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Canara Bank was founded by Shri. Late Ammembal Subbarao Pai in July 1906. The bank was founded in Mangalore in Karnataka and has evolved into one of the foremost Indian banking institutions today. Post nationalization in 1969, Canara Bank has diversified rapidly into several business segments.
Canara bank is one of the leading organisations in the banking sector of India. Established in 1906, the main headquarters of the bank is located in Bangalore. Further, since its inception, the bank has grown and expanded to over 3500 branches in several locations across India.
Canara bank has a rich history of continuous progress and profit making ability, which has allowed it to establish itself as one of the premiere financial service providers in the country. Leveraging deep industry experience and advanced technology, the organisation has been able to provide world-class services to their customers. They also provide cleverly designed business loans for business startups, SME loans, self-employed businesses, software companies, the IT sector, traders, manufacturers, machinery, equipment, and others.
The Canara Bank business loan provides a fund to facilitate end-to-end business operations. This loan can be availed to meet the business expansion or working capital requirements. Given below are some of the features and benefits of a Canara Bank business loan:
To avail a business loan from Canara Bank, you will have to fulfill some eligibility conditions. Given below are some of the eligibility criterion for a business loan:
The table given below depicts the various Canara bank business loan fees and charges:
| Loan Amount | Interest Rate on Short Term Loan per annum | Interest Rate on Term Loan per annum | ||
| Micro Organisations | Small & Medium Organisations | Micro Organisations | Small & Medium Organisations | |
| Upto 50,000 | Base Rate + 0.50% | Base Rate + 1% | Base Rate +1% | Base Rate + 1.50% |
| More than 50,000 Up to 2,00,000 | Base Rate + 2.50% | Base Rate + 3% | Base Rate + 2.50% | Base Rate + 2% – Base Rate + 3% |
| More than 2,00,000 Up to 2,00,00,000 | Rate of interest depends on scoring norms and parameters | Rate of interest depends on scoring norms and parameters | ||
| Base Rate Of 1.50% to Base Rate + 4.50% | Base Rate Of 2.25% to Base Rate + 5% | Base Rate + 1.75% to Base Rate + 4.75% | Base Rate + 2.25% to Base Rate + 5.75% | |
| More than 2,00,00,000 Up to 10,00,00,000 | Rate of interest based depends on Internal Credit Risk Rating with Base Rate Of 3.25% to 5.75% and applicable Term Premium | |||
| More than 10,00,00,000 | Rate of interest depends on External Credit Risk Rating with Base Rate Of 2.25% to 5.75% along with applicable Term Premium |
The documents required for Canara bank business loan are as follows:
Here is the Canara Bank Business Loan for MSMEs & Start-ups in a tabular format:
| Interest rate | As per the business requirements |
| Age Criteria | From 21 years to Maximum 50 years |
| Loan Amount | From Rs. 10 lakh to Rs. 200 lakh |
| Nature of Loan | The business loan can be a term loan, working capital & Non-fund based limit |
| Purpose | You can obtain the business loan for working capital requirement & capital expenditure |
| Repayment Tenure | Starts from 1 year to 7 years |
| Security | 50% of loan amount by way of land/building/securities/bank deposits |
| Margin | Minimum 20% as per term loan minimum and 25% as working capital |
Canara bank provides business loans in several categories such as Term Loans, Working Capital Loans, and Pradhan Mantri Mudra Yojana (PMMY).
A term business loan can be obtained from Canara Bank in both secured and unsecured types.This loan can be used for several business expansion purposes like meeting capital requirements, enhancing cash flow, buying land, buildings, equipment, machinery, and more. Given below are some of the features of the term loan offered by Canara Bank:
A working capital loan can be availed by an organisation to acquire raw materials, semi-finished goods, or pay back sundry debtors. The working capital requirement of a business is determined via various methods like Cash Budget System, Net Owned Funds System, and Maximum Permissible Bank Finance (MPBF) System. Given below are some of the features of this loan product:
The Mudra Yojana is designed for assisting small and medium MSMEs. This loan will help such companies to grow, trade, produce, manufacture, etc. The collateral-free amount is Rs. 50,000. However, the maximum amount offered is up to Rs. 10 lakh. The repayment tenure for such loan yojana is 5 years. Further, the rate of interest depends upon the amount of loan that falls under MSME. Canara bank charges a processing fee depending on the disbursed loan amount.
Usually, banks and NBFC consider a number of different factors before determining the appropriate interest rate for your loan. Given below are some of the prominent factors that affect the business loan interest rate provided by Canara bank.
The loan amount that you have applied for is one of the major factors affecting your loan interest rates. If you apply for a higher loan amount, you will be granted lower rates of interest, and vice versa. In other words, the loan amount and interest rate are inversely proportional to each other.
The type of business also affects the business loan interest rates. The type of business you are involved in should represent a positive outlook and should not be blacklisted in any sense. While determining the appropriate interest rates, the lenders take a look at the previous nature of the business to determine the risk aspect of your business. If your business is determined to be less risky, you will be granted favorable interest rates.
The total experience of the business is one of the prime aspects affecting the loan interest rates. This is because a business involved in a particular industry for an extended duration is generally viewed as being more stable. Lenders usually grant higher interest rates to start ups or new businesses, due to the risk of default or non-payment of loan amount.
If your business has higher turnover, you may be granted a business loan at a really low-interest rates. Banks and lenders usually check the quarterly, monthly, and yearly profit statements to accurately determine the financial standing of the business. However, if you have a low turnover, you will be granted a higher interest rate.
The CIBIL score is the prime indicator of your credit history and repayment ability. This helps the lender to determine how much of a credit risk you are. If you have a poor repayment history, you might be granted a higher interest rate, or in extreme cases, it may even lead to rejection of application. To get a loan from Canara bank you must have a credit score of 750 or more. The higher the credit, there are higher the chances of getting a business loan at a lower interest rate.
You can always use the Pluto Money online calculator and calculate your business loan EMI. All you have to do is enter the loan amount, loan tenure, and interest rate, and the calculator will determine the best loan offers for you The EMI calculation for your business loan involves a lot of variables and complex calculations that simply take too much time and effort. However, if you wish to understand the EMI calculation, you can always refer to the below given formula.
Given below is the formula to calculate your loan EMI amount:
EMI = P × r × (1 + r)n/((1 + r)n – 1)
Here,
Here is a table representing the comparison between Canara bank and other Business loan lenders on the basis of annual rate of interest.
| Other Bank/NBFCs | Rate of Interest (p.a.) |
| Canara Bank | 10.50% to 18% |
| IIFL Finance | 12.75% – 32% p.a. |
| HDFC Bank | 11.90% to 21.35% |
| Flexi Loans | 1% per month onwards |
| Zip Loan | 1% to 1.5% per month (Flat ROI) |
| Axis Bank | 14.25% to 18.50% |
| IDFC First Bank | 14.50% onwards |
| Kotak Mahindra Bank | 16% to 19.99% |
| Fullerton Finance | 17% to 21% |
| Bajaj Finserv | 17% p.a. onwards |
| RBL Bank | 17.50% to 25% |
| ICICI Bank | 18% onwards |
| Indifi Finance | 1.5% per month onwards |
| Lendingkart Finance | 1.5% to 2% per month |
| Tata Capital Finance | 19% p.a. onwards |
| NeoGrowth Finance | 19% to 24% |
| Hero FinCorp | Up to 26% |
In case you have any doubts or queries regarding Canara Bank business loan, you can get in touch with customer service in the below given ways:
The interest rate offered for a business loan in Canara bank ranges between10.50% to 18%.
You can get a maximum loan amount of Rs 10 crore, while the minimum loan amount is Rs. 50,000.
Open the Canara bank website, click on corporate banking, then loan and advance banking, and then select loan application status. Enter the details asked and you will know the status of your business loan application. This is possible when you already have an account in Canara bank. If you do not have any account you can contact the customer care executive.
The best credit score is 750 or more. However, Canara bank also accepts a minimum CIBIL score of 650.
The business's minimal annual income must be a minimum of Rs. 1.5 lakh. The applicant must be at least 21 years at the time of applying for the loan.
The documents required in Canara bank are identity proof, address proof of company incorporation, a document of the deed signed, ITR, and many more.
You can simply apply for a business loan in Canara bank online by visiting the official website of Canara bank.
Loan foreclosure is a complete repayment of the remaining loan amount in a single payment and not in multiple EMIs. You can use your surplus funds can be used to give a complete foreclosure to your loan.