To avail any business loan whether it be for expansion, hiring more employees, to buy more equipment etc. one has to first check the business loan eligibility to avoid rejection.
It is, therefore, necessary to fulfill certain criteria that will determine your eligibility for a business loan and if your business is capable enough to repay the loan on time. Avoiding rejection will also be good for your CIBIL score.
Let us have a look at some basic eligibility criteria required by banks & NBFCs:
1. Business turnover:
The business turnover should be between Rs. 15 lakhs to Rs. 1 crore.
2. Applicant’s age:
Applicant’s age should be minimum 21 years when applying for a loan and a maximum of 65 years at the time of maturity.
3. The activity of the business:
The number of years since the business has been in operation is also an important criterion. A business should have been active since minimum 3 years, but some might even consider a year old business.
4. Credit score:
It is very important to have a good credit score. A bad credit score will do no good while applying for a loan. Some institutions even have their in-house credit evaluation methodologies.
Some other criteria:
- Loan Amount
- Loan Purpose
- Business Plan
- Entity Type (Proprietorship, LLP etc)
- Licenses and Permits for business
- Employer Identification Number (EIN)
- Proof of Collateral (if any)
- Annual Business Revenue and Profit
- Bank Statements (all accounts)
- Balance Sheet
- Personal and Business Tax Returns
- Ownership and Affiliations
- Legal Contracts and Agreements
Gromor Finance has its own business loan eligibility calculator and a hassle-free loan application process.
Check your eligibility here.