Getting Instant Business Loan in India


The SME and MSME sectors are the mainstays of the Indian economy, contributing almost 50% of the GDP. It is this sector which is in prime need of funds which can be translated at times through Instant Business Loan to help the enterprise operate smoothly, expand, and diversify.

Realizing its importance, the Government of India has formulated many schemes, and the banks have designed products eminently suited to their needs. The arrival of FinTech lenders has rewritten the contours of lending to this segment with innovative products which can also be termed as a quick business loan.

What is an Instant Business Loan?

The business loan is the lifeline of all business enterprises requires to go through processing for approval of funds, which entails not only stringent norms but also hefty paperwork for its approval often consuming days.  As the name suggests, Instant Business Loan is just the kind of loan which is processed in double quick time, approved, and disbursed, mostly through a digital platform obviating paperwork altogether. FinTechs use this method to attract small business people to meet immediate fund requirement.

Types of Instant Business Loan:

Any business loan is availed to meet certain specific purposes which can vary according to the needs of the business entity. So is with the Instant Business Loan. The borrowed fund can be put to a host of uses by the entrepreneur in harmony with business requirements. Some of the significant Instant Business Loan products are:

  • Working Capital Loan: It mainly helps in maintaining liquidity by streamlining adequate cash flow for day-to-day expenses. These are ideally short-term loans repayable in 3 to 6 months.
  • Line of Credit: This is an overdraft facility which can be handy in a host of purposes. The best feature of this advance is the flexibility of withdrawal and repayment up to the defined drawing limit. It reduces the interest burden substantially.
  • Term Loan: This suits expansion and diversification program of the business. Since fund disbursed in this loan is used to grow business, the repayment tenor is also longer.
  • Machinery Loan: It solves fund need for the purchase of machinery and access to new technology. Such loans are approved instantly due to the need for little scrutiny.
  • Invoice Financing: It is another form of Quick Business Loan where funds are advanced instantly based on the value of invoice receivables. This ensures liquidity to the borrower, and the advance is repaid on the retirement of the invoice.

Benefits of Instant Business Loan:

Instant Business Loan can be used for the following emergent purposes so that optimal use of the fund is made:

  • Manage cash flow and increase liquidity.
  • Lease or rent larger business premises.
  • Expand business by scaling up operations or opening facilities at new locations.
  • Purchase or upgrade machinery and equipment. Also, absorb new technology tools for the business.
  • Improve inventory management so that the business processes can be run without hindrance.
  • Cater for a seasonal surge in business with additional provisions wherever required.
  • Look for opportunities to make bulk purchases to ease the demand and supply cycle.

Eligibility Criteria for Instant Business Loan:

The criteria can vary from lender to lender, but they are still liberal in terms of a business loan from FinTech. The generalized norms for eligibility are:

  • The borrower should be over 21 years of age.
  • The age of business should be a minimum of 6 months, while some lenders insist on a minimum of 12 months.
  • The minimum monthly turnover should be more than Rs.2L. Some Fintechs go for quarterly turnover also.

Documents required for Instant Business Loan:

The documentation for Instant Business Loan is liberal with Fintech as they rely upon business analytics and real-time financial data for determining creditworthiness.  The general; necessary documents required are:

  • KYC documents for the ID of the promoter and business including PAN card.
  • Aadhaar card of the promoter.
  • Residential address proof of the promoter.
  • Address proof of the business.
  • Registration and other compliances of the business.
  • Bank account statement for the previous six months.

Process for availing Instant Business Loan:

The general application process with FinTechs is online. Some provide instant loan facilities in a matter of minutes through their mobile applications that can be downloaded from Google Play Store. While some accomplish the entire cycle online, some complete the process through their representative, who assists in formalities. Once the documentation and processing are over, the approved loan amount is transferred directly to the business account. The critical factor of the quick business loan process is that the entire cycle is deemed to be paperless.

Charges apply on Instant Business loan:

Important features impacting cost of fund
Rate of Interest Flat 2% per month
Processing Fee 1% to 25 of the loan amount plus applicable GST
Pre-closure Fee Normally it is waived
Loan tenor Usually 12months
Amount Stricter norms are applied
Security Collateral free unsecured loan.
Repayment EMI or fortnightly


Tips for availing Instant Business Loan:

Before proceeding for application for an Instant Business Loan, it is imperative to follow a checklist, so the borrower is on firm ground. The following steps are worth noting:

  • Check for loan eligibility: Use the EMI calculator on the portal or the App. This will give an insight if one matches with the eligibility norms of the prospective lender. The process further indicates the financial impact and the projected cost of fund.
  • Assess the precise loan requirement: It makes sense to be prudent in deciding upon the quantum of loan as any Instant Business Loan will be costlier than other business loans with a shorter repayment period.
  • Check for the Credit score: It is an essential determinant for the rate of applicable interest. This will have a direct impact on the cost of fund.
  • Be in readiness with the documents: The step post check for eligibility is to arrange for all the documents and be in preparation for upload.

Bottom Line:

Instant Business Loan has been a great boon for small businesses in our country. More so with the advent of Fintechs who have introduced a fresh approach in small business lending norms. With Instant Business Loan at the right time, the essential infusion of emergency funds can see the business grow exponentially.