A business loan in India can be obtained from banks and NBFCs. Most of the banks ask for collateral for granting loans. Bargaining with banks thus becomes difficult for small businesses since they start with limited money as an investment. If we talk about loans without security (unsecured loans) which are granted by NBFCs, they are collateral free and can be disbursed in a few days.
Most NBFCs have a simple online application process, which can be completed from anywhere a business is in place.
Knowing the eligibility criteria for a small business loan without security is very important.
Although different institutions have different criteria here are some basic ones:
- Minimum Turnover should be a minimum of 15 Lakhs p.a.
- Applicant’s age should be between 21 years – 65 years.
- Business should be active for a year or more)
Some common documents needed a for a loan without security:
- PAN Card of the proprietor
- Aadhaar Card of the proprietor
- Bank Statements of All Bank Accounts (in pdf) for Last 12 Months
- Income Tax Returns For The Previous 2 years
- Latest Balance Sheet & P&L (provisional/audited)
- Latest Audited Balance Sheet and P&L
- Shop Establishment License/Gumasta
- GST Registration Receipt or Challans
But before you go ahead and apply for a business loan without security, you should prepare the following:
Preparing a business case before applying for a loan is very important. It should be a short statement mentioning the type of business you are in, the amount of loan you want, and why (new machinery, new product line etc.). You should also keep updating your business plan during various stages of the business.
You should display your financial statements to show that your business is doing well. You should also include the journey of your business growth, expenses, and profits gained over a period of time and that why more funds is a necessity for your business.
Knowing how much your company is worth today is also important. Show some judgments, analysis of how your business will grow in the future and also the projected expenses and revenue with the relevant explanation.
Other required criteria
Apart from the criteria mentioned above, Statutory filings should also be made and tax-related paperwork should be up-to-date. If your business premises has been taken on rent, you should have the rent agreement, or utilities’ bills should be in your company’s name.
For unsecured business loans, get in touch with Gromor Finance today! We offer loans up to Rs. 10 Lakhs, through a simple online application process.