How to Get a Business Loan Without an ITR

Whether it's a start-up or a recently established company, every business needs financial assistance for day-to-day activities, to turn profitable. The funds can be obtained with the help of a business loan. Banks and financial institutions offering business loans require the enterprise to submit their Income Tax Return (ITR). Lenders usually ask for it to check your income and assess your financial stability. 

 

However, start-ups and new businesses generally do not have substantial revenue reflected in their ITR. In such cases, submitting just the ITR filing may negatively impact their loan eligibility. Thankfully, you can get a business loan even without an ITR. Lenders typically require other documents as proof of stable income or collateral to issue a business loan in such cases. 

Lenders evaluate factors like your age, credit score, and business profile before approving the loan. You need to fulfil the following eligibility criteria to qualify for a business loan without an ITR:

• You must be an Indian resident

• You need to be at least 18 years old to apply

• You must be below 65 years of age at the time the loan duration ends

• You need to have a CIBIL score of 700 or above 

 

Collateral is not required, except for equipment finance, bill discounting, or letter of credit. The loan amount may range up to ₹50 Lakhs, depending on your business requirements and credit profile. 

 

The following are the eligible entities that can get business loans without submitting ITR:

• Individuals

• Companies

• Retailers

• Manufacturers

• Limited Liability Partnerships (LLPs)

• Partnerships

• Sole proprietorships

• Co-operative societies

• Start-ups 

• First-time business owners

The paperwork you need to submit may vary, depending on the lender’s policies. Here are some of the basic documents required to apply for a business loan without an ITR:

• Duly filled application form

• Identity proof such as a voter ID, passport, driving licence, etc.

• Business proof such as business plan, cash flow statement, P&L statement, or balance sheet

• Address proof such as electricity bill, passport, etc.

• PAN card of the company, individual, or partner(s), whichever is applicable

• Company’s Incorporation Certificate

• Partnership Deed or Memorandum of Association (MoA)

• Shops and Establishment Certificates

• Rent agreement

• Current account bank statement

You can enhance your chances of getting a business loan without an ITR by following certain tested strategies. These include:

• Offer Collateral

Some lenders may not require you to provide your ITR to approve your business loan if you offer collateral. It increases your eligibility and reduces the risk posed to the lender.

• Maintain a Good CIBIL Score 

Financial institutions, private lenders, and NBFCs often provide loans based on a healthy CIBIL score. If your CIBIL score is at least 700, you may be eligible to get unsecured loans without an ITR.

• Make Sure Your Other Documents are Ready

Improve your chances of loan approval by providing other mandatory documents on time. These include your KYC documents as well as bank statements, P&L statements, cash flow statements, and more. 

• Take the Help of a Co-borrower

By making another family member a co-applicant, you may be able to get approval for a business loan without your ITR. In this case, your co-applicant will need to provide his/her ITR to the lender.

• Try Government Schemes

The government has introduced several schemes to encourage the youth, women, and underserved individuals to encourage entrepreneurship. The National Small Industries Corporation (NSIC) Subsidy, some types of MUDRA loans under the Pradhan Mantri Mudra Yojana (PMMY) are some schemes you can apply for. You can check if you are eligible to apply with other financial statements to prove business stability.