Want to take business loan without having ITR? Do not worry.
Budding entrepreneurs and first-time business owners may not possess sufficient business experience to file ITR. It does not depict that they are not eligible to get business loans to start their own enterprises. In today’s banking and financial markets there are numerous private and public sector banks, NBFCs and MFIs that offer business loans at competitive interest rates with flexible repayment options. However, to get business loans at lower interest rates, you need to file ITR to meet the working capital requirements of your business.
With the emergence of Start-up enterprises, Small Scale Industries (SSIs) and Micro, Small and Medium Enterprises (MSMEs), the requirements of business loans have increased steeply. Therefore, to avail business loans at attractive interest rates, you need to have strong ITR along with you also need to maintain good credit score. Before sanctioning any business loan, financial institutions check your financial statements, ITR documents, income proofs, credit score, and identity, address and business address proofs.
Business Loan Eligibility without having ITR
- Individuals, Companies, Traders, Retailers, Manufacturers, Limited Liability Partnerships (LLPs), Partnerships, Sole Proprietorships, NGOs, Trusts, Co-Operative Societies, etc. are eligible to avail business loans
- Start-up enterprises, first-time business owners and self-employed professionals are also eligible
- Minimum age criteria: 18 years at the time of loan application
- Maximum age criteria: 65 years at the time of loan maturity
- Loan Amount: Minimum of Rs. 10,000 and maximum up to Rs. 10 crore or more, depending on business requirements and applicant’s profile
- Credit Score: Above 700, as close to 900 is considered good
- Co-applicant: Optional, as per applicant
- Turnover: Defined by lender, varies from bank to bank
- Collateral: Not required (excluding equipment finance, bill discounting, letter of credit, etc.)
Business loans without ITR are sometimes difficult to get from private and public sector banks, as there are only few financial institutions that offer business loans without checking your ITR. For individuals who do not have ITR can approach NBFCs and MFIs to get business loans, but the interest rate offered by these financial institutions are comparatively on higher side. Another alternative to avail business loan without ITR or income proof is loan against property.
Business loans can be used to various business purposes like business expansion, buying plant & machinery, purchasing land or office space, buying raw materials, enhancing stocks and inventory, paying-off salaries, debt consolidation, hiring new staff, undertaking training programs and many more.
Below mentioned are the documents required to avail business loan without ITR:
- Duly filled application form
- Passport-sized photographs
- Well documented Business plan
- Identity Proof: Voter’s ID card, passport, driving license
- Business existence and address proof
- PAN card of company, individual or partnership(s), whichever applicable
- Residence Proof: Driving License, voter’s ID card, passport, electricity bill, bank statement, rent agreement, etc.
- Company’s Incorporation Certificate
- Partnership Deed or MoA (Memorandum of Association)
- Shops and Establishment Certificates and Rent Agreement
- Current Account bank statement
Entrepreneurs who want to take business loans without ITR can also check and compare various loan schemes introduced by Government of India in past few years, such as Mudra Loan under Pradhan Mantri Mudra Yojana (PMMY), Prime Minister’s Employment Generation Programme (PMEGP), National Small Industries Corporation (NSIC) Subsidy, PSB Loans in 59 minutes, Stand-up India, SIDBI Make in India Soft Loan Fund for MSMEs (SMILE), etc. Almost every loan scheme is offered without any collateral or security and for regarding loans without ITR, you can visit the official website of these schemes.
Every financial institution offers business loans with their own terms and conditions. Therefore, it is always recommended to check and compare the rate of interest, repayment tenure, foreclosure charges and loan amount before finalizing on the loan deal and lender that suits your business requirements.
Credit score always plays a vital role in getting you a business loan at low interest rate, even if you do not have ITR to submit. Credit score depicts the creditworthiness and repayment capacity of an applicant, any CIBIL or credit score more than 700 and closer to 900 is considered good by banks and NBFCs. Credit score does not changes overnight, as it take few months to reflect the changes that is generated by credit bureaus from your financial documents provided by your bank to credit bureaus. However, if maintained well can showcase good results by helping you in getting a business loan to meet your urgent cash requirements, enhancing your cash flow or meeting working capital needs.
Q. How much ITR is required for a business loan?
Ans. There is no specific ITR amount mentioned by the lender for business loan. However, more the ITR is; increased are the chances of getting a loan at lower interest rate.