How to Secure a Business Loan in Nepal: Documents and Requirements (2026 Guide)

Access to finance is one of the biggest challenges for business owners in Nepal—whether you’re starting a new venture, expanding an existing business, or managing cash flow.

Banks do provide business loans in Nepal, but approvals depend heavily on documentation, compliance, creditworthiness, and preparation. Many applications fail not because the business is bad—but because the borrower is unprepared.

This comprehensive, Nepal-specific guide explains how to secure a business loan in Nepal, including eligibility, required documents, loan types, interest rates, common rejection reasons, and expert tips to increase approval chances in 2026.

Understanding Business Loans in Nepal

A business loan is financing provided by banks or financial institutions to:

• Start a business
• Expand operations
• Purchase equipment
• Manage working capital
• Import goods
• Invest in technology or infrastructure

Who Provides Business Loans in Nepal?

• Commercial banks
• Development banks
• Microfinance institutions
• Cooperative societies
• Government-supported SME programs

Types of Business Loans Available in Nepal

Understanding loan types helps you apply correctly.

1. SME / MSME Loan

Designed for small and medium enterprises.

Common uses:

• Inventory purchase
• Shop setup
• Business expansion

2. Startup Business Loan

For newly registered businesses (usually less than 2–3 years old).

Requirements are stricter, and collateral is often required.

3. Working Capital Loan

Short-term loan to manage:

• Daily expenses
• Supplier payments
• Cash flow gaps

4. Term Loan

Long-term loan for:

• Machinery
• Equipment
• Office setup
• Vehicles

5. Loan Against Collateral

• Property-backed loans
• Higher approval chances
• Lower interest rates

Basic Eligibility Criteria for Business Loans in Nepal

Most banks require the following:

• Registered business (PAN mandatory)
• Minimum business operation period (usually 1–2 years)
• Clean banking history
• Proper bookkeeping
• Clear business purpose
• Collateral or guarantor (in most cases)

Startups may still qualify, but documentation must be strong.

Required Documents for a Business Loan in Nepal

This is the most critical section. Incomplete documentation is the #1 reason for rejection.

Business Registration Documents

• Company Registration Certificate / Firm Registration
• PAN Certificate
• VAT Certificate (if applicable)
• MOA & AOA (for companies)
• Partnership deed (if partnership)

Identity Documents

• Citizenship certificate of owner/directors
• Passport (if applicable)
• Passport-size photographs

Financial Documents

• Last 2–3 years’ financial statements
• Bank statements (6–12 months)
• Tax clearance certificate
• Audit report (for companies)

Business Plan / Loan Proposal

This document often decides approval.

Must include:

• Business overview
• Market analysis
• Revenue model
• Loan amount required
• Loan utilization plan
• Repayment plan
• Cash flow projections

Collateral Documents (If Required)

• Land ownership certificate (Lalpurja)
• Property valuation report
• Tax payment receipts
• Consent letters (if joint ownership)

Interest Rates for Business Loans in Nepal (Indicative)

Loan Type Interest Rate (Approx.)

SME Loan | 9% – 13%
Startup Loan | 11% – 15%
Working Capital | 10% – 14%
Loan Against Property | 8% – 12%

Rates vary by bank, credit profile, and market conditions.

Step-by-Step Process to Secure a Business Loan

Step 1: Prepare Documents in Advance

Don’t approach banks unprepared.

Step 2: Choose the Right Bank

Different banks favor:

• SMEs
• Trade businesses
• IT & service sectors
• Manufacturing

Step 3: Submit Loan Application

Includes:

• Application form
• Document submission
• Initial screening

Step 4: Bank Evaluation

Bank checks:

• Business viability
• Creditworthiness
• Collateral value
• Cash flow

Step 5: Site Visit & Verification

Banks may visit:

• Business location
• Office/shop
• Collateral property

Step 6: Loan Approval & Agreement

Upon approval:

• Loan agreement signed
• Collateral mortgage completed
• Funds disbursed

How Much Business Loan Can You Get?

Depends on:

• Annual turnover
• Net profit
• Collateral value
• Repayment capacity

Typical Range:

• Small businesses: NPR 5–50 lakhs
• SMEs: NPR 50 lakhs – 5 crores

Common Reasons Business Loan Applications Get Rejected

• No proper financial records
• Weak or unrealistic business plan
• No collateral
• Poor banking history
• Tax non-compliance
• Mismatch between income and loan amount

Tips to Increase Business Loan Approval Chances

• Maintain clean bank transactions
• Separate personal & business accounts
• File taxes on time
• Prepare professional financial statements
• Don’t overestimate loan amount
• Build relationship with bank managers

Government & NRB Support Programs

Nepal Rastra Bank (NRB) encourages:

• SME lending
• Women entrepreneurship loans
• Youth self-employment loans

Some banks offer:

• Subsidized interest rates
• Priority sector lending

Business Loan FAQ – Nepal

Q: Can I get business loan without collateral?
Rare, but possible for small SME or microfinance loans.

Q: Do startups get loans in Nepal?
Yes, but approval is stricter.

Q: Is VAT mandatory for loan approval?
Not always, but preferred.

Q: How long does approval take?
2–6 weeks depending on bank and loan size.

Q: Can freelancers get business loans?
Yes, with PAN, income proof, and strong bank statements.