Small Ticket Business Loans: Features, Eligibility & Application Process

Posted on Monday, April 7th, 2025 | By IndusInd Bank

Starting a new business requires capital, and for many entrepreneurs in India, securing funds can be a major hurdle. Traditional business loans often come with high eligibility criteria, extensive documentation, and long processing times. This is where small ticket business loans come into play, offering a quicker and more accessible financing solution for startups and small businesses.

Small ticket business loans provide a financial lifeline to entrepreneurs, allowing them to manage operational expenses, invest in inventory, expand their reach, or even handle unforeseen business challenges. In this blog, we will explore what these loans are, their key features and eligibility criteria, the application process, and tips for managing repayments efficiently.

What Are Small Ticket Business Loans?

Small ticket business loans are unsecured loans designed for startups and small businesses that require a lower amount of funding compared to traditional business loans. These loans typically range from ₹2 lakh to ₹20 lakh, making them ideal for businesses in their early stages.

Unlike larger business loans that often require collateral and extensive paperwork, small ticket loans are quick, flexible, and easier to obtain. Many banks, NBFCs (Non-Banking Financial Companies), and fintech lenders in India offer these loans to help businesses scale without facing financial roadblocks.

Who Can Benefit from Small Ticket Business Loans?

• Startups & New Entrepreneurs looking for working capital

• Small Retailers & Shop Owners who need funds to expand their business

• Freelancers & Self-Employed Professionals needing financial support

• Online Sellers & E-commerce Startups managing inventory and marketing expenses

• Micro & Small Enterprises (MSMEs) that need immediate cash flow assistance

Key Features of Small Ticket Business Loans

1. Loan Amount: Ranges from ₹2 lakh to ₹20 lakh, depending on the lender.

2. Collateral-Free Loans: No need for assets or security to avail of the loan.

3. Quick Processing: Many lenders offer instant approval and disbursal within 24-48 hours.

4. Flexible Repayment Tenure: Typically ranges from 6 months to up to 5 years

5. Minimal Documentation: Requires basic KYC, business proof, and bank statements.

6. Competitive Interest Rates: Interest rates range from 12% to 24% p.a., depending on the borrower’s credit profile.

Eligibility Criteria for Small Ticket Business Loans

While eligibility varies across lenders, the common requirements include:

• Age of Applicant: Typically between 21 to 65 years.

• Business Vintage: Minimum 2 years of business operation.

• Credit Score: A CIBIL score of 650 or above improves chances of approval.

• Banking & Income Stability: Regular transactions in a business account or stable income proof.

How to Apply for a Small Ticket Business Loan

Applying for a small ticket business loan is a straightforward process. Here’s a step-by-step guide:

Step 1: Research and Compare Lenders

Before applying, compare different lenders based on interest rates, processing fees, repayment terms, and loan tenure. Banks, NBFCs, and digital lending platforms all have different terms, so choosing the right one is crucial.

Step 2: Check Eligibility & Gather Documents

Ensure you meet the lender’s eligibility criteria. The common documents required are:

• KYC Documents – Aadhaar Card, PAN Card, Voter ID

• Business Proof – GST certificate, business registration certificate, or trade license

• Bank Statements – Last 6-12 months’ bank transaction history

• Income Proof – Profit & loss statement (if applicable)

Some lenders like IndusInd Bank offer 100% digital application process for small ticket business loans with no physical documentation and branch visits required.

Step 3: Submit the Loan Application

• Visit the lender’s website or branch and fill out the application form.

• Upload or submit the required documents.

Step 4: Loan Processing & Verification

Once submitted, the lender reviews your application, verifies your business credentials, and assesses your repayment ability.

Step 5: Loan Approval & Disbursal

If approved, the loan amount is disbursed directly into the bank account, often within 48 hours, making it a great option for urgent financial needs.

Tips for Managing Loan Repayments Efficiently

Taking a loan is easy, but managing repayments smartly is crucial to avoid financial stress. Here are some effective tips:

1. Choose a Comfortable EMI Plan

Opt for an EMI plan that matches your cash flow. A longer tenure may reduce EMI amounts but increase total interest costs, so balance it wisely.

2. Automate EMI Payments

Set up auto-debit instructions or ECS mandates to ensure timely EMI payments and avoid late fees or penalties.

3. Keep an Emergency Fund

Having a reserve fund helps in managing repayments during unexpected financial challenges, such as seasonal dips in business revenue.

4. Track Expenses and Cash Flow

Use business accounting software or apps to monitor your income, expenses, and upcoming EMIs. Proper tracking prevents unnecessary spending and ensures you have enough funds for repayments.

5. Avoid Taking Multiple Loans

Taking multiple loans can increase your financial burden and affect your credit score. If additional funds are required, consider loan top-ups instead of fresh loans.

6. Repay on Time to Improve Credit Score

Timely repayment of your small ticket business loan boosts your credit score, making it easier to secure higher loans in the future at better interest rates.

7. Prepay If Possible

If you have surplus funds, consider making part-prepayments or foreclosing the loan early. This can reduce interest outgo and improve financial stability.

Conclusion

Small ticket business loans are a game-changer for Indian startups and small enterprises. They offer quick access to funds without complex formalities, making them ideal for managing cash flow, expanding operations, or handling emergencies. With minimal documentation, flexible repayment options, and competitive interest rates, these loans provide much-needed financial support to new businesses. However, while taking a loan is easy, managing repayments efficiently is key to long-term financial success. By choosing the right lender, planning your EMI structure, and ensuring timely payments, you can leverage small ticket business loans to grow your business while maintaining financial discipline.