Business Loans Eligibility

Business Loans Eligibility

A Business loan is a credit facility provided by various banks, financial institutions, or NBFCs (Non-Banking Financial Companies) to fulfill the financial requirements of the borrowers. It can be offered to business owners, professionals, MSMEs, individuals, entrepreneurs, and many other business loan eligibility entities. Business loans provide both secured and unsecured loans.

Eligibility criteria for a business loan

  • The applicant's age should be from 25 to 65 years of age.
  • The business turnover should be a minimum of 40 lakhs.
  • Income Tax Return should be filed for at least 1 year.
  • The organization includes private limited companies, partnerships, limited liability companies, etc.
  • Self-employment involves manufacturers, traders, etc.
  • Current business experience requires a minimum of 3 years.
  • Self-employed professionals include company secretaries, doctors, architects, chartered accountants, engineers, CS, etc.  
  • Cash flow should be positive in the organization.
  • Turnover must be audited by a registered CA.
  • The applicant can get loan amounts ranging from Rs. 1 lakh to Rs. 5 crores.

Factors affecting business loan eligibility

Negative cash flow: - Banks verify the overdue or liabilities of the borrower as it has an impact on the creditworthiness of the organization.

Low credit rating: - It specifies the capability of business loan repayment as it includes your financial history of payments. It is the major reason for lowering the credit limit and it decreases the chances of opting for a loan.

Posted in Business News on November 30 at 11:15 AM

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