Do you want to take your business to new heights but don’t have property or assets to provide collateral? Don’t worry! Today I bring you a guide on how to get a business loan without collateral in 2025. Whether you are starting a startup or want to grow your existing business, these tips will prove to be quite useful for you. So, let’s get straight to the point and know how you can get a loan of lakhs without pledging anything!
What is a business loan without collateral?
A collateral-free business loan is a loan in which you do not need to pledge your property, gold, or any asset to the bank. This loan is available based on your business performance, credit score, and cash flow. In 2025, many government schemes and private lenders like HDFC Bank and DMI Finance are offering collateral-free loans in India, which are a boon for small businesses and startups.
Why choose collateral-free loans?
- No risk: Your property or assets remain safe.
- Fast approval: Loan can be availed within 24-72 hours with fewer documents.
- Flexible use: Can be used for purchasing inventory, marketing, or working capital.
- Government support: Schemes like MUDRA and CGTMSE offer loans without guarantee.
Eligibility for loan without guarantee
Some basic criteria have to be fulfilled to get a loan. These may vary slightly for each lender, but generally they are:
| Criteria | Description |
|---|---|
| Credit score | 700+ (some lenders like Moneyview also accept 650+) |
| Business age | Minimum 2 years (1 year is sufficient in some schemes) |
| Turnover | Minimum ₹40 lakh per annum (HDFC Bank) or ₹3 lakh (DMI Finance) |
| Income tax returns | ITR of last 1-2 years |
| Age | 21-65 years (till loan maturity) |
Documents required for unsecured loan
Keep these documents ready before applying for a loan:
- KYC: Aadhaar, PAN card, passport.
- Business proof: GST registration, trade license.
- Financial documents: Bank statements of last 6-12 months, ITR of 1-2 years.
- Business plan: Especially for startups, you need to have a market analysis and growth plan.
Lenders like Hero FinCorp offer fast processing with fewer documents, saving you time.
Top options for collateral-free loans
1. Government schemes
- MUDRA loans: Pradhan Mantri MUDRA Yojana offers loans ranging from ₹50,000 to ₹10 lakh. There are three categories:
- Shishu: Up to ₹50,000.
- Kishor: ₹50,000 to ₹5 lakh.
- Tarun: ₹5 lakh to ₹10 lakh.
- CGTMSE: Credit Guarantee Fund Trust offers loans up to ₹5-10 lakh to MSMEs, with 75-80% guarantee cover.
2. Private lenders and NBFCs
- HDFC Bank: Loans up to ₹75 lakh, with tenures of 12-48 months.
- DMI Finance: Digital loans up to ₹25 lakh, disbursal within 24-72 hours.
- Bajaj Finance: Loans up to ₹80 lakh, flexi tenure (1-8 years).
- IIFL Finance: Approval within 48 hours and minimal documentation.
Steps to avail a loan
- Choose a lender: Choose the best option for your business from government schemes (like MUDRA) or NBFCs (like Flexiloans).
- Check eligibility: Check your eligibility with online tools.
- Get documents ready: Keep KYC, business proofs, and financial statements scanned.
- Apply online: Fill out the form on the lender’s website or app.
- Accept the loan offer: Sign the loan agreement after approval, and funds will be in your account within 2-7 days.
Things to keep in mind before taking a loan
- Maintain a credit score: A 700+ score will get you a lower interest rate. Pay credit card bills and EMIs on time.
- Calculate EMI: Estimate your monthly payment with tools like Bajaj Finance EMI Calculator.
- Business plan: Create a solid plan that clearly outlines your revenue, customer base, and loan usage.
- Compare interest rates: Interest rates start at 7.5% for government schemes, while NBFCs can range between 16-24%.
Boost your business
Whether you’re looking to open a new store, expand inventory, or invest in marketing, a collateral-free loan is perfect for you. Lenders like Tata Capital and Clix Capital offer flexible financing for your business. So don’t delay, apply today and make your dreams a reality!
FAQs
What is the minimum credit score required for an unsecured loan?
Usually a credit score of 700+ is required, but some lenders like Moneyview offer loans even at 650+.
Can startups get collateral-free loans?
Yes, if your business is 2 years old and you have a good credit score. MUDRA and CGTMSE schemes are best for startups.
How long does it take to get the loan?
NBFCs like DMI Finance and IIFL can take 24-72 hours, while government schemes can take 7-10 days.
Is the interest rate higher for collateral-free loans?
Yes, it can be higher than secured loans (16-24%), but starts at 7.5% in government schemes.
Can I upload documents online?
Yes, most lenders like Flexiloans and Hero FinCorp offer online document upload facility.
