Securing a business loan can provide the financial boost your company needs for expansion, equipment purchase, or working capital. However, lenders have specific business loan eligibility criteria that applicants must meet.
At Today Finserv Consulting India, we simplify the loan application process by helping you understand and meet these requirements. Let’s explore the key eligibility factors for obtaining a business loan in India.
Key Business Loan Eligibility Criteria
1. Business Age & Type
- Most lenders require a minimum business vintage of 6 months to 3 years
- Both proprietorships and registered businesses (LLPs, Pvt. Ltd.) are eligible
- Startups may need to show strong business plans or collateral
2. Credit Score Requirements
- Minimum CIBIL score of 650 (preferably 700+) for most lenders
- Business credit score also considered for established companies
- Lower scores may require collateral or higher interest rates
3. Annual Turnover
- Varies by lender and loan amount
- Typically Rs. 10 lakhs+ annual turnover for unsecured loans
- Higher turnover requirements for larger loan amounts
4. Financial Documents
- Bank statements (6-12 months)
- Income Tax Returns (ITR) for 2-3 years
- Balance sheets and profit/loss statements
- GST returns for registered businesses
5. Existing Debt Obligations
- Lenders evaluate debt-to-income ratio
- Existing EMIs shouldn’t exceed 40-50% of income
- Too many active loans may reduce eligibility
Documents Required for Business Loan Application
| Document Type | Requirements |
|---|---|
| KYC Documents | PAN card, Aadhaar, address proof |
| Business Proof | Registration certificate, GST, trade license |
| Financial Records | Bank statements, ITRs, audited financials |
| Ownership Proof | Partnership deed, MOA/AOA for companies |
How to Improve Your Business Loan Eligibility?
- Maintain a healthy credit score (650+)
- Keep financial records organized and up-to-date
- Reduce existing debt before applying
- Show consistent revenue growth
- Consider collateral for better terms
FAQs on Business Loan Eligibility
1. What is the minimum CIBIL score for a business loan?
Most lenders require 650+ CIBIL score, though 700+ gets better rates. Some NBFCs may accept lower scores with collateral.
2. Can I get a business loan with less than 1 year in business?
Yes, some lenders offer loans to 6-month-old businesses, but may require collateral or personal guarantee.
3. Is GST mandatory for a business loan?
For registered businesses, GST returns for 1+ years are typically required. Unregistered small businesses may qualify through alternative schemes.
4. What if my business has losses but needs a loan?
Possible with strong collateral or if you can show improving trends. Alternative lenders may consider future projections.
5. How much loan can I get based on my turnover?
Generally 10-30% of annual turnover, depending on lender policies and business profitability.
Why Choose Today Finserv for Your Business Loan?
✔ Flexible eligibility criteria tailored to your business
✔ Competitive interest rates across loan products
✔ Quick approval process with minimal documentation
✔ Expert guidance at every step
