Business Loan

Eligibility Criteria for a Business Loan in India

Required Documentation for Business Loan Application

A business loan is a popular unsecured financing option in India that empowers entrepreneurs, startups, and small businesses to manage cash flow, invest in infrastructure, purchase inventory, or expand operations. These loans are offered without collateral and can be customized with flexible EMI options and competitive interest rates.Business loan can be taken by individuals from a bank or a non-banking financial company (NBFC) to meet their business needs. It is for only business persons,Whether you're launching a new venture or scaling an existing business, a business loan can provide the necessary financial boost with fast disbursal and minimal paperwork.

1. Minimum Business Vintage – 6 Months

Your business should be operational for at least 6 months to qualify for a loan. This duration proves that your venture has some market presence and operational stability.

🔹 Why it matters: Lenders want to ensure that your business has a proven track record and is generating income before offering financial assistance.

2. CIBIL Score – 700+

A good CIBIL score of 700 or above significantly improves your chances of approval. It reflects your credit history, repayment behavior, and financial discipline.

🔹 Why it matters: A strong credit score builds lender confidence and may lead to better interest rates and higher loan amounts.

3. Age – More Than 23Years

You must be at least 21 years old to apply. The upper age limit can go up to 65 years at the time of loan maturity, depending on the lender.

🔹 Why it matters: Age eligibility ensures legal capacity to borrow and the ability to manage loan repayments during the tenure.

4. Minimum Business Turnover – ₹7.5 Lakhs Annually

Your business must generate a minimum annual turnover of ₹7.5 lakhs. This shows that your business has stable income potential and the ability to service the loan.

🔹 Why it matters: A healthy turnover ensures lenders that your business can handle loan repayments comfortably.

1. KYC Documents

• PAN Card (Mandatory)

• Aadhar Card

• Current Residence Address Proof (e.g., Voter ID, Utility Bill)

2. Financial Documents

• Last 3 years' Income Tax Returns (ITRs)

• Last 3 years’ audited financials (optional but recommended)

• 1 year GST Return (if filed)

3. Business Proof

• Business Registration Certificate (e.g., Udyam, Shop Act, MSME Certificate)

4. Bank Statement

• Last 12 months’ business bank account statement

This helps assess cash flow and credit patterns.

📌 Pro Tip:

Ensure that all documents are up to date, clear, and correctly reflect your business details. Any mismatch or outdated paperwork may delay the loan approval process.