A business loan without ITR (Income Tax Return) might seem difficult, but it’s possible if you know the right options and strategies. Many business owners face challenges in securing loans due to the absence of proper financial documentation like ITR, especially small businesses and startups. However, financial institutions and NBFCs (Non-Banking Financial Companies) have specific loan products tailored for businesses without ITR.
In this detailed guide, we will explain how you can secure a business loan without ITR, the eligibility criteria, available options, and tips to improve your chances of approval.
Why Lenders Ask for ITR for Business Loans?
ITR is a key document that helps lenders assess your business’s financial health and repayment capacity. It shows your business’s income, expenses, and profit over a period, allowing lenders to evaluate the risk involved in lending money.
✅ Key Reasons Why ITR Is Required:
- To verify income and profit consistency.
- To determine repayment capacity.
- To assess financial stability and cash flow.
- To calculate loan eligibility and interest rate.
Since ITR acts as proof of income and financial health, lenders prefer it for loan approval. However, if you don’t have ITR, alternative options are available.
Can You Get a Business Loan Without ITR?
Yes, you can still get a business loan without ITR. Many NBFCs, private lenders, and fintech companies offer business loans based on other factors such as:
- Bank statements.
- GST returns.
- Business turnover and cash flow.
- Collateral or security.
- Credit score.
Top Ways to Get a Business Loan Without ITR
1️⃣ Use Bank Statements and Financial Records
- If you don’t have ITR, you can present your bank statements for the last 6 to 12 months.
- Lenders assess the cash flow, daily transactions, and overall business health based on these statements.
- Strong and consistent bank transactions increase the chances of approval.
✅ Pro Tip: Maintain consistent bank deposits and avoid irregularities in withdrawals to build a strong financial record.
2️⃣ Apply for a Secured Business Loan
A secured business loan requires you to pledge an asset such as:
-
- Property (commercial or residential)
- Machinery
- Stocks
- Fixed deposits
- Since the loan is backed by collateral, lenders are less likely to require ITR.
- Lower interest rates and higher loan amounts are possible with secured loans.
✅ Pro Tip: Make sure the value of your collateral is higher than the loan amount to increase approval chances.
3️⃣ Leverage GST Returns and Sales Invoices
- Lenders often accept GST returns and sales invoices as proof of business performance.
- Regular and increasing sales invoices indicate business growth and repayment ability.
- GST returns for the last 12 to 24 months help lenders assess business profitability.
✅ Pro Tip: Ensure GST returns are filed on time and accurately reflect your business income.
4️⃣ Apply for Loans from NBFCs and Fintech Companies
- NBFCs and fintech platforms have more flexible criteria than banks.
- They offer unsecured business loans based on:
- Business turnover
- Cash flow
- Credit score
- Business vintage (age)
- Interest rates may be higher than traditional banks, but the approval process is faster.
✅ Pro Tip: Maintain a positive repayment history with NBFCs to get better loan terms.
5️⃣ Use a Credit Card or Overdraft Facility
- Business credit cards and overdraft facilities provide quick funds without requiring ITR.
- Approval is based on your credit score and bank relationship.
- Ideal for short-term working capital requirements.
✅ Pro Tip: Pay off your credit card balances regularly to maintain a high credit score.
6️⃣ Government Business Loan Schemes
- Government-backed loan schemes like Mudra Loan, CGTMSE, and Stand-Up India do not require ITR for approval.
- They are aimed at supporting small and medium enterprises (SMEs) and startups.
- Minimal documentation and easy processing.
✅ Pro Tip: Approach a government-recognized lender or financial institution to apply for these schemes.
🔹 Eligibility Criteria for Business Loan Without ITR
While the exact requirements vary across lenders, the general eligibility criteria are:
✅ Business Age: Minimum of 1 year (for unsecured loans)
✅ Annual Turnover: Minimum ₹10 lakhs (varies by lender)
✅ Bank Statements: At least 6 to 12 months of consistent transactions
✅ Credit Score: Minimum 650 (higher score improves approval chances)
✅ Business Type: Sole Proprietorship, Partnership, Pvt Ltd, LLP, etc.
✅ Collateral: Required for secured loans (optional for unsecured loans)
Documents Required for Business Loan Without ITR
- KYC Documents: Aadhaar Card, PAN Card, Business Registration Certificate
- Bank Statements: Last 6 to 12 months
- GST Returns: Last 12 to 24 months (if applicable)
- Business License: MSME Registration, Shop Establishment Certificate
- Proof of Business Existence: Utility Bills, Business Lease Agreement
- Collateral Documents: If applying for a secured loan
Challenges in Getting a Business Loan Without ITR
❌ Higher Interest Rates – Lenders charge higher rates due to increased risk.
❌ Lower Loan Amount – Loan amount may be restricted without proper income proof.
❌ Strict Eligibility – Lenders may require a higher credit score or business age.
❌ Shorter Tenure – Lenders often offer shorter repayment periods for unsecured loans.
How to Improve Approval Chances Without ITR
✅ Maintain a high credit score by paying bills and loans on time.
✅ Build strong business turnover and cash flow.
✅ Provide GST returns and sales invoices to support financial performance.
✅ Keep personal and business bank statements separate.
✅ Offer collateral to secure better terms and interest rates.
Best Lenders for Business Loan Without ITR in India
Conclusion
Getting a business loan without ITR is possible if you explore the right options and present alternative financial documents like bank statements, GST returns, and business turnover reports. NBFCs, fintech lenders, and government schemes offer easy access to business loans without ITR, provided you meet the basic eligibility criteria. Focus on maintaining a high credit score, consistent cash flow, and strong financial health to increase approval chances.
By following these strategies, you can secure the funds needed to grow your business even without ITR.
