Can I get a loan to start a business from scratch?
Commercial banks almost never issue business loans to a start-up with no track record; they want to see 6–12 months of turnover. The realistic routes are state support (subsidised loans from the Entrepreneurship Development Fund, KOBIA programmes), a secured loan (real estate, car), a personal consumer loan on official income, or a small guaranteed loan. A business plan and an own-funds share (20–30%) raise the odds.
The name "business loan" is misleading: a bank's business loan is issued against an existing business's turnover, not a new idea. For newcomers the funding sources are different and each has its own conditions. State funds are the cheapest but most bureaucratic route; a personal loan is the fastest but limited in amount; collateral gives the largest amount but puts the risk on you. Below we explain each source, its conditions and typical mistakes.
What you need
- 1 State subsidised loan: registered entrepreneur (tax ID), business plan, project within the fund's priority sectors, collateral or guarantee
- 2 Secured bank loan: titled real estate or a car, valuation
- 3 Personal consumer loan: official income (while you still have a job) and clean history
- 4 In all cases: an own-funds share (20–30%) and realistic financial projections
Bank offers that fit this case
| Bank | Loan | Rate | Term | |
|---|---|---|---|---|
Yelo Bank
|
Yelo Bank Biznes Kredit | 8.9% | 59 mo. | Details |
Unibank
|
UniBank Biznes Kredit | 9% | 60 mo. | Details |
Rabitəbank
|
Rabitəbank Biznes Kredit | 10.5% | 48 mo. | Details |
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Kapital Bank
|
Kapital Bank Biznes Kredit | 12% | 60 mo. | Details |
ABB Bank
|
ABB Biznes Kredit | 15% | 48 mo. | Details |
Access bank
|
AccessBank Biznes Kredit | 18% | 48 mo. | Details |
Expressbank
|
Expressbank Biznes Kredit | 15% | 48 mo. | Details |
Sample calculation
Estimated figures for 20 000 AZN over 36 months at ~8.9% effective rate. The exact number depends on the bank.
How to apply?
What to watch for?
- ✓ Formalise a personal loan before leaving your job; once official income is gone, borrowing gets harder.
- ✓ Entrepreneurship Development Fund loans are issued through authorised banks: discuss the project at the bank first.
- ✓ Microfinance lenders are more flexible with new businesses but charge high rates; use them only for short terms and fast turnover.
- ✓ Run the business for 3–6 months on own funds or a small loan to build turnover; then a bank loan becomes realistic.
Frequently asked questions
What is the rate on a state subsidised business loan?
Loans through the Entrepreneurship Development Fund are around 5% a year (lower for small projects). Terms and limits are updated periodically on the fund's website.
Is a business plan mandatory?
For state funds yes; commercial banks may accept a simple financial calculation for small amounts. A good business plan improves the amount and rate in any case.
Are there special programmes for women and young entrepreneurs?
Yes, KOBIA and some banks open subsidised lines for women's and youth entrepreneurship; terms change periodically, so check KOBIA's website and the bank.
Related questions
Useful links
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