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How to Start a Transport Business and Secure Financing

Learn how to start  your transport business and secure funding with simple, step-by-step guidance.

Starting your own transport business can give you financial independence and long-term growth. But to succeed, you need the right plan, proper registration, and access to funding. Whether you're aiming to offer goods transport, taxi services, or delivery logistics, knowing how to start a transport business and how to fund it will help you avoid costly mistakes. This guide walks you through your options, steps to register, and the best ways to get a transport business loan. With careful planning and government support, you can build a transport service that runs smoothly and stays profitable.

Types of Transport Businesses You Can Start

Choosing the right transport business helps you start with confidence and grow faster based on your skills and budget. Here are some profitable transport business ideas to help you decide:

Goods Transport Services

You can move goods locally or between cities using trucks, tempos, or vans. This business offers steady demand from shops, factories, and wholesalers.

Taxi or Cab Services

Start a private taxi service or join a ride-hailing platform. It works well in cities and near airports or railway stations.

Packers and Movers

You help families or offices move their belongings safely. It includes transport plus packing and unloading support.

Courier and Delivery Services

Deliver small parcels, groceries, or medicines using bikes or vans. This business suits urban areas with high online shopping demand.

School or Staff Transport

Use vans or mini-buses to provide regular rides to students or employees. It offers daily earnings and steady demand during weekdays.

Auto-rickshaw Services

Run short trips in towns or cities where public transport is limited. It needs low investment and brings quick returns.

Logistics or Fleet Services

Manage a group of vehicles and work with companies to move goods regularly. This model suits experienced operators with more capital.

Specialised Transport

Offer services like cold-chain delivery, bulk material shifting, or vehicle towing. These services need specific tools or vehicle types but offer higher profit margins.

Step-by-step Process to Start a Transport Business in India

Starting a transport business may seem challenging, but following the right steps makes the process simple and manageable. Here are the key steps you need to follow to start your transport business in India:

Choose Your Transport Type

Choose whether you want to transport goods, passengers, or offer delivery services based on your skills and local demand.

Make a Business Plan

Include cost estimates, target customers, route planning, marketing ideas, and expected income to guide your decisions.

Register Your Business

Choose a structure like sole proprietorship, partnership, or private limited company and register it with the Ministry of Corporate Affairs.

Get Licences and Permits

Apply for a commercial driving licence, vehicle permits, GST registration, and other documents required by local transport authorities.

Buy or Lease Vehicles

Select vehicles based on your business type—trucks, vans, autos, or cars—and ensure they meet regulatory standards.

Hire Drivers and Staff

Choose experienced drivers with valid licences and hire helpers or office staff if needed.

Set Up Operations

Use tools like GPS, transport software, or mobile apps to manage bookings, payments, and deliveries efficiently.

Promote Your Services

Promote your business online through social media, local ads, and word of mouth to attract clients.

Registration and Licensing for a Transport Business

Getting the right registrations and licences helps you avoid penalties and run your transport business legally. Here are the key approvals and documents you must secure before starting operations:

Business Registration

You must register your business with the Ministry of Corporate Affairs (MCA) under the correct structure—sole proprietorship, partnership, LLP, or private limited. This makes your business official and helps in opening bank accounts or applying for loans.

PAN and GST Registration

A PAN card is needed for all financial transactions, and GST registration is required if your annual turnover exceeds ₹20 lakh. GST also helps you claim tax input on fuel, vehicle maintenance, and business expenses.

Commercial Vehicle Registration

All vehicles used for transport must be registered as commercial vehicles. You'll receive a special registration number, and the vehicle must meet safety and emission norms set by the RTO.

Vehicle Fitness Certificate

This certificate proves your vehicle is roadworthy and safe for public use. It's issued by the RTO after inspection and is valid for a specific time, after which it must be renewed.

Goods or Passenger Permit

A goods carriage permit is needed for transporting goods, while a passenger carrier permit is required for taxis, buses, or vans. These are issued by the local or state transport authority depending on your business type.

National Permit (If Operating Across States)

For interstate transport, especially for trucks and goods carriers, a national permit is required. It allows you to legally carry goods between states without needing separate state permits.

Road Tax and Insurance

You must pay road tax at the time of vehicle registration. Commercial vehicle insurance is also mandatory and protects you against damages, accidents, or third-party claims.

Pollution Under Control (PUC) Certificate

All commercial vehicles must pass an emission test and hold a valid PUC certificate. This ensures your vehicle meets pollution standards and avoids fines during road checks.

Cost of Starting a Transport Business in India

Starting a transport business in India requires thorough financial planning. Factors such as the city location, type of services offered, and the scale of operations can significantly influence your investment needs. The following cost analysis below provides a structured estimate for Tier-1, Tier-2, and Tier-3 cities, highlighting how these elements affect the overall capital requirements.

Tier Classification and Cost Factors

  • Tier 1 Cities: Cities like Mumbai, Delhi, and Bengaluru have high real estate and operational costs, which significantly increase expenses for setting up a transport business.

  • Tier 2 & Tier 3 Cities: Cities such as Jaipur, Kochi, Patna, and Indore offer more affordable property and operational costs, reducing the overall capital required for establishing a transport business.
City Tier Small-scale Transport Operations (₹) Medium-scale Transport Operations (₹) Large-scale/Commercial Transport (₹)

Tier 1

₹20–50 Lakhs

₹50–1 crore

₹1–3 crores

Tier 2

₹10–25 Lakhs

₹25–50 Lakhs

₹50 Lakhs – ₹1 crore

Tier 3

₹5–15 Lakhs

₹15–30 Lakhs

₹30–60 Lakhs

Disclaimer: These cost estimates are indicative and for guidance purposes only. Actual investment requirements may vary depending on factors such as location, fleet size, service type, property terms, and market conditions. It is advisable to consult industry experts for accurate budgeting and detailed financial planning.

Financial Planning and How to Get Funding for Your Transport Business

Planning your finances from the start helps you control costs, reduce risk, and avoid cash flow issues. Here are the key elements to include in your financial plan:

Cost of Vehicles, Permits, and Insurance

You must account for the upfront cost of buying or leasing vehicles, getting permits, and paying for mandatory commercial insurance.

Driver Salaries and Staff Costs

Include monthly salaries for drivers, cleaners, and support staff, along with any bonuses or training costs.

Fuel, Maintenance, and Toll Charges

Calculate daily running costs, including fuel prices, regular maintenance, and tolls for routes you’ll frequently use.

Office Rent and Software or GPS Tools

If you run operations from an office, factor in rent and expenses for tools like transport management software or GPS systems.

Emergency Fund for Repairs

Set aside money for unexpected breakdowns, repairs, or spare parts to avoid delays and service disruption.

Why You Might Need a Transport Business Loan

Transport businesses need steady cash and big upfront spending to grow or get started. Here are situations where a transport business loan can help:

Buying or Upgrading Vehicles

Whether you're adding your first vehicle or replacing older ones, a loan helps you invest in better, more efficient transport without draining your savings.

Paying for Registration, Permits, and Insurance

Legal requirements like commercial registration, permits, and insurance often come with high upfront costs, which a loan can cover immediately.

Setting Up Office Space or a Garage

You may need funds to rent or build a base for operations, repairs, or customer service—essential for running your business smoothly.

Hiring Drivers or Buying Tracking Tools

Loans help you pay staff salaries or invest in essential tech like GPS and transport software to improve safety and efficiency.

Expanding to New Areas or Services

When your business grows, you may need money to enter new markets, add delivery routes, or launch new services without delay.

Key Benefits of Taking a Business Loan on Bajaj Markets

High Loan Amount

Access financing assistance of up to ₹50 Lakhs to expand your operations, upgrade infrastructure, or meet urgent business requirements.

Quick Approvals

Get your loan application processed and approved rapidly online, saving valuable time and enabling you to commence or scale your business faster.

Zero Collateral

Borrow funds without the need to pledge personal or business assets, ensuring you can access finance without risking property or investments.

Competitive Interest Rates

Enjoy affordable repayment options with interest rates starting at 14% p.a. and flexible tenures of up to 96 months.

Variants of Business Loan

Choose between a term loan for fixed needs or a flexi business loan for ongoing cash flow support as your business grows.

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Loan Offers and Interest Rates from Different Lenders on Bajaj Markets

Here you can compare loan offers and rates from top lenders on Bajaj Markets for your transport business:

Available Offerings Minimum Interest Rate Maximum Tenure

Aditya Birla Capital UDYOG PLUS Business Loan

22% p.a.

36 months

Ambit Finvest Business loan

20% p.a.

36 months

AYE Finance Business loan

29.50% p.a.

30 months

Bajaj Finance Business loan

14% p.a.

96 months

FlexiLoans Business loan

18% p.a.

42 months

IIFL Finance Business loan

16.50% p.a.

48 months

InCred Business loan

24% p.a.

60 months

Indifi Business loan

22% p.a.

36 months

KreditBee Business loan

18% p.a.

36 months

Lendingkart Business loan

19.20% p.a.

36 months

Protium Business loan

20.5% p.a.

36 months

Credit Saison Business loan

22% p.a.

36 months

UGRO Capital Business loan

24% p.a.

72 months

L&T Finance Business loan

15.50% p.a.

60 months

Godrej Capital Business Loan

16% p.a.

72 months

Disclaimer: The interest rates, loan tenures, and offers listed are indicative and may vary based on lender discretion and applicant eligibility.

Required Documents and Eligibility for a Business Loan on Bajaj Markets

Meeting the right eligibility criteria and keeping your documents ready can improve your chances of quick approval. Here’s what you need to qualify for a transport business loan on Bajaj Markets:

Eligibility Criteria

Lenders look for stability, creditworthiness, and legal proof of business to approve your loan application. Here are the basic requirements:

  • You must be an Indian citizen aged between 21 and 60 years

  • Your business should be legally registered as a sole proprietorship, partnership, LLP, or private limited company

  • It should be running for at least one year to prove operational stability

  • You should have a minimum annual turnover of ₹1.5 lakh as shown in your income tax returns

  • A healthy CIBIL score is required to reflect good credit and repayment history

  • You must be self-employed—either as a professional (e.g. doctor, CA) or a non-professional (e.g. trader, retailer, or service provider)

Required Documents

Submitting the correct documents helps speed up loan approval and ensures smooth processing. Keep the following documents ready:

  • Identity Proof: PAN card, Aadhaar card, voter ID, passport, or driving licence

  • Address Proof: Aadhaar card, passport, utility bill, or rental agreement

  • Income Proof: Last 6 months’ bank statements, latest ITR, profit and loss statement, balance sheet, and income report (for the past 2 years)

  • Business Proof: Proprietorship declaration, partnership deed, or incorporation certificate (for LLP or private limited companies)

Credit Score & Company Credit Report (CCR) for a Business Loan to Start a Transport Business

When applying for a business loan to start a transport business in India, lenders generally require a strong personal CIBIL score. A score of 700 or above is preferred as it demonstrates consistent repayment habits and lowers credit risk, helping secure better loan terms and lower interest rates. In addition to personal credit history, lenders also review the Company Credit Report (CCR) if the business is registered as a company or partnership. The CCR, provided by credit bureaus like TransUnion CIBIL, details the company’s credit exposure, repayment patterns, and includes a CIBIL Rank on a scale of 1 to 10, with Rank 1 being the highest creditworthiness. Lenders use both the personal CIBIL score and the company’s CCR to assess overall financial strength. Maintaining timely repayments, limiting overdue accounts, and ensuring compliance with regulatory obligations can significantly improve your chances of loan approval.

How to Apply for a Business Loan on Bajaj Markets

Here you can apply for a business loan quickly and securely through a 100% online process:

  1. Begin your loan application by clicking on the ‘CHECK ELIGIBILITY’ button located at the top-right corner.

  2. Fill in your personal and business details as requested in the online form.

  3. Choose your desired loan amount and repayment tenure based on your business needs.

  4. Submit the form and complete online verification to get instant results from multiple lenders.

Government Schemes Available for SMEs and MSMEs

The Government of India has introduced several schemes to provide financial assistance and support to Micro, Small, and Medium Enterprises (MSMEs) in the transport sector. Below are some of the key schemes that transport business owners can explore to secure funding and enhance their operations.

Central Government Schemes for Transport MSMEs

Scheme Name Description

Pradhan Mantri Mudra Yojana (PMMY)

Provides collateral-free loans up to ₹10 Lakhs to micro and small businesses, including truck operators, under three categories: Shishu, Kishor, and Tarun.

Credit Guarantee Fund Trust for MSMEs (CGTMSE)

Offers collateral-free credit guarantees to micro and small enterprises, facilitating easier access to loans for purchasing vehicles and equipment.

Stand-Up India Scheme

Supports SC/ST and women entrepreneurs with loans between ₹10 Lakhs and ₹1 crore for setting up greenfield enterprises in manufacturing, services, or trading sectors, including logistics.

Prime Minister’s Employment Generation Programme (PMEGP)

Provides subsidies for setting up new micro-enterprises, including transport businesses, with a focus on job creation.

Self-Reliant India Fund Scheme

Equity funding for MSMEs with growth potential, aiding in scaling operations and modernising fleets.

Technology Upgradation Fund Scheme (TUFS)

Supports investment in modern technology and equipment, helping trucking businesses upgrade their fleets for better efficiency.

State Government Schemes for Transport MSMEs

State Scheme Name Description

Andhra Pradesh

ReSTART Scheme

Provides financial assistance to MSMEs affected by natural calamities, including transport businesses, for revival and growth.

Uttar Pradesh

One District One Product (ODOP)

Promotes district-specific products and services, offering support to transport businesses involved in local logistics.

Maharashtra

Maharashtra State Transport Scheme

Offers subsidies and incentives for setting up transport businesses, including freight services, to boost local economy.

Tamil Nadu

Transport Infrastructure Development Fund

Provides financial support for developing transport infrastructure, benefiting trucking businesses with improved facilities.

Gujarat

Gujarat Transport Subsidy Scheme

Offers subsidies for purchasing new vehicles and upgrading existing fleets for transport businesses.

Karnataka

Karnataka Logistics Policy

Aims to promote logistics and transport services, offering incentives for setting up and expanding trucking businesses.

Disclaimer: These Central and State Government schemes may or may not be applicable for securing business funds for starting a transport business in India. It is essential to review the eligibility criteria, terms, and conditions of each scheme before applying to ensure it meets your business needs.

Conclusion

Starting a transport business requires careful planning, legal compliance, and access to reliable funding. Learning how to start a transport business in India helps you make informed decisions from day one. By choosing the right service, managing costs, and exploring loan options or government schemes, you can set up a strong foundation. With the right approach, you can launch, run, and grow a successful transport business that meets demand and delivers long-term returns.

Frequently Asked Questions

How much money do I need to start a transportation business?

Starting a transport business in India requires an initial investment ranging from ₹5 Lakhs to ₹50 Lakhs, depending on the type of service. For instance, setting up a taxi service may cost around ₹5 Lakhs per vehicle, while a bus service could require ₹20 Lakhs or more per bus.

The most profitable transportation businesses in India include logistics and freight transportation, taxi services, and courier and delivery services. These sectors benefit from consistent demand, scalability, and the growth of e-commerce, making them lucrative options for entrepreneurs.

The annual income of a transport business in India varies widely based on scale and operations. Small-scale businesses may earn between ₹6 Lakhs to ₹12 Lakhs per year, while larger operations with a fleet can generate ₹50 Lakhs to ₹1 crore annually.

The most common transport services include goods delivery, passenger transport, courier and logistics, and specialised transport like refrigerated or bulk cargo.

Yes, it can be profitable if you manage costs well, maintain your vehicles, and offer reliable service in high-demand areas.

You need a registered business, valid permits and licences, commercial vehicles, and a clear transport business plan to begin.

Profit margins usually range from 10% to 25%, depending on your costs, pricing, and the type of service you offer.

You need licensed drivers, a supervisor or manager, support staff for operations, and someone to handle customer service or accounts.

No, transport businesses can also include passenger services, courier delivery, and specialised logistics depending on your business model.

Start with what fits your budget and experience—many begin with goods transport or cab services before expanding into other areas.

Yes, if you have proper systems, staff, and funding, you can run multiple services like goods and passenger transport together.

The four main types are road, rail, air, and water transport—each serving different needs based on speed and volume.

Choose your service type, register your business, get the necessary licences, secure funding, and start with one or more vehicles.

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