The biggest beneficiary after opening up of Indian economy has been the startup culture in the country. While Bengaluru and Hyderabad have been the early birds to have cottoned on to the startup eco-system, it is Delhi and the NCR which has rapidly joined the bandwagon and experienced exponential growth riding on several factors working in its favour, one being options for liberal startup loan in Delhi

What makes for a sustainable startup destination?

Any sustainable startup destination should offer abundant logistics of infrastructure, efficient transport system, customer demand, growing market, ample funding options, easy access to raw materials and quick product dispersal, skilled, enterprising workforce and finally, bright mentorship with future growth potential. All these factors have eminently worked in favour of Delhi and NCR. 

Factors making Delhi fertile for startups:

Statistics emerging in recent times does reflect the potential of the region. NCR which comprises of Delhi, NOIDA and Gurgaon is home to around 9000 startups of which almost 1300 are retail startups. It is the highest in the country, according to a report by Tracxn Technologies. Delhi and NCR have built their unique startup ecosystem to foster diverse verticals beyond traditional technology to foray into consumer and financial services. 

Startup business areas in Delhi:

For any business to thrive, an appropriate loan is a lifeline that boosts its growth and expansion. The principal industries that are driving the startup revolution in Delhi are:

  • E-Commerce

  • Medical Device

  • Real Estate

  • Food Processing

  • Hotel and Tourism 

  • Interior Decoration

  • Healthcare

The most significant advantage with Delhi is that it is very well connected with the catchment cities in the neighbouring states with a huge market catering to the growth of startups. The vibrant ecosystem has helped Delhi, and NCR garner almost 25% of foreign investments assisting the sector in taking giant strides. The trend is rising, and there are ample funding options in Delhi to feed the growth pattern witnessed over the last decade. 

Startup fund options:

It is a challenge for any new startup entrepreneur to raise funds for the enterprise to succeed. Funds being critical to a business venture; there are several options to the business owner to explore. Among the primary options are:

  • Looking for bank loans that have products like a small business loan in Delhi.

  • A small business loan through NBFC and Fintech

  • Crowdfunding

  • Looking for angel investors and venture capitalists. 

The top two are useful means by which startup owners can aim to fund business operations. But the documentation being stringent and cumbersome in banks, many entrepreneurs find it daunting to seek business loans from them. On the other hand, Fintechs offer customized products with minimal hassle and documentation to make it worthwhile for startup loans.

Salient features of business loan in Delhi:

The very nature of the business in its infancy makes small business loans from Fintech the most viable option. The features that make it truly attractive are:

  • Flexible and liberal in requirements and documents.

  • Transparent transactions without any hidden cost.

  • Competitive interest rate. 

  • Quick turnaround time with the disbursal of the loan in 72 hours.

  • Unsecured collateral-free loans. 

  • Easy repayment terms. 

Eligibility criteria for startup loan in Delhi:

Eligibility for startup loans varies from lender to lender. While some are stringent, Fintechs have a unique approach towards the eligibility norms for a small business loan in Delhi. Among the key factors involved are:

  • The establishment must be operational for at least six months.

  • The quarterly turnover should be more than Rs.90K.

  • The nature of business should not be blacklisted for SBA loans.

  • The location of the business should not be in a restricted area.

  • Ownership of the business can be Proprietorship, Partnership, Private Limited Company or a Limited Liability Company. 

  • The business should not belong to NGO, Charitable Institution or a Trust. 

Documents required for startup loan in Delhi:

The crucial aspect of any business loan is its documentation. The procedure prescribed in banks acts as a deterrent to many aspiring borrowers. Contrarily Fintechs confine to the essential bare minimum, making it amply suitable for a startup owner. The necessary documents required for the loan are: 

  • KYC Documents of the owner and the business which includes PAN and Aadhaar cards. 

  • Business registration certificate along with other mandatory registrations and compliances. 

  • Copies of Memorandum of Association and Articles, Partnership Deed. 

  • Bank account statement for the previous six months.

  • Income proof and any other document as determined by the lender. 

Interest rate and other charges for a business loan in Delhi:

The cost of funds is a significant concern for any borrower and startup loan in Delhi is no exception. It is imperative that the owner checks for the cost element before committing on a business loan. Let us check out what all is involved that determines the cost of funds.

Fee and Charges of Startup Loan in Delhi
Interest Rate1% to 2% per month 
Processing Fee1% to 2% of the loan amount recovered along with disbursal
Pre-payment FeeNil
Tenor Maximum 36 months 
Loan amountRs. 50000 to Rs. 2 crore
Security Nil
Repayment methodEMI and Fortnightly

The rate of applicable interest is dependent on various parameters ultimately impacting the cost of funds. Primary factors reckoned for determination of the relevant interest are:

  • Amount of Loan

  • Loan tenor

  • CIBIL Score

  • Age of the enterprise.

The application process of a startup loan in Delhi:

Most lenders now offer a digital platform for submission of the loan application. While in the case of banks, it may be termed as an expression of interest for formalities to be completed in brick and mortar offices, in Fintech, it is entirely online. The entire process can be accomplished in a few simple steps:

  • Submit application with all details online.

  • Upload requisite documents.

  • Await evaluation and offer.

  • Acceptance, approval and disbursal of loan to the credit of the account.

Bottom Line:

There is no denying the emergence of Delhi and NCR as the startup capital of India with a well defined and stable ecosystem in place. Sheer evidence of its predominance in attracting investments and its growing trend is enough evidence that the phenomenon is going to flourish further.  

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