GST – The Key to Obtaining Business Loans

gst the key to obtaining business loan

Introduction of GST, the Goods, and Services Tax has been the most dramatic and revolutionary tax reform in India. The debut of this comprehensive taxation system brought a huge impact on businesses across the nation. The Goods and Services Tax achieved the standardization of various indirect taxes levied by the State/UT and Central Governments. However, its implementation has turned out to be instrumental in the growth of small and medium scale enterprises. The unification of different tax regimes through GST has been crucial in mitigating the multiple tax issues. Additionally, the GST data has carved the way to new opportunities for business owners to avail working capital loans. Fortunately, by simply filing GST returns business owners can apply for financial assistance through lending institutions. 


Several NBFCs and banks have started providing credit facilities to small businesses based on their Good and Services Tax (GST) returns.

To further explore how GST can be beneficial in the business loan process let’s plunge through below-mentioned information: 

How MSME and SMEs can use GST for working capital needs

Under the GST taxation system, GST- related data can be made available to lending institutions for loan processing. Apart from relying on audited balance sheets lenders can now have access to real-time, first-hand information about business financials. This data-based lending allows small business owners to avail credits without pledging any asset. Even a business owner with no guarantee or security can use its GST record to get credit. 


Moreover, the consideration of comprehensive business flow in GST makes the funding easier for borrowers as well as lenders. The GST business loans are designed to provide the business owners working capital finance up to INR 1 crore purely based on turnover reflected in GSTR. Thus, by opting for these loans business owners can easily satisfy their working capital demands. Whether its purchasing inventory, managing day to day expenses or making temporary payments these loans can cover several short term capital needs. 


Additionally, these loans bring an improved convenience as these do away the need for intensive paperwork and assessment. Therefore, with GST various barriers to business financing can be eliminated. Now business owners can easily apply and avail capital based on their GST returns. 

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Features and benefits of GST based business loans


  • Simple assessment: GST business loans limit calculation and require no assessment. These are issued solely based on GSTR. 
  • Faster approval: With limited documents being required processing of GST loans is much faster. 
  • No financial analysis: Under GST based financing no bank statements or audited balance sheet is required. 
  • Hassle-free: Since these loans are issued without providing any collateral, their disbursement and processing are much faster and convenient. 


Impact of GST on business financing 


GST has led to faster disbursement of business loans to MSMEs. This free flow of finance, in turn, has boosted the growth of micro, small and medium enterprises in the nation. This facility has brought convenience to small business owners with no assets struggling to arrange capital for their business growth. By procuring loans through GST records business owners will be able to maintain a healthy influx of working capital. Depending on the annual turnover as indicated in GST returns capital can be disbursed without requiring any subsequent assessment. Thus, this simpler taxation system reduces the complexities and paperwork involved in business loans. It transforms the way lending is accomplished. Furthermore, with a significant rise in GST registered MSMEs network, lenders are favorably extending their business loan disbursement facility. Therefore, it can be predicted that after GST new ventures are seeking in expansion and to leverage this opportunity various banks and NBFCs have come forward to extend the financial facility of offering GST based business loans. Due to the steep rise in loan facility for GST compliant businesses these loans are available at the most competitive interest rate. 


However, any of the legitimate business belonging to below-mentioned sectors can apply for a business loan backed by their GST records:

  • Sole proprietorship firm 
  • Partnership firm 
  • Private limited company 
  • Public limited company  




Hence, today GST is one of the fastest means to procure business financing. Apart from introducing reformation to other sectors, GST has also instigated exemplary transformations to the lending scenario. By filing GST returns business owners can now easily apply for business loans. Due to it being used as a primary assessment tool easy access to working capital can be gained without producing any collateral or financial documents.


So, if you have decided to opt for GST based capital solution and looking for viable financing source then look no further than FlexiLoans. FlexiLoans GST loans have been designed to meet the immediate funding requirement of entrepreneurs with GST as primary support. Moreover, choosing to seek business financing through FlexiLoans allows you to take advantage of experienced professionals and quick technology backed processing. 

If ready to grow business, click here to apply for hassle-free GST business loans.

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