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Securing a business loan can be a game-changer for entrepreneurs. However, understanding the eligibility criteria is crucial before applying. This blog delves into the key factors that determine business loan eligibility.
Key Eligibility Criteria
- Business Vintage
- Most lenders require the business to be operational for at least 2-3 years.
- Annual Turnover
- A minimum annual turnover, often around ₹40 lakhs, is typically expected.
- Credit Score
- A good personal and business credit score enhances loan approval chances.
- Profitability
- Consistent profits indicate financial stability and repayment capacity.
Documentation Required
- Business registration proof.
- PAN and Aadhaar cards.
- Bank statements for the last 6-12 months.
- Income tax returns for the last 2-3 years.
Improving Your Eligibility
- Maintain accurate financial records.
- Reduce existing debts.
- Enhance your credit score by timely repayments.
Conclusion
Understanding and meeting the eligibility criteria is the first step toward securing a business loan. Proper preparation can significantly increase your chances of approval.