BUSINESS LOAN INTEREST RATE

The business loan interest rate is the cost you pay to borrow money for your business. It’s a percentage charged by the lender on the loan amount, calculated over the business loan tenure. This rate determines how much you’ll repay in addition to the principal. In simple terms, it's the fee you pay to use the lender’s money for your business needs.

The business loan interest rate is calculated based on several key factors, like your credit score, repayment history, annual turnover, business stability, and the chosen business loan tenure. Lenders also consider the type of loan, the aim of funding, and the documents required for business loan approval. For example, a business with a consistent cash flow, strong financials, and a strong credit score above may be offered better business loan rates than a newly established venture with limited credit history. Platforms like the Kissht app can help streamline your loan application process by letting you check eligibility and submit the necessary details in just a few steps.

Yes, your business credit score plays a crucial role in determining the business loan interest rate. Lenders use it to assess your repayment history and overall financial health. A strong credit score indicates lower risk, which can help you qualify for a low interest business loan, while a lower score may result in higher rates or limited approval

Lenders typically require a set of standard documents for business loan approval to assess your eligibility and financial standing.These include: • KYC documents: Aadhaar Card and PAN Card of the business owner. • Business proof: GST Registration Certificate, Business Incorporation Certificate, and income details. • Financial documents: Bank statements (last six months) and Income Tax Returns (if applicable). Having these documents in order speeds up the process of securing a business loan. You can easily apply through the Kissht app, which guides you through the documentation process step by step.

Several factors impact business loan interest rates, including: • Credit score: A strong score improves your chances of getting a low interest business loan. • Business stability: Lenders assess how long and how steadily your business has been operating • Financial health: Income, profit margins, and cash flow impact the rate offered. • Loan amount and tenure: Higher amounts or longer business loan tenure may affect the rate. • Documentation: Incomplete or inaccurate documents required for a business loan can impact approval and terms. • Type of business: Industry risk and business model may also influence the final rate.