The short answer
For an established, GST-compliant business, unsecured business loans are typically sized between 10% and 25% of annual turnover — rising with how long you have been trading. That figure is then capped by whether your cash flow can actually service the EMI.
The multiples, roughly
| Trading history | Typical share of annual turnover |
|---|---|
| 1 – 3 years | 6% – 10% |
| 3 – 5 years | 10% – 18% |
| 5 – 10 years | 15% – 22% |
| Over 10 years | 18% – 25% |
Adjustments that bite: irregular GST filing typically costs around a fifth of the figure; no GST registration costs closer to two fifths; an unregistered business is a different conversation entirely.
Worked example
A nine-year-old proprietorship, ₹1.5 crore turnover, GST filed monthly. At 15% to 22%, the turnover-based range is ₹22.5 lakh to ₹33 lakh.
Now the second test. Suppose there is an existing ₹15 lakh overdraft costing ₹20,000 a month in interest and charges. The lender assesses a monthly surplus from the business, deducts the ₹20,000, and works out what EMI the remainder supports. If that is ₹65,000 a month, at 17% over four years it supports about ₹22.5 lakh.
The offer is the lower of the two: roughly ₹22.5 lakh. And the useful insight is which test bound it — here it was the existing obligation, not the turnover. Clearing or restructuring the overdraft would move the answer up substantially. More turnover would not.
When turnover stops being the constraint
If you need more than about a quarter of your annual turnover, unsecured lending will not get you there and no amount of shopping around will change that. The routes that will:
- Property as security — sized on the property, not on turnover.
- A top-up on an existing home loan, often the cheapest money available.
- Splitting the requirement — a term loan for the asset, a working capital line for the cycle.
- Staging it — borrow in two tranches as the business grows into the first.
Free, and it does not ask for your phone number.
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