Business Loan Interest Rate at SMFG India Credit

A business loan interest rate is one of the most important factors to consider when applying for a loan, as it directly affects your monthly EMIs and the total loan cost. It is essentially the percentage a lender charges on the amount borrowed to finance business needs. The interest rates of a business loan are determined by the lender based on several factors, such as the business income, creditworthiness, financial health, repayment capacity, and more.

At SMFG India Credit, we offer customised business loan solutions with competitive rates that match your business needs and financial profile.

No matter what your need is – working capital, purchase of new machinery, or business expansion, our affordable solutions will ensure that you meet your business loan requirements in the easiest and most convenient manner.

Upon receiving your application, you will first be evaluated for eligibility as per our policy at the time of loan application based on the information you provide us. If deemed eligible, our representative will get in touch with you to understand your requirements in detail and set up an appointment for document collection. Depending on what you require, your credit score, business turnover and other financials, we will arrive at the best possible and minimum business loan interest rates that can be offered to you.

Below is an overview of the interest rates of a business loan and other charges. A detailed breakdown of the charges will be a part of your loan documents.

Fee Type

Applicable Charges

Interest Rate

Minimal and competitive interest rates (depending on several factors, including location, net income, business stability, collaterals, existing monthly obligations, etc.)

Loan Amount

Up to INR 75 lakhs*

Loan Tenure

Up to 60 months*

Processing Fees

Up to 5% of the total loan amount + GST

Organisation Type

Proprietorship, Partnership, Private Limited, Closely held or unlisted companies, LLPs, Educational Institutes and Hospitals run by Trusts/Societies.

Business Loans Fees & Charges

Here’s a table of fees and charges for SMFG India Credit business loans to help you understand the same in detail:

Fee Type

Applicable Charges

Late Payment Charges

Up to 3% per month (36% per annum) on overdue amount calculated on a day-to-day basis payable from the relevant due date till the date of actual payment.

Collection of Cheque/Cash

(per collection)

NIL

Cheque/ECS Dishonoured Charges

(per dishonour of cheque/ECS per presentation)

Rs. 300 to 1000

Swap Charges - For any change in repayment instruments

(per instance)

INR 500

Loan Cancellation Charges

(loan cancelled before first EMI)

Rs. 1000 - 2500

No. of EMIs paid (Excluding Pre-EMI)

Foreclosure Charges

0 to 17 EMI(s) fully paid

7% of the Principal Outstanding

18 to 23 EMI(s) fully paid

5% of the Principal Outstanding

24 to 35 EMI(s) fully paid

3% of the Principal Outstanding

36 or more EMI(s) fully paid

2% of the Principal Outstanding**

*Terms and Conditions apply

Note: **No foreclosure charges to be levied on loan classified as Micro Finance Loans

Calculation of Business Loan Interest Rate

Understanding how the interest rate of a business loan is calculated can help you make smarter and more informed borrowing decisions. This rate is influenced by several factors such as credit score, the loan amount, business income, existing debts, and so on. In the next section, we’ll explore these factors in greater detail.

You can use a business loan EMI calculator to understand the impact of the interest rate on your monthly outgo – simply enter your desired loan amount, the loan tenure, and the estimated interest rate. You can also experiment with different interest rates, amounts, and tenures to understand how each variable affects your monthly EMIs.

Factors that Affect Business Loan Interest Rates

You must take a look at the following factors which affect the business loan interest rates:

  • Your Creditworthiness
    Creditworthiness and repayment history have one of the highest impacts on business loan interest rates. Higher credit scores demonstrate greater reliability and a history of on-time payments. This can lead to lower interest rates. A lower credit score can signal higher risk to lenders, which leads to higher interest rates. It is important to maintain a good credit score to secure favourable credit terms.
  • Business Revenue
    Lenders look at the business revenue to assess borrowers’ financial health and repayment capacity. The more consistent your revenue is, the more stable and profitable the business appears to be. Volatile revenues can make lenders uncertain about your ability to repay the loan, which can lead to higher business loan interest rates.
  • Loan Amount
    The amount you borrow also affects the business loan interest rates. Larger loans may secure lower rates, given the increased income potential for the lender, while smaller loans may incur higher rates. However, it is important to borrow only the amount you need to avoid overstraining your finances.
  • Repayment Tenure
    The duration of the loan greatly impacts interest rates on business loans. Longer tenures may offer lower rates, reducing the repayment pressure, while shorter terms may result in higher rates for quicker lender reimbursement.
  • Collateral
    Secured loans, backed by collateral, are perceived as lower risk, often resulting in a lower interest rate of a business loan. In case of default, the lender can recover the asset. Unsecured loans typically have higher interest rates due to the increased risk to the lender.
  • Business Reputation
    The overall reputation of your business can play a large role in determining the interest rate of a business loan. Businesses with a stronger market presence and a good reputation in their industry are generally seen as lower risk. This can come with more favourable business loan interest rates. However, newer businesses that do not have a pre-existing reputation may receive higher rates on business loans due to increased risk.
  • Existing Loans
    If you have multiple existing loans, leading to a higher debt-to-income ratio, lenders may perceive a greater risk of loan default. This can lead to higher business loan interest rates.
  • Existing Relationship With the Lender
    If you are an existing customer of a lending institution and have a strong repayment history, you have a good chance of getting preferential rates on business loans. It is advisable to get in touch with your lending institution to see if you can avail of lower business loan interest rates.

Tips for Availing Business Loans at the Lowest Possible Interest Rates

You can ensure getting a business loan minimum interest rate by following these tips: 

  1. Aim for a high credit score by monitoring and addressing discrepancies in your credit report.
  2. You must ensure consistent and punctual EMI payments to establish credibility and increase the likelihood of securing a business loan with a low-interest rate.
  3. You should develop a detailed and comprehensive business plan outlining goals and strategies to demonstrate commitment to business success and favourable loan terms.
  4. Enhance financial statements by focusing on turnover, projects, and overall stability to appeal to lenders for a lower interest rate.
  5. Thoroughly compare loan offerings, explore refinancing options, and stay informed about market rates for effective negotiation.

Why Wait? Boost Your Business Potential Now!

Take the next step in growing your enterprise with a business loan from SMFG India Credit. Whether it’s for expansion, purchasing new equipment, or managing day-to-day operations, our loans are tailored to suit your specific business needs. You can use our business loan EMI calculator to estimate your monthly repayments, and our business loan eligibility calculator to assess how much loan amount you may be eligible for. To help you prepare, we also provide a detailed list of the required business loan documents. Start your application today and move your business forward with confidence.

Get the Capital. Grow the Business – Learn How!

With the rustic flair of desi music and subtly infused humour, this video tells a story of a small retailer who was able to grow his small business with a loan. Watch now and enjoy!

Page also available inहिन्दी - Hindi

* Please note that loans are disbursed at the sole discretion of SMFG India Credit. Final approval, loan terms and disbursal process will be subject to SMFG India Credit's policy at the time of loan application. If you are an existing customer and wish to foreclose your loan, please note that foreclosure terms and charges will be applicable as per our policy at the time of loan foreclosure.

Know Your EMI Before You Borrow

Use our business loan EMI calculator to estimate the EMI of your loan.

* Please note that loans are disbursed at the sole discretion of SMFG India Credit. Final approval, loan terms and disbursal process will be subject to SMFG India Credit's policy at the time of loan application. If you are an existing customer and wish to foreclose your loan, please note that foreclosure terms and charges will be applicable as per our policy at the time of loan foreclosure.

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50,0005,00,00,000
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Months
12 Months48 Months

Your Calculated EMI*

 2,30,462

Disclaimer The above calculator with graph & below table provide an approximate calculation of the EMI ( Equ... Read More


FAQs

What is the processing fee for business loans?

The processing fee that you pay for a business loan is anywhere up to 5% of the total loan amount + GST. Here are a few of the additional charges for an SMFG India Credit business loan:

  1. INR 300 to 1,000 related to dishonouring of a cheque or ECS dishonouring.
  2. Swap charges for any change in repayment instruments (per instance) are INR 500.
  3. Loan cancellation charges can range from INR 1,000 to 2,500+GST.
  4. There are additional charges for payment default at the rate of up to 3% per month (36% per annum) on the overdue amount calculated on a day-to-day basis, payable from the relevant due date till the date of actual payment.

What is the current interest rate for business loans?

The interest rate of a business loan at SMFG India Credit is determined based on several factors like your credit profile, business turnover, loan amount, and so on. After reviewing your application and documents, we offer a personalised rate tailored to your financial profile and business requirements.

Is the business loan interest rate fixed or floating?

The interest rate of a business loan is fixed, meaning it remains constant throughout the loan tenure. Borrowers can plan their finances more accurately as the EMIs remain unchanged, providing stability in repayment.

What fees are included with the interest rate (APR)?

The APR (Annual Percentage Rate) may include processing fees and other applicable charges. Please refer to our Loan charges page for more details, or feel free to reach out to us.

Do business loan rates differ by loan type?

Interest rates can vary depending on factors such as the loan amount, repayment tenure, and your business’s financial profile. Each loan is tailored to fit your specific requirements and eligibility.

Does my business credit score affect the interest rate?

Yes. A higher credit score can help you secure a more competitive interest rate, while a lower score may result in higher rates or stricter repayment terms.

Do startups or new businesses get higher interest rates?

Depending on lender policies, startups or newly established businesses may be offered higher interest rates due to limited credit history or higher perceived risk. Please note that to qualify for an SMFG India Credit business loan, your enterprise should have been operating for at least 3 years, with a record of stable income and profits for the last 2 years.

What loan term should I choose to get the best interest rate?

Shorter loan tenures often come with lower interest rates but higher monthly EMIs. The ideal tenure depends on your business’s cash flow, repayment ability, and long-term financial planning. Our team can help you find the most suitable repayment tenure.

Can I negotiate the interest rate on my business loan?

Yes, interest rates may be negotiable based on your credit profile, business performance, and loan amount. Our team will work to offer the most competitive rate suitable for your financials.

What are the factors that affect my business loan interest rate?

Several factors affect the business loan interest rate, including your good credit score, the business's financial health, the loan amount, the loan tenure, the market conditions, and the type of loan.

How can I calculate my business loan interest?

To calculate your business loan interest, you can use the formula: Interest Amount = (Principal Amount x Interest Rate x Loan Tenure) / 100. Alternatively, you can use an online business loan EMI calculator provided by SMFG India Credit.

What does bounce charge mean?

A bounce charge is a penalty applied if your EMI payment fails due to insufficient funds or transaction issues. It’s important to maintain sufficient balance before the due date.

What is the minimum and maximum business loan tenor that can be given?

The minimum business loan tenor you can get is 12 months. And the maximum business loan tenor you can get is 60 months. SMFG India Credit’s secured business loans (which are usually secured against property) have a repayment tenure between 12 to 180 months.

What are the pre-closure/foreclosure charges for business loans?

There is a foreclosure charge of 7% if you foreclose the loan between 7-17 fully paid EMIs, 5% charge between 18 and 23 fully paid EMIs, and 3% charge between 24 and 35 fully paid EMIs.

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