Business Term Loan

A term loan is a fixed amount disbursed up front and repaid in scheduled instalments over a set period. Unlike a revolving limit, it does not replenish as you repay: once the tenure is agreed, the repayment schedule is known from the first day, which makes it easy to budget against.

It is the right instrument for one-time, capacity-building spending. Recurring shortfalls — stock, salaries, supplier payments — belong in a working capital facility instead. Using a term loan for day-to-day gaps means paying interest on the full amount even in months you do not need it.

• Plant, machinery and equipment purchase or upgrade.
• A new branch, unit, warehouse or showroom, including civil work and fit-outs.
• Commercial vehicles and delivery fleet.
• Technology, automation and capacity expansion ahead of a confirmed order book.
• Consolidating expensive existing borrowings into one structured repayment — see debt consolidation.

A secured term loan is backed by property, the asset being financed, or both. Lower risk for the lender means larger amounts, longer tenures and sharper pricing — which is why most sizeable expansion finance in India is secured. A loan against property is often the cheapest long-tenure route where property is available.

An unsecured term loan needs no collateral and is judged on GST filings, bank statement conduct, existing obligations and credit history. It is faster to arrange and keeps property free, but amounts are smaller and pricing higher. Registered MSMEs should also check guarantee-backed options before assuming collateral is unavoidable.

Lenders assess business vintage, turnover trend and consistency across GST returns and bank credits, profitability and cash flow cover for the proposed EMI, existing obligations and repayment record, promoter credit history, and the security offered. Where the loan funds an asset, they also look at how quickly that asset starts contributing to revenue.

Proprietorships, partnerships, LLPs and companies can all apply, and criteria vary widely between lenders. Try our eligibility checker or the EMI calculator for an indicative view before approaching anyone.

Indicative pricing on our panel runs 10.50% – 18.00% p.a. per annum, as of 10 July 2026. Rates are set by the lender and depend on security, tenure, turnover, industry and credit profile.

Look past the headline rate. Processing fees, valuation and legal charges on secured loans, insurance on the financed asset, foreclosure terms and any lock-in all form part of the real cost. A lower rate with a rigid prepayment clause can work out dearer than a slightly higher rate you are free to refinance. Current indicative ranges across products are on our rates page.

Our term loan explainer walks through matching tenure to the life of the asset, and the business funding guide compares a term loan with revolving limits. For local help, see term loans in Chennai.

• KYC of the business and of the proprietor, partners or directors.
• GST certificate, Udyam registration, partnership deed or incorporation documents.
• Audited financials and income tax returns for the last two to three years.
• GST returns for the recent period.
• Twelve months of bank statements for all operating accounts.
• Existing sanction letters and repayment track record.
• Quotation, proforma invoice or project report for the asset or expansion being funded.
• Property title documents and tax receipts, where collateral is offered.

1. Tell us the purpose and amount — what you are funding and when you need it.
2. Free profile review — we read your financials the way a credit officer will and check EMI affordability.
3. Fix the structure — secured or unsecured, tenure, and whether a moratorium is worth asking for.
4. Prepare the file — documents and the project note organised before submission.
5. Apply with matching lenders — placed only where the criteria genuinely fit your profile.
6. Compare and close — total cost across offers, then valuation, legal and documentation through to disbursal.