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Paytm, is a household name in the world of digital payments in India. But did you know, it also facilitates Paytm business loan of up to ₹5 lakhs to its merchants? It is estimated that over 20 million merchants and small scale businesses use Paytm to accept payments online with ‘Paytm for Business’. Not surprisingly, in its goal to bring digital financial services to the underserved and unserved sectors of the economy, Paytm now has ventured into lending (in association with Paytm’s financial lending partners) and offers business Paytm loan to eligible borrowers.
In this article we understand the features of Paytm business loans, documents required, eligibility, loan amount, interest rates and more, to help you make informed decisions when seeking a small business loan.
What is Paytm business loan?
In general, when small businesses seek business loans, banks and NBFCs are the obvious choices. Securing a SBI business loan or HDFC bank business loan or even a government MSME loan through SIDBI or other MSME loan schemes, is often the first choice.
However, with business loans on Paytm, small scale business owners can avail low-value loans easily without much hassle.
Paytm merchants can apply online for Paytm business loans for up to ₹5 lakh.
For more information and Paytm business loan details, visit: paytm.com/loans-credit-cards/business-loan/
Features of business loans on Paytm:
- Collateral-free – i.e., merchants don’t have to pledge any asset against the loan as security
- Easy repayment – Hassle-free daily instalment payments via auto deduction from Paytm settlements for Paytm business loan repayment
- Competitive loan interest-rates – Paytm business loan interest rate is based on the loan amount, borrower’s profile, and the bank/NBFC business loan
- Zero foreclosure charges – i.e., loans can be repaid loan earlier than the loan tenure without having to pay any fine/charges for foreclosure
- Eligibility – Existing Paytm merchants
- Loan amount offered – Up to ₹5 lakhs
Trivia: As per Paytm’s website, over 2 lakh Paytm merchants have availed unsecured business loans through Paytm.
How to apply for Paytm business loan online?
The loan application process on Paytm is simple, quick and online.
You should have the Paytm for Business application downloaded on your phone and visit the ‘Business Loan’ tab to get started.
As a Paytm merchant, you will get a pre-approved business loan offer (e.g., ₹4 lakhs) with a breakdown of all the additional details, such as:
- Loan offer or amount you get
- Total repayment amount at 2% per month
- Daily instalment amount you pay
- Tenure of loan (usually in days)
You can use the online slider/ruler to modify the loan amount you are seeking. Accordingly, the other details will get refreshed. Select ‘Get started’ to proceed.
The application process mainly consists of the following stages:
- Updating details of the loan applicant – PAN number (to check if you have a good credit score for borrowing), Date of Birth, email address (this is required as all loan documents and other information will be emailed here)
- KYC verification including uploading a clear selfie image – this is to verify your identity
- Review of application – includes checking all details and ensuring the correct bank account is selected (once accepted, there can be no further changes made)
- Loan approval – i.e., verifying eligibility, business financial health and other details to process application
- Disbursal directly to bank account
To check your Paytm business loan repayment history, you can click on the Business Loan icon for details.
Note: It is recommended that you repay loan instalments in time to maintain a good credit score and increase your chances of getting better loan offers in future.
Benefits of Paytm business loans vis-à-vis other banks/NBFCs
There are several benefits of availing a business loan via Paytm for Business. The question however is: Is this the best loan offer for your business?
We do a quick comparison of bank/NBFC business loans interest rates and other components vis-à-vis of Paytm business loans to understand if it’s the right deal for you or not.
Paytm business loans vs Bank/NBFC business loan
Bank/NBFC business loans
Paytm business loans
|Loan eligibility||Any MSME or start-up
Does not need an existing bank account
For OD facility, must have a current account with bank
|Must be an existing Paytm merchant/small business|
|Collateral requirement||Loans with collateral
Loans with FD requirements
|Collateral-free business loans|
|Type of loan||Working capital loans
Small business loans
Inventory loans and more
|Usually, working capital loans|
|Loan tenure||Short term loans – 1 to 5 years
Long term loans – 5 to 10 years (can extend up to 25 years)
|Short period loan
Repayment as daily instalments (auto deduct)
Based on lender
|Loan amount||Usually up to ₹1 crore (up to ₹2 crore for some lenders based on borrower profile)||Up to ₹5 lakh|
|Interest rates||Competitive interest rates
9 – 26% p.a., based on lending bank/NBFC
|1-2 % p.m.
Low-interest rates (daily, monthly, annually)
|Fees and other charges||Processing fees (usually 1-3% + taxes), documentation charges, stamp duty, foreclosure charges, etc.||No foreclosure charges|
|Loan application mode||Online and offline business loan application||Online only (via Paytm for Business mobile app)|
*Borrowers are requested to check with their lending institutions for the latest updates on loan amount, eligibility, interest rates, repayment tenure and other terms and conditions.
In brief, as a MSME owner, if you are using Paytm for Business and require instant funds for meeting daily operational expenses at work, Paytm business loans is a reliable choice. If it’s a planned spend and you require a larger sum, check with your nearest bank or apply for Business Loans on Tata nexarc.
Some of the other benefits of availing business loans through Paytm are:
- Check and track repayment history on app
- Quick approval process with disbursal directly to bank account
- Pre-approved loans based on merchant’s transaction history
- Higher loan offers based on merchant’s repayment record and other financials
FAQs on business loans through Paytm
A quick look at some of the most frequently asked questions on business loans via Paytm.
Which banks/NBFCs have partnered with Paytm for business loans to small businesses?
Paytm has partnered with leading banks and NBFCs in India to offer instant, collateral-free business loans of up to ₹5 lakhs to Paytm merchants. Its current partners (as of May 2023) include:
- Piramal Finance
- Fullerton India
- Suryoday Bank (Suryoday Small Finance Bank Ltd.)
- Clix Capital
What is the maximum loan amount offered for Paytm business loans?
The maximum loan offered was initially ₹2 lakh but is now increased to ₹5 lakh.
When was Paytm business loans launched?
Since 2022, Paytm has partnered with financial institutions and offer business loans to small businesses via its Business Loans feature on Paytm for Business.
Do I have to provide a collateral for Paytm loans?
Paytm business loans are zero-collateral loans, that is, you do not have to provide any asset as collateral for seeking the loan.