Take your business to new heights: Know about business loan eligibility

Thinking of turning your entrepreneurial dreams into reality? Lack of funds shouldn't hinder your journey. Business loans provide the necessary funds to help you expand and grow your business in such situations. 

Find out how to get a business loan from the bank and fulfill your loan requirements. Learn how to navigate the loan application process effectively by exploring the core aspects of business loan eligibility. 

Understanding business loan eligibility
 

Before qualifying for a business loan, lenders evaluate specific criteria that determine your business loan eligibility. Business loan criteria typically include your credit score, the age of your business, revenue details, and financial stability. Meeting these requirements is crucial as it showcases your ability to repay the loan and mitigates lender risk.

Key business loan requirements
 

• Credit score:
  
  

  A good score is essential for a business loan and enhances approval chances. Maintaining a healthy credit history by paying bills on time and managing debts responsibly is vital.

• Vintage of business:
  
  

   Lenders prefer businesses with a certain minimum operational period, typically 3 years

• Revenue:
  
  

  Demonstrating consistent revenue income reassures lenders of your business's financial stability and ability to repay the loan.

• Financial statements:
  
  

  Prepare accurate financial statements, including balance sheets, income statements, and cash flow statements, to provide a comprehensive view of your business's financial health. 

Essential business loan eligibility documents
 

• Business plan:
  
  

  Present a detailed business plan outlining your objectives, market analysis, financial projections, and repayment strategy.

• ITR:
  
  

  Provide your business tax return documents, or ITR, for the past two to three years to demonstrate your financial history

• Bank statements:
  
  

  Provide bank statements from the past six months to verify your cash flow, account balances, and financial activities.

• Legal documentation:
  
  

   Include licenses, permits, contracts, and other legal documents relevant to your business operation.

• GST returns:
  
  

  Furnish your GST returns for the last six months.

• KYC documents for applicants and co-applicants:
  
  

  Common KYC documents include PAN card and Aadhaar card.

• Residence/business ownership proof:
  
  

  You will be required to submit the appropriate documents depending on the type of business you own, such as a sole proprietorship, partnership, or registered company. 

How to improve your business loan eligibility
 

• Strengthen your credit profile: 
  
  

  Timely payments, reducing debt, and resolving credit issues can enhance your credit score over time.

• Increase revenue:
  
  

  In order to qualify for a business loan from IDFC FIRST Bank, a company must have a minimum revenue of 50 lakhs. Focus on growing your business's revenue streams to demonstrate financial stability and repayment capacity.

• Partner with trusted institutions –
  
  

  Collaborating with reputable institutes, such as IDFC FIRST Bank, can boost your credibility and improve your chances of business loan approval.

How IDFC FIRST Bank makes the business loan process smoother
 

• Streamlined process:
  
  

   Hassle-free and efficient loan application process.

• Personalised assistance:
  
  

   Expert guidance tailored to your business needs.

• Quick approvals:
  
  

   Fast response and prompt loan approvals.

• Competitive interest rates:
  
  

   Affordable borrowing options.

• Tailored solutions:

   Customisable loan options to meet your specific requirements.

Also read - Smart ways to build the right workforce for your small business

​​Start your business with an IDFC FIRST Bank Business Loan

Taking the necessary steps to secure financial support for your business begins with knowing how to qualify for a business loan. You can increase the likelihood of loan approval by meeting all the requirements, having all the documentation in place, and adopting strategies to improve eligibility. 

Here's what you can get with an IDFC FIRST Bank Business Loan:

• Collateral-free loans up to Rs 1 crore for self-employed individuals and businesses
• Funding up to Rs 50 lakhs based on your current account statement or GST return

Apply today and begin your journey to entrepreneurial success.

Disclaimer

The contents of this article/infographic/picture/video are meant solely for information purposes. The contents are generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. The information is subject to updation, completion, revision, verification and amendment and the same may change materially. The information is not intended for distribution or use by any person in any jurisdiction where such distribution or use would be contrary to law or regulation or would subject IDFC FIRST Bank or its affiliates to any licensing or registration requirements. IDFC FIRST Bank shall not be responsible for any direct/indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information mentioned. Please consult your financial advisor before making any financial decision.