NBFC Business Loan – Is it Beneficial to Get A Business Loan from NBFC in 2025

Running a business in India means you’ll need funding at some point. Whether it’s expanding operations, buying inventory, or managing cash flow, money is what keeps the wheels turning. Now here’s the question: should you get a business loan from a bank or an NBFC?

Let’s cut to the chase. NBFC business loans are becoming the go-to choice for many business owners, and there are solid reasons why. Non-Banking Financial Companies (NBFCs) offer relaxed lending norms, faster approvals, and flexible loan options that traditional banks often can’t match. If you’ve been rejected by banks or need quick funding, an NBFC loan might be exactly what you need.

In this guide, we’ll break down everything about NBFC business loans—from eligibility and documents to why they’re often better than bank loans. No fluff, just practical information you can use.

What is an NBFC Business Loan?

An NBFC business loan is funding provided by Non-Banking Financial Companies registered with the Reserve Bank of India (RBI). Unlike banks, NBFCs don’t accept demand deposits but they do lend money to businesses and individuals.

NBFCs like CreditCares specialize in understanding business needs better than traditional banks. They look beyond credit scores and focus on your business potential, cash flow, and repayment capacity.

Here’s what matters: NBFCs are more flexible, process applications faster, and have higher approval rates compared to banks. That’s why more Indian businesses are turning to NBFC business loans for their funding needs.

Why Choose an NBFC Business Loan? Top Benefits

1. Relaxed Lending Norms from NBFCs

Banks have strict lending criteria. One small issue with your CIBIL score or financial statements, and your application gets rejected.

NBFCs take a different approach. They understand that business owners sometimes face temporary setbacks. Even if your credit score isn’t perfect or you don’t have extensive financial records, NBFCs are willing to evaluate your business loan eligibility based on:

• Current business turnover
• Cash flow patterns
• Industry type and growth potential
• Collateral or security offered

This means you have a better chance of getting approved even if banks have turned you down. For small business owners and MSMEs, this flexibility is a game-changer.

2. Pre-Approved Limits

One of the biggest advantages of NBFC business loans is pre-approved credit limits. Once you establish a relationship with an NBFC like CreditCares, they may offer you a pre-approved business loan limit.

This means:

• No need to apply from scratch every time
• Instant access to funds when you need them
• Lower documentation for repeat loans
• Better interest rates for loyal customers

Think of it as having a financial safety net. When an urgent business opportunity comes up or you need working capital, you can access funds within hours instead of weeks.

3. Flexible Business Loan Options

NBFCs understand that every business is different. That’s why they offer multiple loan products tailored to specific needs:

Unsecured Business Loans: No collateral required, quick disbursal for working capital needs.

Secured Business Loans: Lower interest rates if you can provide collateral like property or equipment.

Loan Against Property (LAP): Use your commercial or residential property to get larger loan amounts at competitive rates. LAP from CreditCares is ideal for business expansion.

Invoice Financing: Get immediate cash against pending invoices instead of waiting for customer payments.

Equipment Financing: Buy machinery or equipment without blocking your working capital.

This flexibility means you’re not forced into a one-size-fits-all solution. You can choose what works best for your business model and repayment capacity.

4. High Chance of Approval

Let’s be honest—getting a bank loan approved is tough. Rejection rates are high, especially for small businesses and startups.

NBFCs have significantly higher approval rates because:

• They use alternative credit assessment methods
• They focus on business viability, not just credit history
• They’re willing to work with businesses that have limited track records
• They consider collateral and guarantors more favorably

Even if you’ve been rejected by multiple banks, an NBFC loan might still be possible. Many business owners who couldn’t get bank funding have successfully secured NBFC business loans.

5. Less Documentation

Banks ask for mountains of paperwork. Financial statements for the last 3 years, ITR returns, bank statements, GST returns, incorporation documents, and more. The list goes on.

NBFCs keep it simple. While the exact business loan documents required vary by lender, most NBFCs need:

• KYC documents (Aadhaar, PAN, address proof)
• Business registration proof
• Bank statements (6-12 months)
• Latest ITR or GST returns
• Business financials (balance sheet, profit & loss)

That’s it. Some NBFCs offering small business loans may ask for even less documentation if you have good collateral or a strong business profile.

6. Fast Approval and Disbursal

Time is money in business. When you need funding, you need it now—not 3 weeks from now.

NBFC business loans are processed much faster than bank loans:

• Application to approval: 2-7 days
• Approval to disbursal: 1-3 days
• Total timeline: As quick as 3-10 days

Some NBFCs like CreditCares can disburse loans in as little as 72 hours for eligible applicants. This speed is crucial when you’re dealing with time-sensitive business opportunities or emergencies.

Business Loan Eligibility Criteria for NBFC Loans

Wondering if you qualify for an NBFC business loan? Here are the typical eligibility requirements:

Age: Business owner should be between 21-65 years old.

Business Vintage: Most NBFCs prefer businesses operating for at least 1-2 years. Some may consider newer businesses with strong promoters.

Annual Turnover: Minimum turnover requirements vary, typically starting from ₹10-20 lakhs for unsecured business loans.

Credit Score: While NBFCs are flexible, a CIBIL score of 650+ improves your chances. Scores below this aren’t automatic disqualifications.

Business Type: Proprietorships, partnerships, LLPs, private limited companies, and public limited companies are all eligible.

Profitability: Your business should show consistent income and positive cash flow for at least the last 6-12 months.

Collateral (for secured loans): If applying for LAP or secured loans, you need property or assets to pledge.

The key point? Business loan eligibility with NBFCs is more lenient than banks. Even if you don’t tick every box, there’s room for negotiation based on your overall business profile.

Documents Required for NBFC Business Loan

Here’s the complete list of business loan documents required when applying to an NBFC:

For the Business:

• Business registration certificate (Shop Act License, GST certificate, or incorporation documents)
• PAN card of the business
• Last 2 years’ ITR with computation
• Last 12 months’ bank statements showing business transactions
• GST returns for the last 12 months
• Balance sheet and profit & loss statement for the last 2 years
• List of existing loans and liabilities

For the Business Owner/Partners:

• PAN card
• Aadhaar card
• Address proof (utility bill, rental agreement, property documents)
• Passport-size photographs
• Signature verification

For Secured Loans/LAP:

• Property documents (title deed, sale agreement, approved building plan)
• Property valuation report
• Property tax receipts
• NOC from co-owners (if applicable)

Pro tip: Keep all documents ready in digital format. This speeds up your loan application process significantly.

NBFC Business Loan vs Bank Business Loan: Which is Better?

Let’s compare both options side by side:

The verdict? If you need quick funding and have flexibility concerns, go with an NBFC business loan. If you have excellent credit, all documents, and can wait, banks might offer slightly better rates.

For most Indian SMEs and MSMEs, NBFCs are the practical choice.

How to Apply for an NBFC Business Loan

Getting an NBFC business loan is straightforward. Here’s the step-by-step process:

Step 1: Research and Compare Start by comparing different NBFCs. Look at CreditCares loan products and compare interest rates, processing fees, and terms.

Step 2: Check Your Eligibility Use online eligibility calculators to see if you qualify. Most NBFC websites have quick eligibility checkers.

Step 3: Gather Documents Collect all required documents mentioned earlier. Having everything ready speeds up processing.

Step 4: Fill Application Submit your application online or visit the NBFC office. Fill accurate information and attach documents.

Step 5: Property Valuation (for LAP) If applying for a loan against property, the NBFC will conduct a property valuation.

Step 6: Credit Assessment The NBFC reviews your application, checks your credit score, verifies documents, and assesses your repayment capacity.

Step 7: Approval and Sanction Once approved, you’ll receive a sanction letter with loan terms, interest rate, and repayment schedule.

Step 8: Disbursal After accepting terms and completing any remaining formalities, the loan amount is disbursed to your bank account.

Want a hassle-free experience? Apply with CreditCares for dedicated support throughout the process.

Interest Rates on NBFC Business Loans

NBFC business loan interest rates typically range from 12% to 24% per annum, depending on:

• Loan type (secured vs unsecured)
• Loan amount
• Business profile and turnover
• Credit score
• Relationship with the NBFC
• Market conditions

Secured loans like LAP offer lower rates (12-16%) because there’s collateral. Unsecured business loans have higher rates (16-24%) due to increased risk for the lender.

Some NBFCs offer special rates for repeat customers or businesses with excellent track records. Always negotiate and compare offers from multiple lenders before finalizing.

Common Mistakes to Avoid When Taking NBFC Business Loans

1. Not Reading Fine Print Always read the loan agreement carefully. Check for hidden charges, prepayment penalties, and terms that might affect you later.

2. Borrowing More Than Needed Only borrow what you actually need. Extra debt means extra interest burden even if you’re not using the full amount.

3. Ignoring Repayment Capacity Be realistic about your repayment ability. Use EMI calculators to ensure monthly installments fit comfortably in your cash flow.

4. Not Comparing Options Don’t accept the first offer. Compare at least 3-4 NBFCs to find the best business loan terms.

5. Providing Incomplete Documents Missing documents delay processing. Submit complete paperwork to avoid back-and-forth communication.

6. Neglecting Credit Score Even though NBFCs are flexible, maintaining a good credit score helps you get better terms and lower interest rates.

Tips to Improve Your NBFC Business Loan Approval Chances

Want to maximize your approval odds? Follow these practical tips:

Maintain healthy business financials: Show consistent revenue and profitability in your books.

Keep personal and business finances separate: Maintain separate bank accounts for cleaner financial tracking.

Improve your credit score: Pay existing debts on time and keep credit utilization below 30%.

Build relationship with the NBFC: Start with smaller loans and build a repayment track record.

Provide collateral if possible: Offering security significantly improves approval chances and reduces interest rates.

Have a clear business plan: Demonstrate how you’ll use the loan and how it’ll help grow your business.

Update all business registrations: Ensure GST, PAN, and other business licenses are current and active.

Which Loan is Best for Business?

This depends on your specific needs, but here are the top options:

For Working Capital: Unsecured business loans from NBFCs like CreditCares offer quick access without collateral.

For Large-Scale Expansion: Loan Against Property (LAP) provides substantial funding at lower interest rates. This is ideal if you own commercial or residential property.

For Equipment Purchase: Equipment financing or term loans specifically for machinery.

For Emergency Funding: Pre-approved credit lines or overdraft facilities give instant access to funds.

Best Overall Combination: Many businesses use a mix of LAP and business loans from CreditCares to balance immediate needs with long-term expansion plans.

The right choice depends on your loan amount requirement, repayment capacity, available collateral, and urgency of funding.

Frequently Asked Questions (FAQs)

Who is eligible for a business loan?

Business owners aged 21-65 years with businesses operating for at least 1-2 years are eligible. Your business should have minimum annual turnover (typically ₹10-20 lakhs), reasonable credit score (650+), and demonstrate consistent income. Proprietorships, partnerships, LLPs, and companies all qualify for business loans. NBFCs have more flexible eligibility compared to banks.

How to get a 2 crore business loan?

To get a ₹2 crore business loan, you’ll typically need strong business financials, higher annual turnover (₹50 lakhs+), good credit score (750+), and collateral or security. Loan against property from CreditCares is an excellent option for such large amounts. Ensure you have all required documents, demonstrate clear business use of funds, and show sufficient repayment capacity through your cash flow projections.

Can I get a 0% interest loan?

No, there are no genuine 0% interest business loans in the market. All lenders charge interest to cover their costs and risks. However, some government schemes offer subsidized interest rates for specific sectors or categories. Be cautious of offers claiming 0% interest as they may have hidden charges. With NBFCs like CreditCares, you get transparent, competitive interest rates starting from 12% for secured loans.

Which loan is best for business?

The best loans for business are Loan Against Property (LAP) and Business Loans from CreditCares. LAP offers larger amounts (up to ₹5-10 crore), lower interest rates (12-16%), and longer repayment tenure, making it ideal for major expansion. Unsecured business loans work best for working capital and smaller requirements up to ₹50 lakhs. Combining both gives you flexibility—LAP for big investments and business loans for operational needs.

Conclusion: Is Getting an NBFC Business Loan Beneficial?

Absolutely yes. NBFC business loans offer relaxed lending norms, pre-approved limits, flexible options, high approval rates, minimal documentation, and lightning-fast processing. For Indian business owners who need funding quickly without jumping through endless hoops, NBFCs are the practical solution.

While banks might offer slightly lower interest rates, the trade-off in time, effort, and approval uncertainty often isn’t worth it. NBFCs understand business realities better and design products that actually work for SMEs and MSMEs.

Whether you need working capital, want to expand operations, or require emergency funding, an NBFC business loan gives you access to capital when you need it most.

Ready to take your business to the next level? Contact CreditCares today to check your eligibility and get pre-approved for a business loan or loan against property. Our team provides personalized guidance and hassle-free processing to help you secure funding in as little as 3-7 days.

Don’t let funding constraints hold your business back. Apply now and unlock your growth potential.