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Check your eligibility for a business loan for a low CIBIL score.
Your business needs steady funding to grow, expand, and manage daily operations. You may need capital to increase working funds, buy equipment, restock inventory, or meet short-term expenses. Timely finance keeps your business running smoothly. A low CIBIL score makes getting a business loan difficult.
However, many lenders now offer business loan options designed for such situations. Choose the right approach and lender to secure the funding your business needs.
Before applying for a business loan, understanding your company’s business credit score is essential.
This score allows lenders to assess your business’s creditworthiness and repayment ability.
A Company Credit Report (CCR) offers a comprehensive summary of your company’s credit history and financial standing
It includes details of financial obligations, repayment patterns, and credit utilisation
The report also highlights the company’s financial performance and organisational structure
Credit bureaus update scores using data from banks and financial institutions
Reviewing your business credit report helps keep records accurate and current
Obtaining a business loan with a low CIBIL score or poor company credit score can be difficult, but it is possible. You need to explore lenders who consider factors beyond just credit scores. Prepare a strong business plan and review all available financing options.
This can increase your chances of approval. A business line of credit can help manage urgent expenses and support business growth. On Bajaj Markets, you can explore several lenders and their terms to choose what suits your needs best.
Most financial institutions prefer a CIBIL score of 700 or above for business loan applications. However, some lenders may consider scores as low as 600, depending on your business performance and other factors. Here is a breakdown of CIBIL scores for business loans:
750–900: Lenders view this as an excellent score. You are likely to get quick approval with favourable terms.
650–749: You can get a business loan, though the terms may be moderate and vary by lender.
600–649: Approval is possible but may involve strict evaluation and higher interest rates.
Below 600: The chances of loan approval are very low. You may need to explore alternative funding options.
Struggling with a low CIBIL score does not mean you cannot get a business loan. Here are some ways to secure a business loan despite having a low credit score:
Small firms receive financial support with fewer credit checks through schemes such as MSME loans and Mudra loans. These options are useful when the CIBIL score is low and flexible eligibility terms are required.
NBFCs and online lenders often have easier credit score requirements than traditional banks. They provide better chances of loan approval for applicants with weak credit histories.
An overdraft facility can be requested from the existing banking partner. Based on cash flow, the bank allows the withdrawal of funds up to a fixed limit from the current account.
Collateral such as property, inventory, or machinery can be offered to secure a business loan. This reduces the lender’s risk and increases the chances of loan approval, even with a low credit score.
Peer-to-peer platforms connect borrowers directly with investors. These platforms maintain flexible criteria and often provide loans despite a low CIBIL score.
Loan eligibility improves when assets such as real estate, vehicles, or equipment are pledged. Collateral assures lenders of repayment, making approval more likely.
Central and state governments run schemes to support small businesses and promote entrepreneurship. Applications can be made under these schemes when basic conditions are met, regardless of credit score.
You can face various challenges when applying for a business loan with a low CIBIL score. Some of them may include:
Managing high interest rates on business loans is a common challenge
Lenders often charge higher rates based on loan type and business financials
Company loan applications involve extensive paperwork
Required documents include financial statements, tax returns, and collateral proof
Most loans require collateral, which many MSMEs struggle to provide
MSMEs often receive loan offers too small to meet operational needs
Unfavourable loan terms are common due to limited options or bargaining power
Terms may include high processing fees or short repayment periods
Rigid repayment schedules may not match business cash flow
Many business owners lack clarity on loan terms and hidden charges
Limited understanding of interest calculations and fee structures affects decisions
You can use an online business loan eligibility calculator to get an estimate. Review different lenders’ eligibility criteria to get a clearer idea of where your business fits.
Most banks and NBFCs require a minimum CIBIL score of 700 for business loans. Scores below 650 are considered average and may reduce approval chances.
A rejection means you do not meet the lender's eligibility criteria. Your credit score remains unaffected, though the application is recorded in your credit history. Review the reasons and work on improving your financial profile.
