SBI Business Loan: interest rates, features, advantages, charges, faq
SBI Business Loan: To meet its financial requirements every business at some point of time has to look for external sources. To offer new product lines and services or enter new geographical areas which include managing daily operations, purchase assets like land, machinery or even technological investments, expand business these are some of the common reasons behind seeking external funding. There are primarily two ways of raising such funds. The first way is to borrow money either by issuing bonds, debentures or take a loan from a financial institution. The second way is to raise money from public by offering the company’s stock through an IPO. Owners who prefer to retain the equity and hence the voting rights and management decisions, prefer to go via the debt route i.e. loans/bonds, etc. as there is no dilution of ownership in that.
State Bank of India (SBI) is the largest player in the market and one of the premier public sector banks in the country which offers diverse kinds of business loans as compared to many financial institutions or banks in India. State Bank Of India understand that the financial requirements of an enterprise or business varies significantly depending upon its domain or functional area. Given below are some of the types of business loans that is offered by SBI.
SBI Business Loan Features
|Loan for Self Employed||Features|
|Processing Fee||From 2% to 3%|
|Tenure||From 12 months to 48 months|
|Lowest EMI per lakh||Rs. 2,594|
|Loan Amount||Min Rs. 5 Lakh and Max Rs. 100 Cr|
|Part Prepayment, Charges||3%|
|Early Foreclosure, Charges||Allowed after 6 EMI’s, 3%|
SBI Advantage on Business Loans:
- Lowest interest rates and also SBI charges interest on a daily reducing balance!
- No hidden costs or administrative charges.
- Low processing charges; only 2%-3% of loan amount
- No security require which means minimal documentation
- No prepayment penalties. Reduce your interest burden and optimally utilize your surplus funds by prepaying the loan (1% of the loan amount will be charged if you repay the loan before 6 months)
- Repayment period of up to 48 months.
SBI Business Loan Eligibility Criteria
Bank have a detailed criteria to determine the eligibility of a borrower for business loans. Some of the key criteria are:
|Age:||21 to 65 years|
|Minimum Turnover||Rs. 20 Lakh|
|Business Existence (in months)||36 months|
|ITR (months)||24 months|
|Loan Amount||Rs. 5 Lakh to Rs. 100 Cr|
|Loan Tenure||48 months|
|Owned House or Place of Work||Not Required|
|CIBIL Score||750 and above|
In addition to interest rates, business loan also carry some other charges which include:
- Foreclosure Charges- These charges are to be paid in case you want to repay your entire loan amount before the end of tenure period. SBI allows prepayment of loan after paying 6 EMI’s with prepayment charges – 3%
- Processing Fee- SBI asks for a processing fee of From 2% to 3% with applicable service tax
- Address proof of individual: Voter’s ID Card, Aadhar card Bank statement, registry copy, rent agreement.
- Identity proof of individual: Driving License, PAN Card, Aadhaar Card, passport, Voter’s ID Card.
- Business existence proof: PAN, Goods and Services tax GST registration, copy of partnership deed, certificate of practice, registration certificate issued by RBI, SEBI, trade license.
- Copy of Income Tax PAN for 24 months
- Bank statement of last 6 months
FAQs on Business Loan SBI
What is the interest charged on SBI Bank business loan?
Interest rates on Business loan in SBI are very attractive starting from 11.20% to 16.30%. Bank offer various offer for self employed professionals to get loan at very low rate of interest.
What is the minimum and maximum tenure of business loan in SBI Bank?
These loans are shorter tenure loans. You can repay your loan in a flexible period of minimum 12 months to maximum 48 months.
How much business loan amount I can borrow from SBI Bank?
SBI offers you loan if you need a minimum amount of Rs. 5 Lakh to a maximum amount of 100 Cr.
Why to take business loan from SBI Bank ?
Bank offers loan at 11.20% rate with the lowest EMI of Rs. 2,594 per lakh. If you are paying EMI more than this then you can opt for balance transfer and relocate your loan to SBI.
What is the processing fee charged by SBI on business loan?
SBI charges a processing fee of From 2% to 3% with applicable tax.
Is age an eligibility factor to get loan for business from SBI ?
Yes, age is an important eligibility factor to get loan as you should be at least 21 years old at loan approval time and 65 years old at loan maturity time.