Federal Bank Business Loan – Eligibility, Charges, and How to Apply

Federal Bank Business Loan

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Federal Bank is Indian private sector bank which provides various banking facilities to its customers. The bank has 1,336 branches spread across different states in India. It also has representative offices abroad in Abu Dhabi, Kuwait, Oman, and Dubai.

NameFederal Bank[1]
HeadquartersKochi, Kerala, India
IndustryBanking Financial Services
Founded23 April, 1931
FounderK.P. Hormis
Federal Bank Business Loan

Federal Bank Business Loan

One can avail business loan from Federal Bank at an attractive interest rate[1]. If you are thinking to start a business or want to expand your business but don’t have a sufficient money, then you can avail for business loan. Federal Bank offers business loan to self-employed individuals, proprietors, partnership firms involved in the business of manufacturing, trading, or services.

Also Read: HDFC Bank Business Loan

What is a Business Loan

Business Loan is a loan which can be availed by any person who wants to start their own business or any individual who wants to expand their business.

Benefits and Features of Business Loan

  • Helps to start and grow your own business
  • Helps in expanding your business
  • Strengthens business credit score
  • No collateral required
  • Attractive and competitive interest rate
  • Simplified documentation process
  • Higher loan disbursal amount

Features of Federal Bank Business Loan

  • Simple application process
  • Flexible repayment options
  • Different loan products are available for all individuals which suits the financial requirements of everyone
  • Competitive interest rate

Interest Rate, Loan Amount, and Other Charges

Interest RateFrom 8.85% p.a.
Loan AmountUp to 7.5 crore
Loan TenureUp to 120 months
Loan Processing FeeUp to 3% of the loan amount

Eligibility Criteria

  • Individuals should be at least 21 years of age and should not be more than 65 years at the time of loan maturity
  • Self-employed professionals
  • Non-professionals
  • MSMEs
  • Private and Public Limited. Co.
  • Sole Proprietorship
  • Partnership Firms
  • Any other business entities engaged in trading, services or manufacturing sectors etc.

Documents Required

  • Passport sized photographs
  • Id Proof
  • Address Proof
  • Bank Account Statement of last 12 months
  • Business Address Proof
  • Business Incorporate Certificate

Repayment of Federal Bank Business Loan

  • Standard Instruction
  • Post-Dated Cheques
  • EMIs
  • Electronic Clearing Service (ECS)
  • Internet Banking
  • Mobile Banking

What are the factors that affect the interest rate of Business Loan

Business loans are offered to the individuals who wants to grow their business or start their own business. Different bank offers different interest rates, loan amount and tenure for business loans. Business loan interest rates are important accepts for every borrower because everyone wants a high loan amount at a low interest rate, but there are certain factors which may affect you to get lower interest rate business loan. Mentioned below are some of the factors which affect your business loan interest rate.

  • CIBL Score

A score of 750 or above is said to be a good and healthy score. If you have a low CIBL score then your rate of interest will be higher on the other hand if your score is higher you will get a lower interest rate.

  • Nature of the Business

Your nature of business should be positive and doing of business should not be negative. Therefor nature of your business is one of the main factor which affects your business loan. On deciding the interest rate, the lenders will examine the nature of your business, whether it is profit making or loss making.

  • Business Reputation

If your business reputation is good and have a steady track record of earnings, you can get attractive and lower rate of interest on business loan.

  • Profit made by the Business

The lender will always examine the monthly, quarterly, and annual profit of your business before deciding the interest rate.

  • Repayment History

Repayment history is another factor affecting your business loan interest rate. If your past repayment history is good then you are likely to get a lower rate of interest.

  • Good Relation

Your interest rate also depends on your relation with the financial institution. If you have a good relation with the financial institution then you are likely to get a lower interest rate.


1. What is a business loan?

Ans: Business Loan is a loan which can be availed by any person who wants to start their own business or any individual who wants to expand their business.

2. What are the two types of business loans offered by the banks?

Ans: Two types of business loans offered by the bank are –

1. Secured loans – This is a loan where individuals take a loan with collateral. Here the rate of interest is less.

2. Unsecured loan/ Small business loans – This loan a loan where businesses take a loan without any collateral. Here the interest rate is on higher side.

3. For what purpose can a business loan be availed?

Ans: Business loans can be availed for all business related requirements like for starting up a new business, expanding of your existing business, business related projects etc.

4. Who can avail for business loan?

Ans: Self-employed individuals, professionals, non-professionals, individuals engaged in business can avail for business loans.

5. What are the documents required to avail business loan?

Ans: Documents such as id proof, address proof, passport sized photographs, bank statement etc., are required to avail for a business loan.

6. Is the business loan interest rate fixed or floating?

Ans: It depends on the bank or lender to offer fixed or floating interests’ rates. However, most banks prefer Fixed interest rates over floating.

7. What are the factors which affects business loan interest rate?

Ans: Factors which affects business loan interest rates are as follows:

  • CIBL Score
  • Business Reputation
  • Nature of Business
  • Repayment History
  • Relationship with the bank etc.

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