Before applying, your eligibility checklist matters. If you are a business owner looking for a business loan between ₹50 lakh and ₹5 crore, the biggest mistake is applying blindly for a business loan and hoping the bank or financial institution will figure out your loan eligibility, credit profile, and financial documents on its own.
In reality, banks and NBFCs follow a very specific eligibility logic. If your profile is not structured properly, applications get delayed, rejected, or approved at a much lower amount.
This simple checklist will help you self-check your eligibility before you apply — and avoid unnecessary rejections.
Step 1: Check Eligibility checklist Your Business Basics
Ask yourself honestly:
- Is your business legally registered?
- Has it been running for at least 2–3 years?
- Do you have regular GST filings (if applicable)?
👉 If yes, you already clear the first filter with most leading banks and financial institutions.
Step 2: Turnover & Cash Flow Reality Check
For loans in the ₹50L–₹5Cr range, most lenders expect:
- Annual turnover of ₹1.5–₹2 crore or more
- At least 1–2 years of stable profits
- Clean bank statements (no frequent cheque bounces or heavy overdraft usage)
💡 Tip: Even if profits are low, strong cash flow can still work in your favour. Understanding your working capital requirements is crucial.
Step 3: Credit Score – This Matters More Than You Think
- A CIBIL score of 700+ gives you smooth approvals
- Even one delayed EMI can now impact your score quickly
If your score is weak, fix it before applying. This alone can change approval outcomes. Check the official CIBIL website for your free annual report.
Step 4: Collateral – Be Clear, Not Confused
Here’s the truth:
- Unsecured loans usually work up to ₹1–2 crore (profile dependent)
- For ₹3–₹5 crore, lenders prefer collateral
- Property-backed loans (LAP) offer lower interest rates and higher limits
Don’t guess. The loan structure matters more than the amount you ask for. You can even opt for commercial property financing.
Step 5: Keep Your Documents Ready
Before you apply, make sure you have:
- PAN & Aadhaar
- Last 2–3 years ITRs
- Audited balance sheet & P&L
- 12 months bank statements
- GST returns (if applicable)
Missing documents = delays. Simple as that. Check MSME guidelines to understand what’s mandatory.
Interest Rates & Charges – What Most People Ignore
Business loan interest rates depend on:
- Your credit score
- Business stability
- Secured vs unsecured loan
Also check with RBI’s master direction on lending:
- Processing fees
- Prepayment charges
- Late payment penalties
Many borrowers get shocked after sanction. Don’t be one of them.
Common Mistakes That Get Applications Rejected
Avoid these:
- Applying to multiple banks at the same time
- Overstating turnover or profits
- Submitting incomplete documents
- Choosing the wrong loan type
Most rejections happen due to poor planning, not poor eligibility.
Quick FAQs (Straight Answers)
Can I get a ₹50L business loan without collateral?
Yes, if your credit score and cash flow are strong.
Is ₹5 crore possible without property?
Rare. Most lenders will ask for collateral at this level.
Does an existing home loan affect my business loan?
Yes. It reduces repayment capacity but doesn’t automatically reject you. Check home loan vs LAP differences.
How long does approval take?
7–15 working days if your profile is clean and documents are ready.
Need Help Deciding the Right Loan Structure?
If you’re unsure whether to go for an unsecured loan, LAP, or a mixed structure, it’s better to clarify before applying.
👉 Get a quick eligibility check with a loan expert and know your real options before you apply. You can also use our EMI calculator to plan your finances.
(No spam. No forced applications. Just clarity.)
About CreditCares
CreditCares is a trusted loan consultant in Kolkata, partnering with 50+ banks and NBFCs to provide customized business financing solutions. Connect with us for expert guidance on your next business loan.
