What is the maximum loan amount I can apply for?

Business loans are designed to provide financial support to companies for various needs such as expansion, purchasing inventory, or managing working capital. The maximum loan amount you can apply for depends on several factors assessed by the loan provider. They are:

• Business Structure: Sole proprietorships and partnerships generally have lower maximum loan eligibility compared to private limited companies and public limited companies. The latter are seen as more formal and structured.
• Business Vintage/Experience: Loan providers offer higher loan amounts to companies that have been in business for maximum years since they have an established track record. Startups may get smaller working capital loans.
• Annual Revenue: Higher annual sales turnover, as seen in financial statements, allows businesses to qualify for larger loans—this indicates repayment capacity.
• Credit Score: For micro and small companies, the promoter's personal credit score impacts loan amount eligibility. Good CIBIL ( Credit Information Bureau (India) Limited) scores mean higher possible loan sums.
• Collateral Value: The maximum loan size is also proportional to the value and type of business assets and collateral you can offer the lender—machinery, property, equipment, etc.
• Existing Debt: Total current company debt obligations that impact risk profile reduce the extra debt burden the loan provider may wish to undertake.
• Cash Flow Stability: Stable, rising, and healthy cash flows give loan providers comfort that regular loan instalments will be paid, which supports bigger loans.

It's important to compare options from multiple loan providers and choose the one that best suits your financial needs and repayment ability.