₹ 2 lakh – ₹ 80 lakh
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Unsecured Business Loan Explained
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An unsecured business loan is a type of financing that does not require you to pledge collateral or assets. These loans are usually approved based on factors like credit history, income, and business performance. The process is often quick and online, making it easier for entrepreneurs to access funds for working capital, expansion, or other business needs without the risk of losing personal or business property.
Unsecured business loan features and benefits
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Easy repayment options
This loan gives you the option to pick a comfortable tenor that ranges up to 96 months.
Flexi facility
For added financial flexibility, you can opt for the Flexi loan facility. This allows you to reduce EMI outgo by up to 45%*.
Personalized loan deal
To expedite loan processing and avail of special terms, check for a pre-approved loan offer by sharing basic details.
Online loan management
Access key loan information such as loan statements and manage your EMIs digitally with the online customer portal.
Unsecured business loans have an attractive advantage over secured loans in that you do not have to provide collateral to avail of them. This means that taking an unsecured loan in India for business expenses helps safeguard your assets. In addition to this benefit, an unsecured business loan comes loaded with several attractive features.
Unsecured business loan eligibility criteria and documents required
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Age
21 to 80 years*
(* Age should be 80 years at the time of Loan Maturity)
- CIBIL score
650 or higher Work status
Self-employed
Nationality
Indian
Business vintage
At least 3 years
You will need the following documents to apply
- KYC documents
- Proof of business ownership
- Bank statements of the previous months
- Other financial documents
Unsecured business loan interest rate and charges
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We ensure 100% transparency with all fees and charges applicable to our loans. Refer to the following table for the interest rate and a breakup of a few fees you may have to pay.
Type of fee Applicable charges Rate of interest 14% to 23% per annum
For Emergency Credit Line Guarantee Scheme (ECLGS) 5.0: 8.50% p.a. to 13% p.a.
Processing fees Up to 4.72% of the loan amount (inclusive of applicable taxes) Bounce charge Rs. 1500/- per bounce.
“Bounce charges” shall mean charges for (i) dishonour of any payment instrument; or (ii) non-payment of instalment (s) on their respective due dates due to dishonour of payment mandate or non-registration of the payment mandate or any other reason.
Flexi Facility Charge Term Loan – Not applicable
Flexi Loan – Up to Rs 999/- to Rs 16,999/- (Inclusive of applicable taxes)
will be deducted upfront from loan amount.
Penal interest Delay in payment of instalment(s) shall attract Penal Charge at the rate of 36% per annum per instalment from the respective due date until the date of receipt of the full instalment(s) amount. Pre-payment charges Full Pre-Payment
• Term Loan: Up To 4.72% (Inclusive Of Applicable Taxes) On The Outstanding Loan Amount As On The Date Of Full Pre-Payment.• Flexi Term (Dropline) Loan: Up To 4.72% (Inclusive Of Applicable Taxes) on the outstanding loan amount, As On The Date Of Full Pre-Payment.
• Flexi Hybrid Term Loan: Up To 4.72% (Inclusive Of Applicable Taxes) on the outstanding loan amount, As On The Date Of Full Pre-Payment.
Part Pre-Payment:
• Term Loan: Up To 4.72% (Inclusive Of Applicable Taxes) Of Principal Loan Amount Prepaid On The Date Of Such Part Pre-Payment.
• Not Applicable For Flexi Term (Dropline) Loan And Flexi Hybrid Term LoanStamp duty (as per respective state)
Payable as per state laws and deducted upfront from the loan amount. Annual maintenance charges Term Loan: Not applicable
Flexi Term (Dropline) Loan: Up To 0.59% (Inclusive Of Applicable Taxes) Of The Dropline Limit (As Per The Repayment Schedule) On The Date Of Levy Of Such Charges.
Flexi Hybrid Term Loan: Up To 1.18% (Inclusive Of Applicable Taxes) Of The Dropline Limit During Initial Loan Tenor. Up To 0.59% (Inclusive Of Applicable Taxes) Of Dropline Limit During Subsequent Loan Tenor.Credit Guarantee Scheme Fee Credit Guarantee Fund for Micro Units (CGFMU): Credit Guarantee Scheme fee - Up to 1.18% p.a. (pro rated daily till 31st March) (inclusive of all applicable taxes) of loan amount.
Credit Guarantee Fund Scheme for Micro and Small Enterprises (CGTMSE): Credit Guarantee Scheme fee – Up to 0.885% (inclusive of all applicable taxes) of loan amount (for first 12 months).Credit Guarantee Scheme Renewal Fee Credit Guarantee Fund for Micro Units (CGFMU):
Credit Guarantee Scheme Renewal fee – Up to 1.18% p.a. (inclusive of all applicable taxes) on the outstanding loan amount/Dropline limit as on April 01 of the subsequent Financial Year.
*Renewal Fee to be collected only for 3 subsequent financial years.
**If the Remaining Tenure is less than 12 months, the CG Fee in subsequent years shall be charged prorated.
Credit Guarantee Fund Scheme for Micro and Small Enterprises (CGTMSE):
Credit Guarantee Scheme Renewal fee – Up to 0.885% (inclusive of all applicable taxes) annually on the outstanding loan amount/Dropline limit as on the last day of the month preceding the anniversary date of pool submission
*If the Remaining Tenure is less than 12 months, the CG Fee in subsequent years shall be charged prorated.
Note: For loans under the Emergency Credit Line Guarantee Scheme (ECLGS) 5.0, only Stamp Duty charge is applicable.
Types of unsecured business loan
Unsecured business loans are available in different forms to meet the unique needs of entrepreneurs across sectors.
- MSME Loan: MSME loan is specially designed for micro, small, and medium enterprises, these loans help in managing day-to-day expenses, buying machinery, or scaling operations.
- Trade finance: Trade finance offers funds to businesses involved in import or export, ensuring smooth transactions and timely payments to suppliers.
- Startup business loan: Startup business loan provides new entrepreneurs with financial support to kickstart operations, invest in infrastructure, and cover initial working capital needs.
- Supply chain finance: Supply chain finance helps businesses manage cash flow by offering credit to suppliers or buyers within the supply chain, ensuring continuity of operations.
- Shop loan: Shop loan is aimed at small shop owners, these loans can be used for renovation, purchasing inventory, or expanding the shop’s offerings.
- GST business loan: Based on GST returns, GST business loans are offered to businesses with consistent sales records, making access to credit easier without heavy documentation.
- Business loan for women: Business loan for women are tailored to support women entrepreneurs, offering funds to start or expand businesses with added benefits like lower interest rates in some cases.
- Working capital loan for women: Working capital loan for women provides short-term funds to women-led businesses to cover daily operational expenses like salaries, rent, or raw material purchase.
- Loan without financials: Loan without financials are designed for businesses that lack detailed financial statements, these loans are provided based on alternate eligibility like bank statements or GST returns.
Check your pre-approved business loan offer
How to apply for unsecured business loan
- Click on ‘CHECK ELIGIBILITY’ to open the online application form
- Enter your basic information and input the OTP sent to your mobile number
- Fill in your personal and business information
- Upload the bank statement for the last 6 months and submit your application
Our representative will call you once you’ve applied for loan processing assistance.
*Conditions Apply
**Document list is indicative
Difference between secured business loans vs. unsecured business loans
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Secured business loan Unsecured business loan Collateral (security) is needed No collateral or security needed Interest rates are usually lower Interest rates are usually higher Available even if borrower has less credit history or low credit score Often needs a better credit score Lender can take your collateral if you don’t repay Lender must go to court to recover money if you don’t repay Borrowing limits are higher because loan is backed by collateral Borrowing limits may be lower as no collateral is provided May ask for a personal guarantee Usually asks for a personal guarantee May accept lower business income as qualification Often needs higher business income to qualify Important considerations before applying for an unsecured business loan
- Loan eligibility criteria
- Check minimum business vintage (e.g. 1–3 years in operation)
- Verify income and turnover requirements
- Understand credit score benchmarks (usually 685+ for better offers)
- Interest rates and charges
- Compare interest rates across lenders
- Look out for hidden fees (processing charges, prepayment penalties, etc.)
- Loan amount and repayment tenure
- Choose a loan amount that suits your business need without over-borrowing
- Opt for a repayment tenure that balances EMIs and cash flow
- Purpose of the loan
- Clearly define how the funds will be used (e.g. working capital, expansion, inventory)
- Lenders may ask for intended usage during application
- Repayment capacity
- Evaluate your monthly income and expenses
- Use a business loan EMI calculator to plan EMIs comfortably
- Impact on credit score
- Missing EMIs on an unsecured loan can severely impact your credit rating
- Responsible repayment helps improve creditworthiness
- No collateral needed – but higher risk
- Since it's unsecured, lenders take a bigger risk, often resulting in higher interest rates
- You should have a strong financial profile to compensate for lack of security
- Documentation requirements
- Basic KYC documents
- Business financials (bank statements, ITRs, GST returns)
- Business registration proof
- Lender’s reputation and flexibility
- Choose an established lender with good customer service
- Look for flexible repayment options or top-up loan availability
- Read the fine print
- Understand all terms and conditions
- Check clauses on defaults, restructuring, and foreclosure
- Loan eligibility criteria
Our loan variants
Get business loan for your needs
Women Business Loan
Get Women Business Loan upto 80 Lakh
Medical Store Business Loan
Get Medical Store Business Loan upto 80 Lakh
Manufacturer Business Loan
Get Manufacturer Business Loan upto 80 Lakh
Loans for business needs
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Business loan for different budgets
2 lakh business loan
3 lakh business loan
5 lakh business loan
10 lakh business loan
15 lakh business loan
20 lakh business loan
25 lakh business loan
30 lakh business loan
50 lakh business loan
Types of business loan
Unsecured Business Loan
Secured Business Loan
Term Loan
Cash Credit
Working Capital Loan
Machinery Loan
Line of Credit
Micro Loan
Merchant cash Loan
Frequently Asked Questions
Overview
How can unsecured business loans be beneficial?
Unsecured business loans are beneficial as they provide quick access to capital without requiring collateral, offering flexibility in usage, and helping businesses meet short-term financial needs without risking assets.
Can startups get unsecured business loans with good interest rates?
Early-stage startups with less than 3 years of business vintage generally do not qualify for unsecured business loans, although eligibility varies by lender. Businesses with at least 3 years of vintage, a preferred CIBIL score of 650 or above, and a stable financial profile may qualify for interest rates starting from 14%–23% p.a. Startups that do not meet these criteria can explore startup-focused or GST-based financing options, where available. Eligible businesses can also apply for a Bajaj Finance Business Loan to support their growth.
What is the maximum term for an unsecured business loan?
The maximum term for an unsecured business loan typically ranges from 1 to 5 years, depending on the lender and the borrower’s creditworthiness, with shorter terms commonly available for smaller loan amounts.
What is the maximum limit of an unsecured business loan?
The maximum limit for an unsecured business loan varies by lender but generally ranges from ₹2 lakh to ₹80 lakh, with higher amounts possible for businesses with strong financials and credit histories.
Is an unsecured loan good for business?
An unsecured loan can be good for businesses needing fast, collateral-free financing. However, it may come with higher interest rates and shorter repayment terms compared to secured loans, depending on creditworthiness.
What happens if an unsecured business loan is not able to pay?
If a borrower fails to repay an unsecured business loan, the lender may impose penalties, report defaults to credit bureaus, and initiate legal action. This can affect both the credit score and future loan eligibility of the business.
Is insurance mandatory for unsecured business loans?
Insurance is not mandatory for unsecured business loans. However, some lenders may recommend or offer insurance as an additional safeguard for borrowers.
Can you get a small business loan for real estate in India?
Early-stage startups with less than 3 years of business vintage generally do not qualify for unsecured business loans with competitive interest rates, although eligibility varies by lender. Businesses with a minimum business vintage of 3 years, a preferred CIBIL score of 650 or above, and stable financials may qualify for interest rates ranging from 14%–23% p.a. Newer businesses that do not meet these requirements may consider startup business loans or GST-based loan options, where available. Eligible businesses can also explore a Bajaj Finance Business Loan to support their growth plans.
How to increase your chances of getting an unsecured business loan?
Your approval chances for an unsecured business loan improve significantly when you address five key areas before applying.
- Maintain a CIBIL score of 685 or above.
- Ensure your business has a minimum 3-year vintage.
- File ITRs for at least the last 2 years.
- Keep GST returns, bank statements, and financial records up to date.
- Apply for a loan amount that matches your repayment capacity.
If you meet the eligibility criteria, you can apply online with Bajaj Finance and verify your application through an OTP-based process for a quick and convenient loan journey.
Is it possible to get an unsecured business loan without a business plan?
Yes, existing businesses can often get an unsecured business loan without a formal business plan, as lenders typically assess financial statements, bank statements, repayment capacity, and creditworthiness instead. A minimum business vintage of 3 years and a preferred CIBIL score of 650 or above generally improve your chances of approval, subject to the lender's eligibility criteria.
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Disclaimer
Bajaj Finance Limited has the sole and absolute discretion, without assigning any reason to accept or reject any application. Terms and conditions apply*.