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Updated August 2026

Secured Business Loan up to Rs 25 Crore - Lowest Rates, Longest Tenure

Pledge property, gold, FD, or machinery. Get India’s cheapest business credit at 9%+ p.a. Tenures up to 15 years. Ideal for scaling businesses that need large capital at low cost.

Rs 25 CrMax Amount
9%+Interest
15 YearsTenure
70%LTV
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What is Secured Business Loan

Secured Business Loan Explained

A Secured Business Loan is a business loan where you pledge an asset - property, gold, fixed deposit, machinery, or insurance policy - as collateral security to the lender. In return for this security, the lender takes on lower risk and passes those savings back to you in the form of dramatically lower interest rates, larger loan amounts, longer tenures, and easier eligibility.

In India, secured business lending is the largest category of business credit - accounting for over 70% of MSME loan volumes. Property-backed Loan Against Property (LAP) is the flagship product, with rates as low as 9% and amounts up to Rs 25 crore. Other secured variants - Gold Loans, OD Against FD, Machinery Hypothecation, LIC Loans - serve different collateral types and use-cases.

The trade-off is clear: you accept some asset lock-up in exchange for the cheapest, largest, and longest-tenure business credit available in the market. For growing businesses needing Rs 50 lakh+ capital, secured loans almost always win on total cost. MahadevX evaluates your collateral type + valuation + business profile against 100+ lenders’ LTV matrices and matches you to the highest LTV at the lowest rate.

Collateral Types

Types of Collateral Accepted

Different collateral types unlock different rate + amount + speed combinations. Here is the complete landscape.

Residential Property (LAP)

Most common. LTV 55%-70%. Rates 9%-13%. Tenure up to 15 years. Ideal for large capital needs.

Commercial Property (LAP)

Shop, office, warehouse. LTV 50%-65%. Rates 9.5%-14%. Some lenders prefer commercial over residential.

Fixed Deposit

90% LTV. Rate = FD rate + 1%-2%. Instant sanction. No CIBIL check. Ideal short-term liquidity.

Gold Jewellery

75%-80% LTV. Rates 9%-15%. Same-day disbursal. Popular for MSMEs in Tier-2/3 cities.

Machinery / Equipment

Machinery hypothecation. LTV 80%-90% new / 60%-75% used. Rates 9.5%-14%.

LIC / Insurance Policy

Up to 90% of surrender value. Rates 9%-11%. Only endowment/money-back policies with surrender value.

Shares / Mutual Funds

50%-60% LTV (higher haircut due to volatility). Rates 9%-13%. Some banks + specialised NBFCs offer.

Vehicle (Commercial)

Commercial vehicles + luxury cars accepted. LTV 65%-80%. Rates 10%-14%. Vehicle refinance product.

Industrial Plot / Land

Vacant industrial/commercial plot. LTV 40%-55% (lower due to non-rented nature). Rates 10%-14%.

Key Features

Why Choose a Secured Business Loan

Lowest Rates

9%+ p.a. via PSU banks - India’s cheapest business credit. 3%-8% cheaper than unsecured.

Very Large Amount

Rs 25 crore+ possible with high-value property. Ideal for very large capex.

15-Year Tenure

Property LAP goes up to 180 months - lowest EMI burden for any business loan.

Weak CIBIL Workable

Collateral offsets low CIBIL. Borrowers with 650 CIBIL still get sanctioned at moderate rates.

Relaxed ITR

NBFC LAP available without ITR. Collateral value is primary; income secondary.

Continued Use of Asset

You continue using the property/machinery. Only the title is mortgaged - not possession.

Top-Up Facility

Existing LAP borrowers get pre-approved top-ups at same rate - fast liquidity.

Business + Personal

Same collateral can back both business and personal expenses (LAP is flexible-use).

Eligibility

Secured Business Loan Eligibility

Business Vintage

Banks: 2-3 years. NBFCs: 12+ months. Startups: possible if collateral value is strong enough.

Collateral Ownership

Property must be in applicant name OR co-applicant/guarantor name (owner signs mortgage docs).

CIBIL Score

Banks: 700+ preferred. NBFCs: 650+ workable. Gold + FD OD: no CIBIL check.

Property Location

Metro / Tier-1 preferred (higher liquidity). Tier-2/3 acceptable at lower LTV. Very rural: limited options.

Clear Property Title

30-year title chain traceable. No pending litigation. Clear encumbrance certificate. Approved building plan.

Repayment Capacity

EMI-to-income (FOIR) under 50%. Business must show cash flow to service EMI comfortably.

Documents

Documents Required

Business + KYC Documents
PAN + Aadhaar of proprietor/partners/directors + co-applicant. Business PAN + GST + Udyam. 12 months current-account bank statements. 2 years ITR + audited financials. Existing loan details.
Property Documents (LAP)
Original sale deed (registered) + parent deeds tracing 30-year title chain. Property tax receipts (latest + 3 years). Encumbrance Certificate (Non-Encumbrance from Sub-Registrar). Approved building plan. Occupancy certificate (for constructed property). NOC from society/RWA. Municipal ID + electricity bill.
For Gold Loan
Gold jewellery physically pledged. KYC (PAN + Aadhaar). Photo. No other financial documents needed. Bank valuer weighs + tests gold purity on-spot. Same-day disbursal.
For FD-Backed OD
Original FD certificate. Lien-marking authorisation signed. KYC. Nothing else needed. Sanction typically same-day. Available with the bank where the FD is held.
For Machinery Hypothecation
Machinery invoice + specifications. Ownership documents. Valuation report (empanelled valuer). Insurance certificate. Location + installation details. Refer Machinery Loan sub-page for full detail.
For LIC / Insurance-Backed
Original insurance policy. Latest premium receipt. Surrender value certificate from insurer. Assignment letter to lender. Only endowment / money-back plans qualify (not term insurance).
Top Lenders

Best Lenders for Secured Business Loans

State Bank of India
Largest LAP lender in India. Best PSU rates + longest tenure (up to 180 months). Strong for large amount + Tier-1 property borrowers.
Rate9.00% - 12.50%
MaxRs 10 Cr
HDFC Bank
Best private-bank LAP product. Fast processing (20-30 days). High LTV up to 70% for Tier-1 residential. Good for existing HDFC customers.
Rate9.50% - 13.00%
MaxRs 10 Cr
Axis Bank
Competitive LAP rates + top-up flexibility. Good for Tier-2 property borrowers. Digital-forward LAP processing.
Rate9.75% - 13.50%
MaxRs 5 Cr
Bajaj Housing Finance
Best NBFC LAP LTV (up to 70%). Fast approval. Flexible for self-employed with weaker ITR profiles.
Rate10.00% - 14.00%
MaxRs 5 Cr
LIC Housing Finance
Good LAP rates + LIC policy-backed loans. Best for LIC policyholders wanting cross-product benefits.
Rate9.50% - 12.75%
MaxRs 5 Cr
Muthoot Finance
India’s largest gold loan NBFC. Instant same-day gold loans up to Rs 2 crore. Nationwide branch network.
Rate9.00% - 15.00%
MaxRs 2 Cr
Interest Rates

Secured Business Loan Rates by Collateral (August 2026)

Collateral + LenderInterest Rate (p.a.)LTVMax Tenure
Property LAP (PSU Bank)9.00% - 12.50%55% - 65%180 months
Property LAP (Private Bank)9.50% - 13.50%60% - 70%180 months
Property LAP (NBFC)10.00% - 16.00%50% - 70%180 months
OD Against FDFD rate + 1% - 2%85% - 90%FD tenure
Gold Loan9.00% - 15.00%75% - 80%36 months
Machinery Hypothecation9.50% - 14.00%80% - 90% new84 months
LIC Policy Loan9.00% - 11.00%Up to 90% of surrenderPolicy tenure
Loan Against Shares9.00% - 13.00%50% - 60%12 months (renewable)
Application Process

How to Apply for a Secured Business Loan

1

Collateral Assessment

MahadevX RM checks collateral type + LTV eligibility.

2

Lender Matching

Best rate + LTV match across 100+ lenders.

3

Documentation

Business + property/asset documents submitted.

4

Legal + Valuation

Empanelled lawyer + valuer inspect (LAP only). Skipped for gold/FD.

5

Sanction

Loan approved + terms locked in sanction letter.

6

Mortgage + Disbursal

Property mortgaged at Sub-Registrar Office. Loan credited to your account.

Pros & Cons

Is a Secured Business Loan Right for You?

Advantages

  • Lowest business loan rates (9%+)
  • Largest amounts (up to Rs 25 crore)
  • Longest tenure (up to 15 years)
  • Weak CIBIL still workable
  • Relaxed ITR (NBFC LAP)
  • Continued use of collateral
  • Pre-approved top-ups available
  • Section 37 tax deduction

Trade-offs

  • Collateral at risk in default (SARFAESI recovery)
  • Slower approval (30-60 days for LAP)
  • Legal + valuation charges (Rs 15k-40k)
  • Cannot sell asset without lender NOC
  • LTV cap (55%-70% for property)
  • Documentation heavy (title chain, EC, etc.)
Comparison

Secured Business Loan vs LAP vs CGTMSE

FeatureSecured Business LoanPure LAPCGTMSE Loan
CollateralAny asset acceptedProperty onlyNil (Gov guarantee)
Interest Rate9% - 16%9% - 14%8.15% - 13.5%
Max AmountRs 25 CrRs 25 CrRs 5 Cr
TenureUp to 180 monthsUp to 180 monthsUp to 84 months
Use of FundsBusiness onlyAny purpose (flexible)Business only
Default RiskCollateral attachedProperty attachedCIBIL + legal recovery
Best ForMulti-asset flexibilityProperty-rich borrowersMSMEs preserving assets
20 Questions

Secured Business Loan - Frequently Asked Questions

What is a Secured Business Loan?
A Secured Business Loan is a business loan where you pledge an asset (property, gold, FD, machinery, insurance policy, or vehicle) as collateral to the lender. In case of default, the lender can attach and sell the pledged asset to recover the loan. In return for this security, the lender offers you significantly lower interest rates, larger loan amounts, and longer tenures than unsecured loans.
What assets can be pledged as collateral?
Common collateral types: (1) Immovable property - residential/commercial/industrial (LAP), (2) Fixed Deposits with any bank (OD Against FD), (3) Gold jewellery / gold bonds, (4) Insurance policies with surrender value (LIC endowment plans), (5) Machinery / equipment, (6) Vehicles (commercial + luxury), (7) Shares / mutual fund units (up to 50% haircut). Property is the most common for large-amount loans.
What is the maximum amount for a Secured Business Loan?
Property-backed loans (LAP): up to Rs 25 crore at most banks; up to Rs 500 crore for very large enterprises via SBI/HDFC/Axis SME divisions. FD-backed OD: 90% of FD value. Gold loan: 75%-80% of gold value. Machinery: 80%-90% of value. Actual amount depends on collateral value + your business capacity.
What is the interest rate on a Secured Business Loan?
PSU banks: 9%-13% p.a. (India’s lowest business rates). Private banks: 9.5%-14%. NBFC LAP: 10%-16%. Gold loans: 9%-15%. OD Against FD: your FD rate + 1%-2%. Rates are 3%-6% lower than equivalent unsecured loans - the collateral reduces lender risk significantly.
What is LTV (Loan-to-Value) ratio?
LTV is the loan amount as a percentage of collateral value. Property LAP: 55%-70% LTV (lender lends 60% of Rs 1 crore property = Rs 60 lakh loan). Gold: 75%-80%. FD: 85%-90%. Machinery new: 80%-90%. Machinery used: 60%-75%. Lower LTV = safer for lender = better rate for you.
How does the LAP (Loan Against Property) process work?
(1) You approach lender with property + business docs. (2) Lender does credit assessment + technical valuation (physical inspection by empanelled valuer) + legal opinion (title check by empanelled lawyer). (3) Sanction letter issued with LTV + rate + tenure. (4) You sign loan + mortgage documents. (5) Property registered as mortgaged at Sub-Registrar Office. (6) Disbursal to your account. (7) Property continues to be your possession + use - only the title is mortgaged.
What is the tenure for a Secured Business Loan?
Property LAP: up to 15 years (180 months) at most banks. FD-backed OD: matches FD tenure. Gold loans: 12-36 months. Machinery: 3-7 years. LAP has the longest tenure of any business loan product - which is why EMIs are manageable even for very large loan amounts.
What are the legal + valuation charges for a Secured Business Loan?
Property loans: legal opinion Rs 5,000-15,000 + technical valuation Rs 5,000-25,000 (depends on property value). Machinery: valuation Rs 5,000-20,000. Gold: nil (bank valuer weighs on-spot). FD: nil. Charges are borne by borrower + non-refundable regardless of loan outcome. Some lenders bundle these into total processing fee.
Can I sell the pledged property during the loan?
Only with lender NOC (No Objection Certificate). Since the property is mortgaged, you cannot legally transfer ownership without discharging the loan. Options: (1) Foreclose the loan first, then sell. (2) Buyer pays your outstanding directly to lender at sale, lender gives NOC. (3) Portability - shift the loan to buyer if buyer qualifies (rare, complex).
What happens if I default on a Secured Business Loan?
The lender follows a defined recovery path under SARFAESI Act 2002: (1) Loan classified NPA after 90 days overdue. (2) Demand notice for full outstanding. (3) 60-day cure period. (4) Physical possession of pledged asset (via police support if needed). (5) Auction of asset. (6) Recovery of dues; surplus (if any) returned to borrower. Property is at real risk in a default scenario - never take secured loans lightly.
What documents are required for a Secured Business Loan?
Business KYC + financial docs (same as unsecured). Additional property-specific: complete title chain (sale deed + parent deeds 30 years), property tax receipts, encumbrance certificate, approved building plan, occupancy certificate (for constructed property), NOC from society/RWA. For gold: gold + KYC only. For FD: FD certificate + lien-marking authorisation.
How long does a Secured Business Loan take to approve?
FD-backed OD: same day (no valuation needed). Gold loan: 1-2 hours. Machinery hypothecation: 15-30 days. Property-backed LAP: 30-60 days (legal + valuation add 2-4 weeks). PSU bank LAP: often 45-60 days; private bank + NBFC LAP: 20-30 days.
Can I get a Secured Business Loan with low CIBIL?
Yes - collateral partially offsets low CIBIL. A property-backed LAP borrower with 650 CIBIL can still get sanctioned at higher rates (12%-15% vs 9%-11% for 750+ CIBIL). Gold loans and FD OD do not check CIBIL at all - only asset value matters. This is the key advantage of secured loans for weak-CIBIL borrowers.
What is the difference between LAP and Home Loan?
Home Loan is specifically for buying/building a residential property (asset acquisition). LAP is any-purpose loan against your existing property (asset monetisation). Home loans have lower rates (8%-10%) + longer tenure (30 years) + higher LTV (up to 90%) because RBI classifies them as retail housing. LAP is a business/personal loan with 55%-70% LTV.
Can property in someone else’s name be pledged?
Yes - the property owner must be a co-applicant/co-borrower or provide a third-party mortgage (guarantor). Common structures: father’s property pledged with son as primary borrower (father becomes co-applicant), or spouse’s property with joint loan. The owner must sign mortgage documents and consent to potential auction on default.
Which banks are best for Secured Business Loans?
For lowest LAP rates: SBI, HDFC Bank, Axis Bank, Bajaj Housing Finance (rates 9%-11%). For high LTV: LIC Housing, Bajaj Housing (up to 70%). For fast NBFC LAP: Tata Capital, Aditya Birla Finance, Piramal Housing. For OD Against FD: any bank where you have the FD. For gold: Muthoot Finance, Manappuram, and any PSU/private bank.
Can I get a Secured Business Loan without ITR?
Yes - one of the biggest advantages of secured lending. Since the collateral is the primary security, some lenders (especially in LAP + gold + FD OD) offer relaxed ITR requirements. NBFC LAP without ITR is available for self-employed with 20%-25% higher pricing. Bank LAP typically still asks for at least 1 year ITR.
Can I prepay my Secured Business Loan?
Yes. For floating-rate secured loans - RBI mandates nil prepayment charges. For fixed-rate LAP: 2%-4% of prepaid amount, often reducing over tenure. Gold + FD loans: nil charges. This flexibility lets you close the loan early if business improves - freeing your property/asset back.
Are Secured Business Loan interest payments tax-deductible?
Yes - fully deductible as business expense under Section 37(1) if loan is used for business purposes. Home loan tax benefits (Section 80C + 24B) do NOT apply to LAP even if pledged property is your home - because LAP is treated as a business loan. Interest on personal-use component is not deductible.
How can MahadevX help me get a Secured Business Loan?
MahadevX evaluates your collateral type + value + business profile against 100+ lenders’ LTV + rate matrix, identifies which bank/NBFC gives the highest LTV at lowest rate for your specific case, coordinates legal + valuation, and manages end-to-end till mortgage registration + disbursal. Service is free - lenders pay us on disbursal.
Related

Related Loan Types

Unsecured Business Loan CGTMSE Loan Machinery Loan MSME Loan Term Loan Overdraft Facility
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