Knowledge of the significance of credit scores and why these matter is the first step towards getting a business loan. This may be you’re a new entrepreneur seeking to grow your company or a startup owner in need of capital. Your credit score is a numerical indication of your credibility based on aspects like payment history, debt utilization, your past credit history, and a lot more. It also offers financial institutions an overview.
In India, credit ratings fall between 300 and 900; higher scores denote greater creditworthiness. A credit score of 650 or above is usually preferred by lenders when evaluating applications for business loans. Thus, it’s critical to keep your credit score high in order to improve your chances of having a loan authorized on terms that suit you.
Top Business Loan Highlights 2024
| Loan Provider | R.O.I | Processing Fees | Loan Amount | Cibil Score |
| HDFC Bank Business Loan | 16% – 20% (Reducing Per Annum) | 1% – 2% | 1.00 Lacs – 10.00 Lacs | 700 |
| Poonawala Finance Business Loan | 18.75% – 20% (Reducing Per Annum) | 2% – 4% | 2.00 Lacs – 10.00 Lacs | 700 |
| Bajaj Finserv Business Loan | 21% – 24% (Reducing Per Annum) | 2% – 3% | 1.50 Lacs – 30.00 Lacs | 720 |
| Tata Capital Business Loan | 22% – 25% (Reducing Per Annum) | 3% – 4% | 1.00 Lacs – 15.00 Lacs | 675 |
| Lendingkart Business Loan | 21% – 40% (Reducing Per Annum) | 3% – 4% | 1.00 Lacs – 1.00 cr | 600 |
| Incred Business Loan | 16% – 33% (Reducing Per Annum) | 2% – 5% | 50.00 k – 10.00 Lacs | 650 |
| Flexi Business Loan | 18% – 30% (Reducing Per Annum) | 3% – 4% | 1.00 Lacs – 25.00 Lacs | 700 |
| Indifi Unsecured Business Loan | 18% – 30% (Reducing Per Annum) | 3% – 4% | 1.00 Lacs – 30.00 Lacs | 700 |
| PaySense Business Loan | 18% – 22% (Reducing Per Annum) | 2% – 6% | 50.00 k – 10.00 Lacs | 700 |
| Ayefin Business Loan | 28% – 29.5% (Reducing Per Annum) | 2.5% – 3% | 5.00 k – 3.50 Lacs | 650 |
| Faircent Eazzy Loan | 25% – 30% (Reducing Per Annum) | 7% – 8% | 50.00 k – 1.50 Lacs | 630 |
| Money View Business Loan | 16% – 36% (Reducing Per Annum) | 2% – 5% | 5.00 k – 5.00 Lacs | 650 |
| Hero Fincorp Business Loan | 19% – 27% (Reducing Per Annum) | 2% – 4% | 1.00 Lacs – 5.00 Lacs | 630 |
| Faircent Business Loan | 25% – 30% (Reducing Per Annum) | 7% – 9% | 50.00 k – 10.00 Lacs | 550 |
| Ambit Finance Business Loan | 20% – 28% (Reducing Per Annum) | 3% – 3.5% | 2.00 Lacs – 50.00 Lacs | 675 |
| Choice Finserv Business Loan | 22% – 26% (Reducing Per Annum) | 2% – 3% | 1.00 Lacs – 7.50 Lacs | 700 |
| Get Vantage Business Loan | 16% – 20% (Reducing Per Annum) | 5% – 8% | 5.00 Lacs – 10.00 cr | 700 |
| Recur Club Business Loan | 16% – 20% (Reducing Per Annum) | 2% – 3% | 10.00 Lacs – 10.00 cr | 650 |
| MAXEMO Business Loan | 22% – 30% (Reducing Per Annum) | 4% – 8% | 5.00 Lacs – 30.00 Lacs | 650 |
| ARKA Business Loan | 18% – 20% (Reducing Per Annum) | 2% – 3% | 1.00 Lacs – 30.00 Lacs | 700 |
| FINAGG Supply Chain Finance | 18% – 20% (Reducing Per Annum) | 2% – 3% | 1.00 Lacs – 50.00 Lacs | 700 |
| Stashfin Business Loan | 2.45% – 4% (Fixed Monthly) | 1% – 1% | 10.00 k – 5.00 Lacs | 725 |
| HDFC Bank Business Loan | 16% – 18% (Reducing Per Annum) | 1% – 2% | 1.00 Lacs – 75.00 Lacs | 700 |
| ICICI Bank Business Loan | 16% – 18.5% (Reducing Per Annum) | 1.5% – 2% | 10.00 Lacs – 1.00 cr | 700 |
| Yes Bank Business Loan | 16.5% – 19.5% (Reducing Per Annum) | 2.5% – 4% | 5.00 Lacs – 50.00 Lacs | 650 |
| Induslnd Bank Business Loan | 16% – 20% (Reducing Per Annum) | 2% – 3% | 10.00 Lacs – 50.00 Lacs | 680 |
| AXIS Bank Business Loan | 16% – 18% (Reducing Per Annum) | 1.75% – 3% | 5.00 Lacs – 75.00 Lacs | 700 |
| Kotak Mahindra Business Loan | 16% – 18% (Reducing Per Annum) | 2% – 3% | 5.00 Lacs – 2.00 cr | 630 |
| Deutsche Bank Business Loan | 16% – 20% (Reducing Per Annum) | 2% – 3% | 15.00 Lacs – 1.00 cr | 680 |
| IDFC Bank Business Loan | 16% – 19% (Reducing Per Annum) | 1.5% – 3% | 10.00 Lacs – 75.00 Lacs | 700 |
| Standard Chartered Business Loan | 16.5% – 18% (Reducing Per Annum) | 2% – 3% | 10.00 Lacs – 1.00 cr | 720 |
| Unity Bank Business Loan | 16.5% – 22% (Reducing Per Annum) | 2% – 3% | 10.00 Lacs – 50.00 Lacs | 700 |
| Bajaj Finserv Business Loan | 17% – 20% (Reducing Per Annum) | 1.75% – 3% | 5.00 Lacs – 50.00 Lacs | 700 |
| Aditya Birla Business Loan | 15.75% – 20% (Reducing Per Annum) | 2% – 3% | 5.00 Lacs – 50.00 Lacs | 700 |
| Aditya Birla Business Loan (Small) | 23% – 29% (Reducing Per Annum) | 2.5% – 3.75% | 1.00 Lacs – 10.00 Lacs | 700 |
| Tata Capital Business Loan | 17% – 20% (Reducing Per Annum) | 2% – 3% | 7.50 Lacs – 50.00 Lacs | 700 |
| Hero Fincorp Business Loan | 18% – 21% (Reducing Per Annum) | 2% – 3% | 7.00 Lacs – 40.00 Lacs | 700 |
| Piramal Finance Business Loan | 16.49% – 25% (Reducing Per Annum) | 2.75% – 4% | 1.00 Lacs |
How to Raise Your Credit Score: A Few Crucial Actions
Now that we know how important credit scores are, let’s look at some doable actions you may take to raise your score:
- Never Neglect to Make a Payment
How can credit scores be raised? Keeping your credit score high requires timely bill payment. Your business’s credit score as well as your personal credit score may suffer from late payments. Make sure to pay your EMIs, credit card bills, and other bills on time.
- Don’t Use a Lot of Credit
The percentage of the credit you have available that you are now using is known as credit utilization. To demonstrate appropriate credit management, you should always maintain your credit use below 30%. For instance, if your credit limit is₹1 lakh, attempt to keep your balance under₹30,000.
- Take Out Loans from a Variety of Lenders
Your credit score can be improved by having a variety of credit accounts. In order to assess your capacity to manage various forms of debt, lenders want a combination of installment credit (such as SME loans) and revolving credit (such as business credit cards). Sustaining a steady payment record across multiple credit categories demonstrates your credibility.
- Regularly File Your GST and Other Taxes
When determining your creditworthiness, lenders also take into account your timely submission of GST and other taxes. It is easier for financial institutions to assess loan applications when you file your taxes on a regular basis since they will obtain reliable information about the sales and revenues of your company. It also guarantees that your financial transactions are transparent.
- Minimize Hard Inquiries
When prospective employers or financial organizations look up your credit report, they make a hard inquiry. While a few hard queries here and there might not have a big effect on your score, several hard inquiries in a short amount of time may cause anxiety for lenders. They can see this as proof that you are having financial troubles. Keep your score from being negatively impacted by needless, harsh queries.
- Check out Your Business’s Credit Report
Keep a regular eye out for any mistakes or inconsistencies in your company’s credit report. Minor errors might have an impact on the credit rating of your business. Periodically examining the report will allow you to spot any errors and take quick corrective action.
Bottom Line
You now understand how to raise your credit score by implementing the recommendations provided in this guide. Never forget how important your credit score is. Pay your bills on time, limit hard queries, diversify your credit alternatives, file taxes on a regular basis, and keep an eye on your company’s credit record. To reach your financial objectives, you can take out loans through Refer Loan’s platform.