A constant flow of funds is crucial to either launch a new business or maintain the operations of an existing one. A business loan without ITR comes in handy for new entrepreneurs who need funding for their working capital needs. However, in most cases, you will need to submit income tax returns for the past 2 years while applying for financial assistance from lenders.
If you are an entrepreneur with a new start-up who doesn’t have adequate experience to file an ITR, you can opt for a personal loan for self-employed without ITR.
The Income tax returns are essential for availing a business loan as these act as proof that you have a source of income to repay what you are borrowing. The lending institutions will use your ITR to determine whether you are eligible for a loan.
Income tax returns usually serve these purposes when availing of a personal loan for business:
You can avail of a business loan to receive funds for a diverse range of business purposes. These include buying raw materials, installing new machinery, enhancing inventory, increasing manpower, and more.
As mentioned above, ITR is one of the most necessary documents that you need to submit when availing of a business loan. Your lender will check the ITR, among many other documents, before approving a personal loan for business. However, enterprises in their early days might not be able to file their income tax return due to various reasons.
It might happen that you do not have the necessary documents or experience to file ITR. Also, your business might not be able to generate enough revenue to cover loan repayment. Whatever be the reason, you can apply for a personal loan for self-employed without ITR instantly to meet business-related expenses.
A personal loan allows business owners to get access to a substantial amount of funds required for business operations without ITR instantly. Navi, for instance, offers a personal loan of up to Rs. 20 lakh at highly competitive interest rates. This loan comes with a completely paperless and hassle-free application process and minimal documentation.
Download the Navi app and avail a personal loan for business to meet the various expenses of your organisation.
Also Read: How To File ITR-2?
The following are eligible to apply for a business loan without ITR:
If you do not possess an ITR but need to apply for a business loan, you need to be aware of the following eligibility criteria:
However, the eligibility requirements for these loans will differ across lenders.
Here are some of the essential documents that you should provide while obtaining a personal loan for self-employed without ITR:
You should remember that the documents necessary to apply for this loan will usually vary across lenders.
To avail of a business loan without ITR, you should compulsorily have a high credit score. Applicants with a credit score above 750 are considered low-risk borrowers. Accordingly, if your CIBIL score is above 750, there’s a high chance of loan approval.
So, if you are planning on taking this loan for your business, make sure to improve your credit score.
Also Read: How To Avail No Credit Check Personal Loans In India?
Given below are the steps to get a business loan without ITR:
The following table provides the important details of business loans that do not require ITR:
|Financial Institution||Loan Amount||Interest Rate||Tenure|
|HDFC Bank||Ranges from Rs. 1 lakh to Rs. 20 lakh||18% to 20% per annum||12 – 36 months|
|IDFC First Bank||Ranges from Rs. 1 lakh to Rs. 9 lakh||19% to 24% per annum||12 – 48 months|
|Bajaj Finserv||Ranges from Rs. 1 lakh to Rs. 15 lakh||19% to 25% per annum||12 – 48 months|
|Tata Capital||Ranges from Rs. 1 lakh to Rs. 20 lakh||19% to 22% per annum||12 – 36 months|
|Lendingkart||Ranges from Rs. 1 lakh to Rs. 10 lakh||1.5% to 2% per month||1 – 36 months|
Given below are the various alternatives to business loans:
Given below are the details of some of the important government subsidy loans for businesses:
This Government of India scheme was initiated to fund businesses of women entrepreneurs and people falling under the SC/ST quota.
The loan amount ranges between Rs. 10 lakh and Rs. 1 crore. Businesses that deal with manufacturing, trading, services or agro-allied activities are eligible to avail loans under this scheme.
SIDBI (Small Industries Development Bank of India) governs this particular loan scheme. Eligible candidates can get term loans and soft loans for their business to meet their required debt-equity ratio. They can avail the loan for establishing a micro, small or medium enterprise (MSME). This scheme lays emphasis on the manufacturing and services sector.
This scheme by MUDRA offers collateral-free loans to non-farm small and micro enterprises and non-corporates. Its advantages include zero prepayment charges, flexible repayment tenure (12 months to 5 years) and a concessional interest rate for women.
The maximum loan amount under PMMY is Rs. 10 lakh. Applicants need to be at least 18 years and less than 65 years in age to be eligible. They must have a good repayment history with no loan defaults previously.
The Government of India launched this scheme to catalyze the growth of the credit delivery system for the MSME sector. CGS offers term loans and working capital loans of up to Rs. 200 lakh per borrower. Lending institutions include public sector banks, private banks, selected foreign banks, Regional Rural Banks (RRBs) and the State Bank of India with its associate banks.
The Indian Government introduced this scheme to help MSMEs with procuring raw materials and advertisements. Its features include cost-free tenders, land and building financing and no security deposit.
This scheme allows Small Scale Industries (SSIs) to access tenders without any costs. Additionally, these industries don’t have to pay any security deposit to apply for the loan. NSIC Subsidy scheme finances the land and building if the cost of the project doesn’t exceed Rs. 25 lakh.
There are several banks and other financial institutions that offer business loans without ITR. Given below are some of these institutions:
More and more financial institutions today are offering business loans without ITR for self-employed people. This is particularly helping the small and medium businesses along with start-ups to maintain their operations and grow. You can refer to this complete guide if you don’t have ITR and want to fund your start-up through a business loan.
Ans: Most financial institutions require Income Tax Returns or other income proofs to sanction a business loan. There is no specific minimum ITR amount that is required to get a business loan.
Individuals who do not have ITR can approach several banks and NBFCs offering loans at relatively high interest rates.
Ans: No, all banks don’t sanction business loans without ITR. Only a few financial institutions allow applicants to opt for a business loan without ITR. However, applicants need to have a high credit score and fulfil other eligibility criteria to get a business loan without ITR.
Ans: There are a few disadvantages of applying for a business loan without ITR. These include delayed processing of the loan application, short repayment tenure and lesser amount of sanctioned loan.
Ans: You can apply with a co-applicant for a business loan. If the co-applicant has a stable source of income and can produce evidence for the same, the chances of your business loan getting sanctioned without ITR increases.
Ans: No, it is not possible to avail of a personal loan for self-employed people without income proof. You need to provide necessary income proof documents as required by your financial institution for easy loan approval.
Ans: It is essential to have a high credit score of at least 750 to avail of a personal loan for self-employed individuals without ITR. A low score might impact the chances of loan approval. So, make sure to improve your credit score before applying for such loans.
Ans: The minimum income requirement of a self-employed applicant without ITR looking to avail of a personal loan for business will usually vary from one lender to another. You should check the eligibility requirements of your preferred lender before initiating the application procedure.
Ans: The interest rate for these loans usually differs across lenders. However, the following are some of the factors that can potentially impact the interest rate on your personal loan:
– Past loan repayment behaviour
– Credit score
Ans: You can find numerous lenders in the market today offering personal loans for self-employed individuals. To find a suitable lender, you should compare and check the interest rates, repayment tenure, associated charges and other features.
This article is solely for educational purposes. Navi doesn't take any responsibility for the information or claims made in the blog.
What is Primary Deficit? – Example, Formula & MeasuresWhat is a Primary Deficit? Primary Deficit is the difference between the current year’s fiscal... Read More »
What is Financial Ratio Analysis? – Objectives, Types and UsesRatio analysis is a process that allows people to assess the financial health of a company. Using t... Read More »
Treasury Management – Its Functions, Types and BenefitsEven the most well-funded business can run into huge losses if it does not have the resources to fu... Read More »
How Anti Money Laundering Combats Financial Crime?Anti Money Laundering (AML) is a system of rules, laws, regulations, and procedures that financial ... Read More »
What is Salvage Value and Why is it Useful?Salvage value, also called scrap value, is the value of a specific asset after its useful life. In ... Read More »
Key Difference Between Factoring and Forfaiting in Trade FinanceFactoring and forfaiting have grown in prominence as major sources of export financing. For the uni... Read More »
What is Factoring and its Importance in Financial Management?Factoring is a practice in which a company buys the accounts receivable of another company at a dis... Read More »
What is Budget Surplus: Its Effects, Advantages and Impact with ExamplesWhen the revenue of a government, business, or individual exceeds its expenses in a given period, i... Read More »
What is Balanced Budget – Components, Importance and ExamplesIn financial planning or the budgeting process, a balanced budget is one in which total anticipated... Read More »
What Does Inflationary Gap Mean in Macroeconomics?In macroeconomics, the difference between current and potential GDP is known as a gap. This gap is ... Read More »
What is Accounting Conservatism in Finance and How Does it Work?Accounting conservatism involves a conservative set of accounting guidelines wherein the worst-case... Read More »
Multiple Linear Regression (MLP) – Uses, Formula and ExamplesVarious statistical models help in establishing a relationship between different variables. Multipl... Read More »
Top 10 Chit Fund Schemes in India in 2023Chit funds are one of the most popular return-generating saving schemes in India. It is a financial... Read More »
10 Best Gold ETFs in India to Invest in April 2023Gold ETFs or Gold Exchange Traded Funds are passively managed funds that track the price of physica... Read More »
10 Best Demat Accounts in India for Beginners in 2023Creation of Demat accounts revolutionised the way trades were conducted at the stock exchanges. It... Read More »
20 Best Index Funds to Invest in India in April 2023What is an Index Fund? An index fund is a type of mutual fund or exchange-traded fund (ETF) that... Read More »
Best Arbitrage Mutual Funds to Invest in India in April 2023Arbitrage funds are hybrid mutual fund schemes that aim to make low-risk profits by buying and sell... Read More »
10 Best SIP Plans in India to Invest in April 2023What is SIP? SIP or Systematic Investment Plan is a method of investing a fixed amount in ... Read More »
10 Best Corporate Bond Funds in India to Invest in April 2023Corporate bond funds are debt funds that invest at least 80% of the investment corpus in companies ... Read More »
10 Best Bank for Savings Account in India [Highest Interest Rate 2023]Savings account is a type of financial instrument offered by several banks. It lets you safely depo... Read More »