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Loans starting from ₹2 lakhs*

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Secured Business Loan

Whether you need funds to set up a new business or meet working capital requirements for your existing venture, a secured business loan can help you face any financial crunch. IIFL Home Loans offers loans for small businesses, ensuring you gain immediate financial assistance when you need it the most.

What is Secured Business Loan?

A secured business loan is designed to provide businesses with the necessary capital while offering greater security to lenders. Unlike unsecured loans where no collateral is required, secured business loans require you to pledge assets, such as real estate, equipment, inventory, machinery, or accounts receivable. The collateral acts as a safety net for lenders, mitigating the risks of default and allowing them to offer loans at more favorable terms and conditions.

Secured business loans come in handy for companies looking to fund their business expansion, launch new product lines, augment their infrastructure, and address their working capital needs or any other critical needs. However, it is advisable for business owners to thoroughly assess their capacity to repay the loan, as any default may result in the forfeiture of the pledged assets.

One of the key advantages of a secured business loan is that it enables entrepreneurs to access larger loan amounts compared to unsecured options. Additionally, it comes with more lenient eligibility criteria, making it accessible to a wider range of businesses, including startups or those with less-than-perfect credit histories. Usually, secured business loan interest rates start from 10.65% onwards and can be availed for a maximum tenure of 10 years.

Secured Business Loan Benefits

  • Assets For Security: In many cases, a small business may not be eligible for an unsecured loan. However, a business always owns valuable assets, which can be pledged against a secured business loan, making it convenient to meet various financing needs.

  • Maximising Your Asset’s Value: A secured business loan helps in unlocking the potential and value of your asset. You can maximize the potential and value of your assets to fulfill your business finance needs.

  • Quick Approval: Small business owners can easily apply for a secured business loan and get approvals in no time with minimal documentation. There are various tools to help you know if you match the eligibility instantly.

  • Complete Transparency: IIFL Home Loans ensures maximum transparency in the application and sanction of a secured business loan to the borrower. At every step, you will have complete clarity on everything you need to know.

Why opt for IIFL Home Loans for Secured Business Loan?

IIFL Home Loans is a leading financial institution that provides comprehensive business loan options to meet your financial needs and fulfill your business goals. IIFL Home Loans also gives you the option to transfer your existing balance to get finance at better business loan interest rates and more flexibility.

We also offer loan for small business with minimal documentation and quick disbursals. You can easily apply for a business loan online with IIFL Home Loans and enjoy competitive interest rates and flexible repayment schedules.

Secured Business Loan Key Features

High loan amount

You can secure loan assistance of up to ₹10 crore when you apply for a business loan. The generous loan limit provides businesses with the financial power to undertake significant business expansion, invest in new equipment, or meet other substantial capital requirements.

Extended loan tenure

A secured business loan typically offers borrowers a long repayment tenure that may go up to 10 years. This loan type is gaining popularity as the go-to financing option, especially for small businesses as it allows them to repay it at their convenience. Additionally, if the property value against which the MSME business loan is granted is higher, the repayment tenure is longer and more flexible.

Loan transfer

Small businesses can also choose the option of a loan balance transfer. With this secured business loan feature, they can leverage the top-up facility, which helps them enjoy the benefits of more attractive business loan interest rates.

Lower interest rates

Due to the added security provided by collateral, secured business loans typically come with competitive interest rates compared to unsecured loans. The business loan interest rates usually start from just 10.75%. At IIFL Home Loans, you can easily secure a business loan against residential or commercial property, land, or other assets at highly affordable interest rates that translate to reduced overall interest costs over the loan duration.

Secured Business Loan Eligibility

Eligibility Details

Before you go ahead and apply for a secured business loan, it is important to check the eligibility criteria for it. Here is a snapshot:

  • The borrower must be an Indian resident, either salaried or self-employed.

  • The borrower must be in the age group of a minimum of 21 years and a maximum of 70 years.

  • The primary borrower can select a co-applicant to extend the business loan eligibility limit and get the best business loan interest rates. The co-applicants can be partnership firms, close relatives, or private limited companies.

  • The entities eligible to be borrowers for a secured business loan include shopkeepers, wholesalers, retailers, micro and small manufacturing enterprises, and self-employed professionals.

  • Properties covered include residential, commercial/mixed-use properties, and industrial built-ups.

  • Loan to Value on the properties goes up to 65%.

  • Transactions covered include Loan Against Residential Property, Balance Transfer of Loan Against Residential Property along with top-up, Non-Residential Purchases, and balance transfer of Non-Residential Purchases.

Secured Business Loan EMI Calculator

Before you consider obtaining any type of loan, be it a secured business loan or any other, you need to first understand the obligation of Equated Monthly Instalment (EMI) payments. The best way to understand the principal and interest component in the EMI of your business loan or MSME loan is by using an EMI calculator.

The loan calculator simplifies the process of determining the total interest payable over the tenure of the loan. With just three essential inputs - the desired loan amount, the interest rate, and the loan tenure, you can swiftly calculate the EMI that you will need to pay. This invaluable tool helps businesses plan their finances effectively, as it provides a clear breakdown of how much you have to repay each month and the overall interest cost over the loan period.

By using the EMI calculator, entrepreneurs can make informed decisions about their borrowing needs and ensure that the loan is comfortably manageable within their financial capabilities.


Calculate your monthly EMI

A secured business loan can play a crucial role in providing small business owners with substantial funding to support their growth and development endeavors. To avail the loan for small business, you need to be a self-employed or salaried individual and have certain documents ready. Here’s the list of documents:

Document Type Salaried
Application Form
Identity Proof
  • PAN (Mandatory)
  • Voter ID
  • Passport
  • Driving Licence
  • Aadhar Card
Address Proof
  • Passport
  • Voter ID
  • Driving Licence
  • Aadhar Card
Income & Other Documents
  • Salary Slip/Certificate
  • Form 16/ITR
  • Bank Statement
Property Documents
  • Copy of chain documents of the property (if applicable)
  • Copy of Receipt made to the developer (if applicable)
  • Copy of Buyer Agreement
  • Copy of Agreement to Sell (if executed)
Document Type Self-employed
Application Form
Identity Proof
  • PAN (Mandatory)
  • Voter ID
  • Passport
  • Driving Licence
  • Aadhar Card
Address Proof
  • Passport
  • Voter ID
  • Driving Licence
  • Aadhar Card
Income & Other Documents
  • Form 16/ITR
  • Bank Statement
Property Documents
  • Copy of chain documents of the property (if applicable)
  • Copy of Receipt made to the developer (if applicable)
  • Copy of Buyer Agreement
  • Copy of Agreement to Sell (if executed)

MSME loan is the best way for small businesses to scale up and increase their business footprint. The secured business loan interest rates are much more economical and lower than those of unsecured business loans.

We at IIFL Home Loans, offer competitive interest rates for MSME Loan or startup business loans, which start from 10.75%*. However, these may depend on various factors.

A secured business loan helps in business expansion, purchase of machinery/equipment investment in new projects, etc. However, before you apply for a secured business loan, there are a few things you need to include in your checklist, such as:

Business and Personal Credit Score

Both your business credit score and your credit score play an important role in the business loan application process. If you find your score is low, you should strive to increase it.

Eligibility Criteria and Documents Required

You need to check the business loan eligibility criteria before applying with a particular lender, as requirements vary from one financial institution to another. Once you match this, make sure you possess all the documents required by the financial institution of your choice.

Solid Business Plan

Before you go ahead and apply for a business loan, you should be sure of your objectives, fund utility, revenue model, and repayment plan. Having a thorough business plan in place can make it easier to obtain a loan at favorable terms.

Fill Out the Application Form Carefully

Make sure to pay attention to every little detail and not make even a small error. In many cases, a small error can lead to your application being rejected. If you have any doubts, you should resolve it with the lender before filling out the form.

A secured business loan can be availed by sole proprietorships, partnerships, and limited liability companies with strong credentials.

  • First and foremost, the borrowers need to check if their business meets the eligibility criteria to get loan for small business. Along with the asset, they have to offer security which will undergo evaluation.

  • Once the due diligence is done, the borrower can apply for MSME Loan by submitting the documents required and taking note of business loan interest rates and the fees involved.

  • Once the borrower files the requisite documents, the approval and disbursal of the loan are efficient and quick.

Before you get started with the process of obtaining your secured business loan, it is also important to know the fees applicable to it:

  • A minimal one-time processing fee.

  • Late payment fee (in case of delays in repayment).

  • Miscellaneous charges such as collateral evaluation, stamp duty, documentation, amortization charges, collection of registration certificates, etc. as applicable.

  • A minimal pre-payment charge.

The following is the list of fees & charges applicable to IIFL Home Loans:

Processing Fees Up to 2% of the loan amount approved
Late Payment Charges 18% per annum on the overdue loan amount
Collateral Evaluation Charges Starting From Rs 5,000*

As per the borrower’s needs, the interest rate policy, the purpose, and the loan tenure, lenders usually use different modes to calculate the repayment schedule. Some of the common business loan repayment options are:

Equated Monthly Instalments (EMIs)

This type of payment schedule enables borrowers to make payments in equal parts via scheduled monthly payments. The total EMI amount includes both principal and interest components of the business loan.

Bullet Payments

In this type of repayment mode, the borrower pays the accumulated interest during the tenure of the loan for small business and pays the principal amount at the end of the tenure. This is usually extended only for a fixed term.


You can opt for the prepayment mode in which you end up paying the loan amount before the tenure ends. This is usually the option for those borrowers who have accumulated cash and want to clear all their dues as soon as possible. However, a penalty may apply depending on the lender’s business loan policies.

Electronic Clearance Service (ECS)

This method is usually for those borrowers who do not have an account in that financial institution. It allows the lender to deduct the principal amount from the bank account chosen for the repayment plan.

Note: Please check with the lender about the repayment options when applying for the loan.


A Secured Business Loan is a type of loan that small business owners such as Kirana shops, stores or restaurants can acquire to fund any professional or personal commitment. Businesses can get the loan by pledging residential, commercial or plot of land.

In order to apply for a business loan, it is crucial to meet the sme loan eligibility criteria. At IIFL Home Loans, small businesses can easily apply for Secured Business Loan Online.

The business loan or sme lending requires a collateral, which is essentially a property asset. The loan amount is offered after evaluating the current market value of the property. In case the value of the mortgaged asset is high, the loan amount is also high, and the loan term is longer.

If you do not pay back a secured business loan, you may face the following consequences:

  1. Default charges: If you fail to pay your monthly installments on time, you will be liable to pay default charges/late payment charges. This charges is charged on the unpaid loan balance from the relevant due date until the date of payment of the entire loan.
  2. Additional charges: You must pay penalties, fees, and other costs associated with the default.
  3. Claim on Assets: When you fail to repay your secured business loan, the lender has first and foremost charge on the mortgaged property. If the value of the collateral does not cover 100% of the outstanding loan, you must furnish additional security.
  4. Credit score: Missed/delayed loan payments lower your credit score. Thus, your chances of obtaining loans at affordable rates in the future reduce considerably.
  5. Legal action: Lenders take legal action if they cannot recover overdue and cancel the unutilized amount of your loan.

No, a secured loan does not harm your credit score. Managing a collateral-backed loan responsibly can improve your credit score in the long run. Below are some critical points to remember:

  1. Credit inquiry: When you apply for a secured business loan or any new line of credit, the lender performs a hard pull on your credit report. Each hard inquiry lowers your credit score, even if the impact may be small. Thus, you should avoid making multiple loan applications.
  1. Credit mix: Credit scoring models view a diverse credit profile positively. Hence, you should have a good mix of installment loans (e.g. secured business lending) and revolving credit (e.g. credit cards). Also, you must avoid taking unsecured loans.
  1. Credit utilization: The credit utilization ratio is the ratio of your credit card balance to your credit limit. You must ideally maintain your credit utilization ratio below 30% to improve your credit score.
  1. Payment history: Missed/delayed loan payments reduce your credit score, even if the loan is secured. Thus, repay your debts on time.

A secured loan is a type of loan that a bank or a non-banking financial company sanctions against collateral. The pledged property assures the lender that the borrower will repay the loan within the agreed tenure. If the borrower defaults on the loan, the lender can seize the collateral and sell it off to recover the debt. 

Loan interest rates differ from lender to lender and may be fixed or floating. IIFL Home Loans secured business loan interest rate starts from 10.75% p.a.

You should take a co-applicant to obtain the best interest rate and improve your loan eligibility limit.

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