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HDFC Bank is a leading private sector bank in India. It has a wide portfolio of financial products for personal and business lending, catering to diverse needs. Of its many products, business loan for MSMEs is one such offering that facilitates hassle-free borrowing. HDFC business loans are usually offered as term loans, with the option of online and offline business loan application. This article will explain the features of HDFC Bank business loans, eligibility criteria, documents required, and more.
Features of HDFC Bank business loan
- What is the business loan amount offered by HDFC bank?
HDFC Bank offers business loans of up to ₹50 lakh (₹75 lakh in select locations).
- Are collaterals required for availing business loans from HDFC?:
HDFC Bank business loans are offered without any collateral. The borrower neither needs to promise any collateral nor needs a guarantor.
- What is the loan repayment tenure for HDFC business loans?
A borrowed can pay the loan EMI amount over a period of 12 to 48 months.
- What is the HDFC bank business loan interest rate?
HDFC Bank offers the prevailing interest rate on a business loan. Currently the business loan interest rate ranges between 10% to 22.5% (Rack interest rate range).
- What are the other charges and fees applicable on HDFC business loans?
Processing charges: The bank charges up to 2% of processing charges. However, charges are relaxed on loan amounts of up to ₹5 lakh for micro and small businesses on submission of MSME Udyam registration certificate.
Premature closure charges: The bank charges for premature closure after completion of the cooling period. 4% of principal outstanding for up to 24 EMI repayment; 3% for 24-36 EMI repayments; 2% for over 36 EMI repayments (full payment).
Delayed payment: 18% p.a. + applicable government taxes
Note: Borrowers are requested to check with HDFC Bank directly to check prevailing interest rates and other eligibility criteria.
Benefits of a business loan from HDFC Bank
- No collateral: One of the most important benefits is that there is no collateral involved. Many times, borrowers fail to get a loan in the absence of any collateral. This hampers the business growth due to a lack of funds.
- No guarantor required: You also do not need to get any guarantor for getting a business loan.
- Quick disbursement: HDFC Bank is known to be prompt in loan disbursement processes.
Eligibility criteria for HDFC Bank business loan
- Any self-employed businessman, entrepreneur, proprietor, or private limited company, engaged in business activities such as manufacturing, trading, or service providing is eligible
- The minimum turnover of the business should be ₹40 lakh
- The applicant’s age should be between 21-65 years
- The applicant should be in the current business at least for 3 years and should have an overall experience of 5 years
- The business should be making profits at least for the last 2 years
- The business’ Minimal Annual Income (ITR) should be ₹1.5 lakhs per annum
Documents required for obtaining HDFC Bank business loan
The list of documents required by HDFC bank for a business loan is similar to the required documentation for an MSME loan. Here is a list of necessary documents.
- A copy of the applicant’s Aadhaar Card/Passport/Voter’s ID Card/PAN Card/Driving License as identity proof
- A copy of the applicant’s address proof: Aadhaar Card/Passport/Voter’s ID Card/Driving License
- Bank statement for the last 6 months
- Latest ITR
- Proof of continuation (ITR/Trade license/Establishment/Sales Tax Certificate)
- CA certified company balance sheet and Profit & Loss account for the previous 2 years
- Company registration certificate/partnership deed/ Sole Prop. Declaration/ certified true copy of Memorandum & Articles of Association (certified by Director) and Board resolution
Note: Check with the bank for the latest list of documents required at the time of applying for a business loan.
How to apply for a business loan from the HDFC Bank?
You can apply for a business loan from HDFC Bank online and offline. The process of applying for a business loan online and offline differs. Here are the steps to do it.
- For offline application, you can visit the nearest HDFC Bank branch.
- Enquire about the business loan, the current rate of interest, eligibility, documents required, etc. Also, get an application form.
- You can fill in the application form, attach the necessary documents and submit it for approval. You may have to pay processing charges while submitting the application form.
- Your application will be processed, and the bank will sanction a loan of an amount according to your eligibility and credit score.
- Once you agree, you can sign the business loan agreement and the loan amount will be disbursed quickly.
Online application process
The process of applying for a HDFC Bank business loan online is easy.
- Visit the bank’s website i.e. hdfcbank.com. Click on ‘Apply online’.
- Fill in the required details such as your mobile number, PAN card details, etc.
- Fill in your requirement for the loan amount.
- Verify your details and upload mentioned documents.
- Get loan disbursement.
Closing thoughts: Things to keep in mind before taking a business loan
As a borrower of a small business loan, always negotiate the loan offer made. To do so, ensure that you approach multiple banks/lenders to get the best loan offers. You should also use a business loan EMI calculator to understand the instalment amount you will have to repay every month.
Whether you are taking a HDFC Bank loan or SBI business loan or even a government loan for MSMEs e.g. SIDBI loans, SBI e-Mudra loans, or a Paytm business loan, the important thing to be sure of your purpose and the amount you need. Loans borrowed have to be repaid in instalments over the years. So, ensure that you forecast, strategise and borrow accordingly.
Frequently asked questions on HDFC Bank business loans
Here are answers to some frequently asked questions regarding a business loan from HDFC Bank.