with SBI.

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