At this size you are not filling a form, you are making a case — to a committee, through a relationship manager. And the sanction letter carries conditions that will govern how you run the business for years.
Last reviewed · Money Bharti is a loan marketplace, not a lender
At this size nobody is scoring you. A relationship manager builds a note and takes it to a credit committee, and the sanction letter that comes back carries covenants that will shape how you run the business for the next several years. Read them before you sign, because afterwards is too late.
Your file is written up as a credit note by a relationship manager and presented to a committee that has never met you. That has one practical consequence worth internalising: the manager is arguing your case, and can only argue what you have given them.
So the useful preparation is not a thicker file, it is a clearer one. A short covering note explaining what the money is for, how it will be repaid, and what the obvious objections are — buyer concentration, a weak year, a related-party transaction — with your answer to each. Anticipating the committee's questions is more effective than waiting to be asked, because by the time the question comes back to you a week has gone.
Expect a site visit, a discussion about your sector, and questions about your buyers by name.
Sanction letters at this size carry conditions that bind you for the life of the facility. Common ones:
Breaching a covenant is technically an event of default even when every instalment has been paid on time. Read them, negotiate the ones that would genuinely constrain the business, and get any agreed change into the sanction letter rather than into an email.
Negotiate at sanction stage, never after
Before you sign, the lender wants your business and there is real discretion — on the processing fee, the foreclosure charge, the covenant thresholds and the security structure. After you sign, none of it moves. The single most valuable half hour in this whole process is spent going through the draft sanction letter line by line with your CA before it is accepted.
A ₹1 crore requirement is rarely one thing. Typically it is a term loan for capital expenditure, a working capital limit for the cycle, and sometimes a bank guarantee or letter of credit line on top.
Structuring these separately, each sized and priced for its own job, is materially cheaper than one large term loan — and it leaves the revolving limit available when you actually need it. The loan types page sets out which instrument does which job.
Q1. What turnover is needed for a ₹1 crore business loan?
Around ₹5 crore is typical, with the actual test being whether declared cash profit services the total obligation comfortably. Security materially changes what is possible.
Q2. Is collateral required?
Usually at this level. CGTMSE cover extends to ₹5 crore for eligible enterprises and is worth asking about, but most ₹1 crore sanctions involve property, hypothecated assets or a combination.
Q3. What are loan covenants?
Conditions in the sanction letter — ratios to maintain, restrictions on further borrowing, reporting obligations. Breaching one is an event of default even if repayments are current, so read and negotiate them before signing.
Q4. How long does it take?
Three to six weeks typically, longer where property valuation and legal opinion are involved. Preparation quality is the main variable.
Q5. Should I approach several banks?
Compare through a soft-enquiry process first, then apply formally to one or two. Multiple direct applications at this size leave hard enquiries on both credit reports and are visible to every other lender you approach.
Money Bharti assesses your financials, structure and security against the appetite of RBI-registered banks and NBFCs, so you approach lenders whose policy actually fits. Soft enquiry only.
Check my eligibilityGet a free, no-obligation eligibility check and compare real offers from 20+ RBI-regulated Banks & NBFCs — with zero impact on your credit score.
🚀 Check Your Eligibility — Free
