Fullerton India Credit Co. Ltd. is Now SMFG India Credit Co. Ltd.

Be it expanding your operations, investing in equipment, need for working capital or even hiring staff, every stage of the business needs access to funds. 

A business loan is one of the most popular financing options that are available to business owners in India. It is an accessible avenue for instant funds that can be used to meet a variety of business needs. Even though there is an interest component attached to the business loan, the benefits far outweigh the cons. 

Different Types of Business Loans Available:

Before you take out a business loan, you must invest some time in planning to avoid any future financial mismanagement. 

Common types of business loans include: 

Business owners can avail tax benefits on a business loan, depending on the type of loan they take. This helps to lower their overall tax liability that mitigates a part of your fund outflow that is paid as the interest rate on business loan. However, you must be aware that most unsecured business loans do not have any tax benefits at all.

Tax Benefits on Business Loan in India

There are several myths regarding benefits to business owners on business loans. These are:

  1. Interest Paid on Unsecured Business Loans are Tax-Deductible:
    This is one of the most prevalent myths regarding business loan tax benefits. Do note that this is not true for unsecured business loans.
  2. Principal Amount on Business Loan is not Tax-Deductible:
    This one is actually true, for almost all types of business loans. Any business loan comprises two components – the principal amount and the interest. Whilst the interest element may be tax deductible only in the case of secured business loans taken for the purpose of purchasing immovable assets such as commercial property or land, business owners cannot claim any tax benefits on the principal amount paid to the lender on the business loan. 
    This does not fall under the purview of business expenditures. Conversely, there is no requirement to pay tax on the principal amount borrowed either. Tax liability is only applicable to the net income that is earned by the business owner. 

Tax-Deductible Business Expenses:

There are various expenses incurred by the business owner in order to operate and maintain the enterprise on a daily basis. These expenditures can be classified as business expenses. Any expenditures that are used by the business owner to generate income for the business also fall under the purview of business expenses.

However, not all expenditures on the business are classified as revenue-generating activities. This list includes the following: 

  • Expenses incurred on salary and wage payment to the staff and employees
  • The cost of rent cost for office premises
  • Expenses incurred to lease out a location
  • Office supplies like stationery, daily maintenance costs, etc.
  • Expenditures made on the insurance of the business and premises
  • Gifts, meals and entertainment expenses
  • Bonus paid to the employees.

Eligibility for Availing a Business Loan:

Any business owner can apply for a business loan at SMFG India Credit as long as they fulfil the minimum eligibility criteria. This includes:

  • Applicant must be a minimum of 22 years of age and not more than 65 years at the time of submitting the business loan application
  • Applicant must be either self-employed or operate a proprietorship, private limited companies, and partnership firms 
  • Applicant should have been engaged in the current business for at least three years with a total of five years of business experience
  • Business enterprises must have a minimum turnover of Rs. 10 Lakhs
  • Business enterprises must be making profits for the past two years
  • Business enterprises must have a Minimum Annual Income (ITR) of Rs. 2 Lakhs per year

You can use the Business Loan EMI Calculator to determine the monthly installment amount applicable to your desired loan amount. This tool is available on the SMFG India Credit website. 

What are the Documents Required for a Business Loan?

You have the option to upload soft copies of the business loan documents. Generally, you will need to share the following: 

  1. Recent photograph
  2. Valid Identity Proof such as PAN card, Driving License
  3. Valid Address Proof such as Electricity bill, Passport
  4. Bank statements
  5. GST or ITR
  6. Income proof
  7. Proof of Business existence such as Certificate of Incorporation, etc.
  8. Business continuity plan

How to Apply for a Business Loan?

Just click on the “Apply now” button on this page and select “Business loans”. You will find a loan application form that needs to be filled up along with OTP verification of mobile number. Fill up the same and submit. You will receive a call from our representative to take your application further. If you wish to know more about business loan interest rates, please click here.

On submission of the application form, a reference number will be automatically generated. Use this in your future communications with SMFG India Credit. Generally, it takes about  72 hours* for the loan to be verified, sanctioned, and disbursed to the applicant’s registered bank account, as long as the applicant matches all the business loan eligibility criteria, and has the requisite documents in order.

Alternatively, you can even walk into any of our SMFG India Credit branches. You can even call on our toll-free number (1800 103 6001) or send an email to  

* Please note that this article is for your knowledge only. Loans are disbursed at the sole discretion of SMFG India Credit. Final approval, loan terms, disbursal process, foreclosure charges and foreclosure process will be subject to SMFG India Credit's policy at the time of loan application. If you wish to know more about our products and services, please contact us