Business loans are one of the most popular ways to fund your business, especially when you’re just starting or need extra capital to finance an expansion.
Many banks and private lenders, offer different kinds of business loans in Pakistan, that you can apply for online and get approved within days.
It’s important to carefully research your options before applying for a business loan in Pakistan so you know which business loan fits your company best in terms of interest rates, repayment period, and security requirements.
In this article, we have enlisted top welfare organizations and banks that provide small business loans in Pakistan without collateral or at minimum requirements. So, let’s explore business loan opportunities without further delay!
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Business Loan In Pakistan | Small Business Loan In Pakistan Without Collateral
Table of Contents
- Business Loan In Pakistan | Small Business Loan In Pakistan Without Collateral
- Government Loans For Small Business In Pakistan
- Top 3 Welfare Organizations In Pakistan To Get Small Business Loan In Pakistan
- Best Banks To Get Loan For Business In Pakistan
- What Type Of Business Financing Is Right For Me?
Government Loans For Small Business In Pakistan
In Pakistan, various government initiatives have been established to provide financial support to small businesses through loan programs e.g.
- Prime Minister’s Youth Business & Agriculture Loan Scheme (PMYB&ALS)
- Kamyab Jawan Program | Prime Minister’s Youth Entrepreneurship Scheme (YES).
These initiatives offer entrepreneurs the opportunity to secure loans ranging from PKR 5 Lakh to 75 Lakh (in some cases PKR 25 Million i.e. PKR 2.5 Crores), catering to a diverse spectrum of business needs.
The repayment tenure for these loans extends up to 10 years, providing flexibility for business owners to manage their financial obligations effectively.
These programs empower and encourage the growth of small businesses by providing accessible funding solutions that can pave the way for long-term success.
How To Apply For Government Loans For Small Businesses
Here is how you can apply for small business loans through Government Programs:
- Research Government Programs: Begin by conducting thorough research online to identify government-sponsored small business loan programs. Visit the official websites of relevant government agencies to gain comprehensive insights into the available initiatives, their eligibility criteria, and application procedures.
- Choose a Preferred Bank: In cases where these programs are facilitated through private banks, carefully select the bank that aligns with your preferences and requirements. Opt for a nearby branch to facilitate easier communication and collaboration throughout the application process.
- Application Submission: After identifying the suitable program and bank, proceed to submit your loan application through the chosen bank. Ensure that you complete all the required application forms accurately and attach any necessary documents as per the program’s guidelines.
- Await Approval: Once your application is submitted, the bank’s evaluation process will begin. This entails a thorough assessment of your business plan, financial stability, and adherence to the program’s criteria. Patiently await their decision on whether your loan application has been approved.
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Top 3 Welfare Organizations In Pakistan To Get Small Business Loan In Pakistan
Akhuwat Foundation Business Loan
Loan Amount: Akhuwat Foundation offers interest-free business loans to individuals in need. The loan amount can vary based on the applicant’s requirements and the Foundation’s evaluation.
Key Services: Beyond financial support, the Akhuwat Foundation emphasizes the concept of “Qarz-e-Hasna” (interest-free loan) to empower individuals and foster sustainable business growth. They also provide financial literacy and training to enhance entrepreneurial skills.
Pakistan Poverty Alleviation Fund Interest-free Business Loan
Loan Amount: The Pakistan Poverty Alleviation Fund (PPAF) provides interest-free loans to help entrepreneurs establish and expand their small businesses. The loan amount is tailored to the applicant’s needs and business plan.
Key Services: PPAF not only extends financial assistance but also focuses on social and economic empowerment. They collaborate with various partners to provide training, capacity building, and access to markets, enabling recipients to develop well-rounded businesses.
Alkhidmat Foundation Business Loan
Loan Amount: Alkhidmat Foundation offers microfinance services, including small business loans, to deserving individuals. The loan amount varies depending on the nature of the business and the applicant’s repayment capacity.
Key Services: Along with financial aid, Alkhidmat Foundation provides a range of support services to borrowers. These include training, skill development, and mentorship, ensuring that recipients are equipped to manage and grow their businesses effectively.
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Best Banks To Get Loan For Business In Pakistan
There are many banks in Pakistan that provide loans for small businesses. But, we have shortlisted our top 3 banks to get loans for business in Pakistan. Here are the details:
Standard Chartered Small Business Loan
Maximum Financing: Standard Chartered is regarded as one of the best banks for small business loans in Pakistan, offering substantial financial assistance. Businesses can obtain loans with a maximum financing limit of up to PKR 50 Million.
Age Limit: Applicants are typically required to be within the age range of 45 to 60 years to be eligible for a small business loan from Standard Chartered.
Meezan Bank Small Business Loan
Maximum Financing: Meezan Bank extends support to both Small and Medium Enterprises (SMEs). SMEs can access loans with a maximum financing limit of PKR 15 Million.
Medium Enterprises (ME): Medium-sized enterprises are also eligible for loans of up to PKR 25 Million from Meezan Bank.
Age Limit: Applicants should ensure that their age does not exceed 60 years to be eligible for a small business loan from Meezan Bank.
Bank Alfalah Small Business Loan
Loan Amount and Status: Bank Alfalah offers small business loans to a wide range of applicants, catering to both startups and established businesses. The loan amount varies based on the applicant’s financial status and business plan Maximum financing limit for small business startups is PKR 15 Million.
Age Limit: Small business loans are accessible from Bank Alfalah for applicants up to the age of 60 years.
(Note: Carefully review the terms and offerings of these banks to find the best fit for one’s business needs.)
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What Type Of Business Financing Is Right For Me?
Before you apply for a business loan in Pakistan, it’s important to understand the different types of financing available and which one is right for your business.
The four main types of business loans are lines of credit, term loans, SBA loans, and merchant cash advances. Each has its own eligibility requirements, terms, and repayment options.
Term loans typically have higher rates than lines of credit but offer lower monthly payments. A business can also choose to repay a term loan in full at any time without incurring an early termination fee.
Lines of Credit
Lines of credit are generally cheaper than term loans but must be repaid on a schedule that matches the company’s operating needs.
SBA & Merchant Cash advance
A small business with little or no collateral may be eligible for an SBA or merchant cash advance if they need quick access to capital upfront.
Businesses should weigh their financial needs and look at all possible financing sources before deciding on one type of loan over another.
For more information about business finance solutions, contact our lending experts today!
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What Is A Good Credit Score?
A good credit score is essential to obtain a business loan in Pakistan. The minimum credit score required to apply for a business loan in Pakistan is 650.
To get the best interest rate on your loan, you should aim for a credit score of 700 or higher. A good credit score shows lenders that you’re a responsible borrower who is likely to repay your loan on time.
A high credit score can also help you save money on interest and get access to more favorable loan terms.
If your credit score is below 650, you may still be able to get a business loan, but you’ll likely pay a higher interest rate.
How To Improve Credit Score
You can improve your credit score by paying your bills on time, maintaining a good credit history, and using various types of credit.
How Long Does It Take To Approve My Loan Application To Get Approved?
It can take up to 30 days after you have submitted your application for a business loan in Pakistan before you get a response from the lender.
Make sure that you have all of the documents required by the lender so that they can process your application as quickly as possible.
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FAQs | Small Business Loan In Pakistan
What are the Eligibility criteria for SME Business loans?
Minimum annual Income of the business=Rs. 1500,000
Minimum annual Turnover= Rs. 4,000,000.
How can I get a 5 lakh loan without interest in Pakistan?
An easy way to get a 5 lakh loan without interest is to apply for Akhuwat Organization loans from your nearby office.
Minimum salary to get a 5 lakh loan in Pakistan?
The minimum salary to get a 5 lakh loan is Rs.15,000/- Moreover, a credit score of 750 increases the possibility of getting a loan with low-interest rates.
How much loan I can get with Rs,30,000/- salary?
To calculate the loan amount multiply your salary by 27x. e.g. with Rs,30,000/- salary, you can get 8.10 Lakhs.
Which banks in Pakistan offer small business loans with substantial financing?
Standard Chartered Bank is renowned for providing excellent small business loans, offering financing of up to PKR 50 Million for eligible businesses. They are a preferred choice due to their extensive support and financial assistance.
What is the maximum loan amount that SMEs can secure from Meezan Bank?
Meezan Bank is a reliable option for SMEs, granting loans with a maximum financing limit of PKR 25 Million. This funding can significantly aid in the growth and expansion of small and medium-sized enterprises.
How much loan support can startups and established businesses expect from Bank Alfalah?
Bank Alfalah caters to a wide range of businesses, including startups and established ventures. On average, startups and existing businesses can secure loans of up to PKR 15 Million.
What sets Standard Chartered apart as a preferred bank for small business loans?
Standard Chartered is widely considered a top choice due to its substantial loan amount of up to PKR 50 Million, making it an ideal option for businesses seeking significant financial support.
Meezan Bank’s SME and ME business loan maximum limit?
Meezan Bank caters to both Small and Medium Enterprises (SMEs).
Small Enterprises can get up to PKR 15 Million as a business loan from Meezan Bank.
While Medium Enterprises can also secure loans of up to PKR 25 Million from Meezan Bank.
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