Business Loan Calculator
Calculate business loan EMI and assess eligibility using DSCR analysis. Plan your loan based on revenue, expenses, and repayment capacity with our free business loan calculator.
About This Calculator
Business loans help entrepreneurs fund their operations, expansion, or equipment purchases. Our calculator evaluates your business's financial health and determines loan eligibility based on debt service coverage ratio.
The calculator considers your business revenue, expenses, and existing debt obligations to assess your ability to service additional debt and provides eligibility recommendations.
Business Loan Types:
- Term Loans: Fixed amount for specific business needs
- Working Capital: Short-term funding for operations
- Equipment Finance: Loans for machinery and equipment
- Trade Finance: Import/export financing
Debt Service Coverage Ratio (DSCR):
- Formula: Net Operating Income ÷ Total Debt Service
- Excellent: DSCR >= 1.5 (Strong repayment capacity)
- Good: DSCR 1.25-1.5 (Adequate repayment capacity)
- Fair: DSCR 1.0-1.25 (Marginal repayment capacity)
- Poor: DSCR < 1.0 (Insufficient repayment capacity)
Business Loan Eligibility:
- Business Vintage: Minimum 2-3 years of operations
- Annual Turnover: Minimum ₹40 lakh for most lenders
- Profitability: Consistent profits for 2-3 years
- Credit Score: Business and personal credit history
- Financial Statements: Audited financials required
Interest Rates by Business Type:
- Manufacturing: 10-14% (lower risk, asset-backed)
- Trading: 12-16% (moderate risk, inventory-based)
- Services: 14-18% (higher risk, no physical assets)
- Retail: 12-15% (moderate risk, location-dependent)
Features:
- Calculate business loan EMI and total cost
- DSCR-based eligibility assessment
- Business type-specific analysis
- Visual outstanding balance tracking
- Financial health evaluation
Frequently Asked Questions
What is a business loan?
A business loan is a financing option provided by banks and financial institutions to help businesses meet their financial needs. It can be used for working capital, equipment purchase, expansion, inventory management, or other business purposes. The loan amount, interest rate, and tenure depend on the business's financial health, credit history, and cash flow.
Who is eligible for a business loan?
Business loan eligibility typically requires: 1) Business vintage of 2-3 years minimum, 2) Consistent profitability, 3) Annual turnover of at least ₹40-50 lakh, 4) Good credit score (700+), 5) Proper financial documentation, 6) GST registration in most cases. Startups may face stricter criteria and may need to explore specialized startup loan schemes.
What is DSCR in business loans?
DSCR (Debt Service Coverage Ratio) measures a business's ability to repay debt. It's calculated as Net Operating Income divided by Total Debt Service. DSCR of 1.25 or higher is considered good, indicating the business generates sufficient income to cover debt obligations. Banks use DSCR as a key metric to assess loan eligibility and determine interest rates.
What is the interest rate on business loans?
Business loan interest rates in India range from 10% to 18% per annum depending on the business type and credit profile. Manufacturing businesses get lower rates (10-14%), while service businesses may pay higher rates (14-18%). Factors affecting rates include business vintage, turnover, profitability, credit score, and collateral offered.
What documents are required for business loan?
Common documents include: Business registration/GST certificate, Audited financial statements (2-3 years), Income Tax Returns, Bank statements (6-12 months), Business plan or project report, KYC documents of promoters, Collateral documents (if applicable), and GST returns. Additional documents may be required based on loan type and lender.
Can I get a business loan without collateral?
Yes, unsecured business loans are available up to certain limits, typically ₹10-50 lakh depending on the lender and business profile. However, unsecured loans have higher interest rates (14-18%). Government schemes like CGTMSE (Credit Guarantee Fund) also provide collateral-free loans up to ₹5 crore for MSMEs with guarantee coverage.
How long does it take to get a business loan approved?
Business loan approval typically takes 7-15 working days for existing banking relationships, and 15-30 days for new applicants. The timeline depends on document completeness, business profile, loan amount, and lender's internal processes. Pre-approved loans for existing customers can be disbursed in 2-3 days.
What is the maximum business loan amount?
Business loan amounts vary widely based on business size and needs. Small business loans range from ₹5 lakh to ₹2 crore. Larger enterprises can get loans of ₹10 crore or more based on turnover and collateral. Government schemes offer loans from ₹10 lakh to ₹5 crore for MSMEs under various programs.
Can I prepay my business loan?
Yes, business loans can typically be prepaid, but lenders may charge prepayment penalties. Charges usually range from 2-4% of the outstanding principal if prepaid within the first 1-2 years. Some loans waive prepayment charges after a certain period. Check your loan agreement for specific terms. Prepayment reduces interest burden significantly.
What are government schemes for business loans?
Major government schemes include: Mudra Loan (up to ₹10 lakh for micro enterprises), CGTMSE (collateral-free loans up to ₹5 crore), SIDBI loans for MSMEs, Startup India schemes, and PMEGP for entrepreneurs. These schemes often offer lower interest rates and easier terms compared to regular commercial loans.