How to Get Business Loan Without an ITR?

Do you run a small business and want to know how to get a business loan without an ITR and income proof? Most of the public and private sector banks do not provide loan facilities to businesses without an ITR. However, few banks and financial institutions can give you business loans without demanding an ITR or income proof.

If you have founded a start-up, or if you are running a business that falls under the “Micro, Small & Medium Enterprises” (MSME) category, or if you are an entrepreneur who does not have an ITR, you can approach a non-banking financial company (NBFC) or a microfinance institution (MFI) for securing a business loan. This article discusses how you can get a business loan without ITR and income proof at competitive interest rates.

Who can get a business loan without ITR?

If you are one of the following, you can get a business loan without ITR:

1. Individuals, retailers, companies, manufacturers, or
2. Limited liability partnership (LLP) firm, partnership firm, a co-operative society, or
3. Start-up, budding entrepreneur, or a first-time business.

Eligibility criteria for getting a business loan without ITR

To get a business loan without ITR, you must fulfil the following eligibility criteria:

1. At the time of loan maturity, your age should be between 18 and 65.
2. The loan amount must be between Rs 10,000 to Rs 30 lakh.
3. Your credit score must be 700 or above.
4. The lender shall define the requisite turnover to be eligible for the loan.
5. The lender should decide on the collateral required, if any, for furnishing the loan.

What are the documents needed to get a business loan without ITR?

You will be required to submit the following documents to the respective financial institutions to get a business loan without ITR:

1. A duly filled loan application form.
2. Passport size photographs.
3. Proposed business plan or model.
4. Identity proof (acceptable identity proofs are voter identity card, Aadhar card, passport, driving licence, etc.).
5. Permanent Account Number (PAN) of the applicant company, partner or individual.
6. Proof of residence (acceptable proof of residence are passport, driving licence, Aadhar card, voter identity card, ration card, electricity bill, rent or lease agreement, etc.).
7. Company’s certificate of incorporation.
8. Memorandum of association (MOA) of the company or the partnership deed of a partnership firm or LLP.
9. Establishment certificate of the business.
10. Rent agreement (if applicable).
11. The current account statement of the company or business entity.

Available options to get a business loan without ITR

Several financial institutions can easily help you get business loans without demanding an ITR or proof of income. You can even explore several business loan schemes initiated by the Government of India to aid start-ups and MSMEs.

Some of the available schemes are:

1. Pradhan Mantri Mudra Yojana.
2. Prime Minister Employment Generation Programme.
3. PSB Loans in 59 minutes.
4. National Small Industries Corporation.
5. Stand up India.
6. SIDBI Make In India Soft Loan Funds for MSMEs.

How to improve the chances of your loan approval?

You can try the below-mentioned steps to improve your chances of getting a business loan without ITR:

1. Ensure your CIBIL score is not less than 700 before applying for the business loan. If you have a CIBIL score of around 900, the chances of loan approval increase significantly.
2. Do not resort to market lenders or unauthorised moneylenders.
3. You can apply for the business loan with a co-applicant who is a professional having proof of income.
4. While applying for the business loan without ITR, you may furnish some collateral to increase your chances of loan approval. The collaterals you can provide to the financial institutions are immovable property, letter of credit, bill discounting, pledge of some movable property, etc. 
5. Apply for personal loans instead.

Conclusion

If you are an MSME, a start-up, or a new entrepreneur who does not have a lot of financial backup for their businesses, getting a MSME loan can be the best way to boost your business. However, there are high chances that you may not have an ITR or proof of income to convince the financial institutions about the repayment of loans.

In such cases, getting a business loan without ITR can work wonders for you. Several financial institutions and government schemes are available to new and small businesses to help them grow and develop seamlessly. In such schemes, you do not even have to worry about how much ITR is required for a business loan. You can simply grab the opportunity and get your business loan easily without any hassle.

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