In today’s dynamic financial ecosystem, lenders are increasingly focusing on sustainable, low-risk lending practices. To support creditworthy small and medium enterprises (SMEs), the Small Business Term Loan Program offers secured underwriting, strict eligibility, and well-defined risk controls. The objective is to provide responsible capital to businesses with healthy financials and consistent growth trajectories.
Below is a comprehensive breakdown of the eligibility criteria, documentation requirements, loan structure, and credit risk controls.
1. Borrower Eligibility – Strict but Purposeful
This program is specifically crafted for financially sound, operationally stable businesses with verifiable growth and profit records.
| Parameter | Minimum Requirement |
|---|---|
| Annual Turnover | ₹1 Crore (Latest Financial Year) |
| Business Vintage | At least 3 years of continuous operations |
| Revenue Trend | Year-on-year turnover growth; no decline in last 2 years |
| Profitability | Net profit reported in each of the last 2 financial years |
| Eligible Entities | Private Limited, LLP, Partnership, Proprietorship |
| Credit Score | 700+ (CIBIL for all directors/partners/co-applicants) |
| Repayment History | No DPD >30 in the last 12 months; no write-offs or settlements |
2. Required Documentation – For Transparent Assessment
To assess financial health and creditworthiness, the following documents are mandatory:
Business & Personal KYC
- Applicant PAN, Aadhaar, and photograph
- Co-applicant PAN, Aadhaar, and photograph
- Business ownership proof
- GST registration certificate
Financial Documentation
- GST returns for the last 12 months
- Audited Financials for the last 2 years (Balance Sheet, Profit & Loss, Audit Report)
- ITRs with computation for the last 2 years
- Bank statements – 12 months (PDF format, analysis-ready)
- Loan sanction letters and EMI schedules (if loans are currently active)
- Company KYC documents (for partnership and private limited firms)
3. Loan Structure – Designed for Growth Without Overleveraging
| Loan Component | Details |
|---|---|
| Loan Amount | ₹5 Lakhs to ₹15 Lakhs |
| Sanction Limit | Not to exceed 20% of annual turnover |
| Tenure | 12 to 36 months |
| Interest Rate | 16% to 22% (based on risk profile) |
| Processing Fee | 2% of loan amount |
This structure ensures that loans remain proportionate to the borrower’s revenue scale, reducing the likelihood of credit stress.
4. Risk Controls – Built-In Lending Discipline
Banking Hygiene Requirements
| Condition | Minimum Benchmark |
|---|---|
| Average Monthly Bank Balance | ₹1.5 Lakhs or higher |
| Cheque Bounce History | No bounces in the last 6 months |
Maintaining healthy average balances and no recent cheque dishonours is a sign of operational discipline and liquidity stability.
Industry-Level Exclusions (Blacklist)
To mitigate industry-specific credit risks, the following sectors are not eligible:
- Multi-Level Marketing (MLM) firms
- Cryptocurrency trading companies
- Stock trading and brokerage firms
- Real estate agents and aggregators
These sectors typically demonstrate volatile income patterns, regulatory exposure, and high-risk lending profiles.
Conclusion
The Small Business Term Loan Program is a highly focused financial product aimed at empowering well-run, growth-oriented enterprises with access to capital that matches their operational needs. With transparent underwriting, prudent caps, and disciplined monitoring, this program balances business support with portfolio quality control.
Businesses that meet these criteria can benefit from quick approvals, reliable capital access, and fair pricing—paving the way for sustained expansion.
Looking to apply or know more? Contact your relationship manager or lending advisor today to see if your business qualifies. Let capital work for your growth, the right way.
