To apply for a business loan, you must meet the eligibility criteria that the lender has set.
You must be a self-employed individual in a partnership, trading, service, or manufacturing.
You must be between the age group of 25-65 years
The enterprise must have a stable profit record in the last two years
The enterprise must have a minimum turnover of ₹10 Lakhs
You should possess Income tax returns for at least one year
The unsecured business loan eligibility is calculated after evaluating different parameters that include your business record, CIBIL score, credit utilisation ratio, and tax payment record. To be eligible for a new business loan, you must ensure:
A good CIBIL score that ranges above 700 as it plays a major role in determining your eligibility
A clear tax record; having a good tax filing history will ensure that you get a high loan amount
A clear debt repayment record assures the lender of your financial discipline
Provide Error-free Documentation: Most times, loan pleas are rejected due to missing or fake documents. You must ensure that you submit all the listed documents at the time of application, and this will ensure that you enjoy a smooth banking experience.
Make Regular Tax Payments: Your tax history is important, and defaulting on tax payments can lead to loan rejections. This makes it essential for you to make your tax payments on time.
Business Profitability: Lenders are more comfortable with businesses that are doing well. The bank is likely to reject the loan application if the business suffers losses. You should seek a secured loan in case of an unstable business record.
Future Financial Prospects: Lenders extend loans to clients who will stay stable and generate profits. If the business industry is volatile, the bank may reject the loan application, and if the loan is approved, the interest rate will be higher.
A promising and stable income assures the lender of your strong repayment capacity. This is why it has a heavy influence on your eligibility.
The minimum age required to apply for a business loan is 22 years.
The documents required for a business loan include identity proofs, duly filled application form, certified bank statements, and business proof.
No minimum salary is required when applying for a business loan as business persons do not have a fixed salary.