Business Term Loan — MSME Rates, CGTMSE & Eligibility

A business owner planning a one-time capital investment

Who it suits

Business Term Loan, in one paragraph.

A business making a one-time investment with a multi-year payback: a new unit, a fit-out, an acquisition, a large single order. The EMI is fixed and the loan has a closing date, which makes it easy to plan around — and expensive if what you actually had was a recurring gap.

MSMEs with 2–3 years of vintage and filed financials.
Businesses that can articulate exactly what the money buys.
Eligible units seeking collateral-free credit under CGTMSE.
Not a fit for seasonal inventory or receivables gaps.

Key parameters

The numbers that shape the offer.

11–20% Indicative rate p.a., reducing balance

₹1L–₹5Cr Typical sanctioned range

1–7 yrs Tenure, set to the payback period

Indicative only, sourced from public lender information as of July 2026. Your actual rate, tenure and sanctioned amount are set by the lender based on your profile.

Eligibility & documents

What you need before you apply.

Most rejections at this stage are paperwork failures, not credit failures.

Eligibility criteria

Business vintage of 2–3 years; some NBFCs accept 12 months.
Annual turnover generally above ₹40 lakh, lower with NBFCs.
Promoter bureau score of 700+ — personal credit is read too.
Debt service coverage ratio around 1.25× or better.
Udyam registration for MSME scheme eligibility.

Documents required

PAN and Aadhaar of proprietors, partners or directors.
Constitution documents — deed, MOA/AOA or LLP agreement.
Udyam, GST and shop or trade licence.
2–3 years of ITRs with audited balance sheet and P&L.
12 months of current-account statements and GST returns.
A note on the proposed use of funds and expected payback.

EMI calculator

See the monthly number before you commit.

Move the sliders. Nothing is submitted; this runs entirely in your browser.

Loan amount ₹

₹1 lakh to ₹5 crore

Rate of interest (p.a.) %

9% to 26%. Secured facilities price materially lower

Loan tenure Yr

1 to 7 years

Monthly EMI ₹0

Principal: ₹0
Total interest: ₹0
Total payable: ₹0

Indicative only, on a reducing-balance basis. Excludes processing fees, insurance and statutory charges. KredExperts does not set rates; final terms come from the lender.

Business Term Loan FAQs

The questions that come up first.

Term loan or working capital?

Ask whether the need repeats. One-time and knowable, with a multi-year payback, is a term loan. A gap that reopens every cycle is working capital. Funding a recurring gap with a term loan means paying interest on idle money for years — the most common and costly MSME financing mistake.

What is CGTMSE and can it make this collateral-free?

The Credit Guarantee Fund Trust for Micro and Small Enterprises guarantees a share of the lender's exposure, letting eligible MSMEs borrow without pledging property. The guarantee ceiling for eligible credit currently extends to ₹5 crore. A guarantee fee applies and is charged to the borrower. Eligibility is decided by the lender and the trust, not by us.

Does my personal credit score matter?

Substantially — especially for proprietorships and small partnerships, where the lender reads the promoter's bureau report alongside the business's own conduct. A weak personal score sinks otherwise healthy business files routinely.

Is the interest tax-deductible?

Interest on borrowing used for business purposes is generally allowable as a business expense under Section 37(1) of the Income Tax Act; principal repayment is not. General information, not tax advice — confirm the treatment with your CA.

How long does sanction take?

Typically 1–3 weeks for an unsecured or CGTMSE-backed facility, and longer where property is pledged and needs legal and valuation checks. Incomplete financials are the usual cause of delay, not the credit decision itself.

Working Capital Machinery Loan All business loans All FAQs

One lump sum, one fixed schedule, one known end date.