Business Loan in Gujarat

Gujarat: Business Opportunity & Landscape

The Modinomics says that Gujarat means business. Gujaratis are one of the wealthiest people in India and the world. Be it Gautam Adani or Mukesh Ambani; these businessmen have their base in Gujarat. So if you live in Gujarat and are still unemployed, this is the time you should take a business loan and start your business in one of the most business-oriented states of the country. 

The people of Gujarat have an entrepreneurial mindset. As a result, the state has given birth to many industrialists and billionaires. Big giants like Reliance, Adani, Amul, Godrej, Parle, Symphony, Pidilite, Vadilal, Torrent, Zydus Cadila, Sun Pharma, Biocon, Havmor, Nirma, Balaji Wafers, and so many more are ruling the Indian Market. 

India’s most industrialised state, Gujarat, ranks 1st in ‘ease of doing business in India. The western jewel of India is crowned as “Asia’s Biggest Investment Opportunity Centre”. Gujarat is also called the ‘petro-chemical capital’ due to its big refineries, including the world’s largest oil refinery, The Jamnagar Oil Refinery. 

The “Growth Engine of India” has also hugely benefited from Green Revolution in the agriculture sector. Bajra, Groundnut, Mustard, Sesame, Cotton and many more are the primary agricultural crops, while Mango, Tomato, Onion, Potato and more are the major horticulture crops. 

The 3rd largest taxpayer state in India, Gujarat tax collection sums upto 27% of India. The state employs around 35% of the country’s total working population and accounts for 60% of the total cotton export. Gujarat’s outstanding road network, accessibility to a broad transportation platform, high-end technology, and communication are the main aspects of this growth.

The ‘Modi-fication’ of Gujarat in 2002 inspected the biennial investors’ summit, the “Vibrant Gujarat”, in 2003, which made Gujarat the investment, business networking and knowledge sharing hub, and the 9th VGGIS 2021 provided Gujarat FDI of 35% of India’s total. The 10th edition of this summit is aimed to attract investment in the Gujarat International Finance Tec-City, The Dholera GIFT City. The city comprises various SEZs, corporate parks, and integrated townships. Located on the bank of the Sabarmati river between Ahmedabad and Gujarat, this world-class vertical city is a “Walk to Work” city. 

Gujarat is a role model in infrastructural growth. Some of the outstanding, futuristic and massive infrastructures of the state are the GIFT city, one of the five biggest dams in India; the Sardar Sarovar Dam; Asia’s largest solar park at Charank; 19,000 km Narmada Canal and the longest river bridge of the state, the Narmada bridge; world’s best sustainable transport lines, the Ahmedabad BRTS; the tallest statue of the world “The Statue of Unity” and the upcoming “High-Speed Mumbai-Ahmedabad Bullet Train” that will provide a world-class and future-oriented connectivity and make Gujarat an attractive destination for investment. 

Known as the ‘Land of Legends,’ Gujarat is also a very friendly tourism hotspot. The “nine nights” Navratri Festival and “Rann Utsav” are famous festivals worldwide. The major tourist destinations are the UNESCO world heritage city, Ahmedabad; 2600 BC old Dholavira civilisation, ‘The City of flyovers’ Surat, The Gir Forests, and temple towns of Dwarka and Somnath.

Famous as the “Manchester of India”, Ahmedabad is Gujarat’s business and financial capital and is now a hub of IT and Tech-based industries and startups. Popularly known as “Diamond City”, Surat dominates the diamond polishing and gem business worldwide and is always connected with other business centres, including Mumbai, Brussels, New York, Dubai, London and Tel Aviv. “City of Chemicals”, Vapi is home to various industries and SMEs indulged in chemical production, directly or indirectly. 

Going through the article, you will understand the various types of loans available to find the best one that fits your requirements.

Why do you need a business loan?

Are you looking for ways to achieve your business goals? If so, this guide is for you. It will provide a complete overview of how to create a plan, implement it, and keep your business running.

A business loan is a kind of debt financing. Compared to other forms of financing, it has the lowest interest rates and most extended repayment terms. Business loans are available to purchase equipment, acquire inventory, or fund business ventures. They can also finance working capital needs or major renovation projects.

If you are a manufacturer, supplier or retailer of goods, such as appliances or electronics, then you may be able to apply for an equipment financing loan. The loan will help you purchase materials and machinery needed to manufacture products that can then be sold or leased.

Following are the reasons you should consider acquiring a business loan:

• You can get more financial resources than you require for your business and use them to invest in other projects.

• You can kick off your new project without any worries about the capital required.

• You can get financial credits at lower interest rates.

• You don’t have to worry about paying back the loan, as it will automatically be deducted from your bank account monthly. 

Reasons you should take a business loan in Gujarat.

Businesses that are the latest in textiles, e-commerce, and fashion are offered a bundle of possibilities in Gujarat. Therefore, it’s easy to see why getting a business loan in Gujarat could likely be sought-after by many entrepreneurs.

The emerging sectors of businesses in Gujarat include arts & crafts, fertiliser production, raw textile storage, jeans manufacturing, mobile car wash, food manufacturing, bookstores, fashion design studio, and much more.

The future of entrepreneurs in the state of Gujarat is going to be bright, with many opportunities coming up for commercial settings. This is the right time to take your first step to building the foundation of your dream business with the best business loan lenders in Gujarat.

Which are the best business loans in Gujarat?

Different types of loans are available, depending on the bank or NBFC you are approaching. Some banks offer a wide range of loan types, while others specialise in certain areas. To find the lender with the most competitive rates, you can analyse rates offered by different financial institutions to see if one leads them all.

When looking for the best suitable loan rates, you should shop around and compare offers from different institutions. Several factors can affect the terms and rates of a loan, so make sure you find one that matches your personal needs.

There are four basic types of loans:

• Equity-based loans;
• Debt-based loans;
• Lines of credit; and
• Asset-based loans.

Top 10 Banks & NBFCs Offering Business Loan in Gujarat

Citi Bank

A foreign bank called Citibank India runs a full-service onshore platform in India. Their Indian headquarters are located in Mumbai’s BKC neighbourhood. The bank offers diversified financial products to self-employed professionals Pvt. Ltd. firms, companies, and business owners. You can also apply for Citi Bank’s business loan through the online process.

Key Features:

• The maximum loan amount could be Rs. 30,00,000/-
• 12 to 60 months are the range for the loan term.
• Citi commercial loans are offered at an interest rate of 12%-18%
• Processing fees is upto 2%
• Repayment could be made through SI, ECS or PDCs.

State Bank of India

The bank offers a range of financial products; Term Loan is popular. The MSME companies can apply for SBI business loans. Developing small enterprises’ current and fixed assets is the central goal of the SBI’s streamlined small business loans. The loan can be availed based on the company’s current account status.

Key Features:

• SBI commercial loans come with an interest rate of 11.20% p.a.
• The loan tenure could be anywhere between 12 to 48 months.
• The SBI streamlined up to a 60-month repayment schedule for small business loans.
• A business loan from SBI must have a 5-year business history and a current account minimum of 2 years old.
• 2 % – 3% of the loan amount is the processing fees.

ICICI Bank

ICICI Bank offers business loans with great benefits for startups in India. The “iStartup 2.0” campaign offers various solutions for businesses, helping entrepreneurs save time and effort to concentrate on more critical business factors. In addition, financial products have been designed to help entrepreneurs in their business expansion.

Key Features:

• The minimal loan amount is ₹1 lakh, and the maximum is ₹40 lakhs. 
• Loan tenure is between 12 months and 36 months.
• The annual interest rate is about 15.50%.
• CIBIL score, ITR, and annual sales are some of the details necessary.
• The loan processing fees are 0.99-2%.

HDFC Bank

HDFC Bank Limited is one of the country’s leading banking and financial services companies, headquartered in Mumbai. HDFC can assist startups in growing their operations by providing additional financial assistance.

Key Features:

• The HDFC bank offers secured business loans of up to ₹40 Lakhs and even ₹50 Lakhs in exceptional cases.
• An annual business turnover of around Rs. 40 lakhs is needed.
• The tenure of the loan ranges from 12 months to 48 months.
• The interest rate ranges from 11.90% to 21.35%.
• Processing Charges for Loan – Up to 2.50% of the loan amount or nil.

Axis Bank

The bank provides financial services to large and mid-size businesses, SMEs, and businesses in the retail industry. With its headquarters in Mumbai, Axis Bank offers the needed funds to help you with your business requirements. The wide range of financial products includes working capital finance, InstaOD, Finance for import and export, and more. 

Key Features:

• You can apply for a loan of up to 50 Lakhs INR. 
• The loan repayment period would be 36 months.
• Interest rates fall between 14.25% to 18.50%. 
• The processing charge is equal to 2% of the loan amount sought.

IDFC First Bank

One of the private sector banks in India that is owned by Mumbai-based IDFC, an integrated infrastructure finance firm, is IDFC First Bank. The benefit of IDFC First Bank is that they support business owners by providing business loans for equipment purchases, business improvements, and other uses.

Business Instalment Loans are accessible to professionals and non-professionals, and businesses. It provides an unsecured loan without the necessity for security. The sort of business, the borrower’s ability to repay, and their income affect how much money they can borrow from IDFC First Bank.

Key Features:

• The interest rate varies as per requirements.
• The credit offered is upto Rs. 1 cr.
• The loan repayment tenure is upto 4 years.
• A business vintage of 3 years is mandatory.
• 3.50% of the sanctioned amount is charged as processing fees.

Bajaj Finserv

The leading NBFC offers MSME loans for expanding businesses’ financial needs. The loan can be availed for complying with the traffic situation, expenditure on infrastructure, equipment installation and overhead payments. In addition, Bajaj Finserv accepts online orders, and the processing time is about 24 hours.

Key Features:

• A maximum of Rs. 45 lakhs loan amount without collateral or forfeiting assets. 
• Interest rate starts from 17% p.a.
• The loan tenure is between 12 to 96 months.
• The processing charge is upto 2% of the loan amount.

Tata Capital

The business loans from Tata Capital can be used for SME loans, machine loans, and mobile equity loans. Each loan comes with structured EMI choices that let you tailor it to your company’s needs. This will assist you in planning how your cash flow will perform.

Key Features:

• Custom business loans range from Rs. 5 lakhs to Rs. 75 lakhs.
• The interest rate starts from 19% p.a.
• No collateral requirement.
• The repayment duration is 12 to 36 months.
• 1%-2.5% of the loan amount is the processing charges.

Lendingkart Finance Limited

Lendingkart is an NBFC that offers loans upto Rs. 2 cr. and essential components to launch your new business. The applicant should submit their initial loan application online, alongside all other needed supporting documentation. It takes roughly 3 days to complete Lendingkart.

Key Features:

• Lendingkart loans come with a monthly interest rate of 1.5%-2%
• The repayment tenure is between 1 month to 3 years.
• No collateral or security is required.
• The business turnover for the past 3 months should be more than Rs. 90,000.
• 2% – 3% of the sanctioned amount is the Processing Fees.

Kinara Capital

Businesses classified as MSMEs can apply for business loans from Kinara Capital. By providing small company owners in India with quick, flexible loans without the need for collateral, Kinara Capital hopes to impact lives, livelihoods, and local economies.

This is a good option for small business owners looking for a rapid and secured business loan with minimal paperwork.

Key Features:

• The loan amount ranges between Rs. 1 lakh to 30 lakhs.
• The interest ranges between 21% to 30% p.a.
• There is zero collateral requirement.
• The loan can be secured for a tenure of 12-60 months.
• Monthly turnover should be between Rs. 50,000 to Rs. 2 cr. to secure the credit.

Conditions for loan eligibility

The criteria to determine if you are eligible for small-business loan for small business loans in Gujarat are as the following:

• Owners and self-employed people or individuals who are involved in partnerships and private limited companies as well as companies engaged in manufacturing or trading services in Gujarat

• Candidates who have been in their current position for at least 3 years and possess at least 5 years of business knowledge

• Individuals who have a minimum age of age 22 before the date of applying for the loan, and up to 65 years as of the date of the maturity of the loan

• Businesses need to have a turnover that is Rs. 10 Lakhs.

• Companies that have made profits within the past two years

• Businesses must earn at least 2 lakhs annually.

• The following is the list of small business loans in Gujarat ranging from Rs 50 lakhs. It is important to note that this is just an indicative list and is not exhaustive. 

• The documents must depend on the reason for the loan, the credit history as well as the financial condition of the business, etc.

Documents required for a business loan

The required documentation is minimal and hassle-free to obtain an unsecured business loan in Gujarat. 

Here is a list of the documents required for obtaining a loan:

• Identity proof and PAN card for a firm, a company, or an individual

• Documents proving residences, like Voter ID cards, Ration Card passports, and Driving licences.

• Documents for income, including the most recent income Tax returns, the income statement, the profit and loss account, and the balance sheet from the two most recent years.

• Documents that prove continuation, such as Income Tax Returns or Trade Licence Establishment, Sales Tax Certificate

• Other documents might include a declaration of Sole Proprietorship or a certified copy Partnership deed, the official copies of the Memorandum, the Articles of Association, and the Board Resolution.

The list above isn’t complete. When applying, the documents you must submit will depend on your financial situation, the bank’s risk assessment, the loan you seek, and the lender’s policy.

Process to apply

The first step is understanding the bank’s requirements and then filling in the application form accordingly.

Many banks offer business loans in Gujarat and might have different requirements. Hence, you should research these aspects if you want to get a small business loan in Gujarat quickly. 

The lender is determined to dispel the myth of the business loan application process that typically brings thoughts of long lines of people waiting in line and endlessly waiting to find out what happens to your loan. So instead, we have created a fast, easy, and user-friendly loan application process.

• Visit a business loan branch or outlet in Gujarat, India.

• Before applying for any business financing, it’s important to make sure that you meet any minimum qualifying criteria and submit a set of mandatory documents.

• Fill out the offline business loan application form by furnishing your details and choosing the required loan amount and repayment tenure.

• Go through the terms and conditions before accepting.

• Please attach a photocopy of your KYC documents and your income proof, among other documents.

• Once you have submitted and verified your application, the decision to approve your business loan will be determined. Once approved, the money will be credited immediately to the bank account.

• The application process will undergo several verification steps in which the information provided will be checked against the documents submitted as proof or evidence. 

• Once the loan verification process is completed, you will receive a personalised loan proposal. Once you’re approved, the money will be deposited into your account.