How to Check Instant Business Loan Eligibility Criteria?

Being a business owner and being your boss can be incredibly gratifying. But, running a business does not mean you can be oblivious to challenges. One of the key challenges to keep the business functions running is to have a regular flow of investment. So, if you are in immediate need of cash to expand your business, or you want to make payments to the supplier, or you want to increase the business capital, applying for a business loan is the most practical solution.If you own a start-up business, and you wish to apply for a business loan, you may inevitably first think about the business loan eligibility for start-up and the documents required for the loan. The business loan eligibility criteria vary from lender to lender, but some of the standard requirements that most lenders look for are mentioned below.

• The businesses must be in operation for at least 24 months at a stretch. The lenders in India usually do not prefer to offer business loans that are new because of the uncertainty about their income and ability to repay. A business that is in operation for less than a year is considered as high-risk loans by the lenders.
• The business should have a turnover of at least two to ten lakhs per annum (this may vary based on the nature of your business and the amount of loan you apply). The annual income signifies to the lender that you can repay the loan consistently within the stipulated time.
• You must have filed ITR (Income Tax Returns) for the previous year (as on the date of applying for the loan).

Documentation is an integral part of the business loan application process. The documents required for loan approval differs from lender to lenders, but most lenders would require the following documents:

• Identity Proof – a copy of Passport, bank account passbook with a photograph, Voter ID, driving licence, Aadhaar Card, PAN card.
• Address Proof – A copy of utility bills, Passport, Aadhaar Card
• Income-related documents – bank account statement (both business credit account for business and personal savings account)
• Other documents – Profit and Loss Statement, Balance sheet (duly audited), business registration certificate, MoA (Memorandum of Association)

Just as it is vital to know about the eligibility requirements of the lender to qualify for the loan, you must be wary of the following factors that can negatively affect your eligibility:

• Criminal background – If you have served time or have any criminal record, the chances of getting a business loan will be negligible.
• Low credit rating – If you have a bad credit history, or if you have a poor credit score, the lender will reject your business loan application.
• Business instability – Business stability reflects your ability to run the business successfully. If your business operation is not stable, the lender will consider you a high-risk borrower and reject your loan application.

Applying for a start-up business loan is an excellent way to get the desired funds for propelling your venture on the path of success.

The information contained herein is generic in nature and is meant for educational purposes only. Nothing here is to be construed as an investment or financial or taxation advice nor to be considered as an invitation or solicitation or advertisement for any financial product. Readers are advised to exercise discretion and should seek independent professional advice prior to making any investment decision in relation to any financial product. Aditya Birla Capital Group is not liable for any decision arising out of the use of this information.