Running a business requires funding, and a business loan is one of the most common ways to get that support. But what if you have a low CIBIL score? Don’t worry—qualifying for a business loan with a poor credit score is still possible if you know the right strategies. This guide explains how.

What Is a CIBIL Score?

A CIBIL score is a three-digit number ranging from 300 to 900 that reflects your creditworthiness. It’s generated by the Credit Information Bureau (India) Limited and is used by lenders to evaluate your credit history.

• 750 and above = Excellent

• 650 – 749 = Good

• 550 – 649 = Fair

• Below 550 = Poor

If your score is below 650, traditional banks may consider you a high-risk borrower. But there are ways around this challenge.

1. Choose NBFCs Over Traditional Banks

Non-Banking Financial Companies (NBFCs) are often more flexible than banks when it comes to credit criteria.

• They offer loans based on business potential rather than just CIBIL score.

• Many NBFCs focus on alternative credit data and cash flow instead of only relying on bureau reports.

👉 Explore NBFC loan options for businesses with low credit scores.

2. Opt for a Secured Business Loan

Offering collateral can significantly improve your chances of approval even with a low score.

Commonly Accepted Collaterals:

• Property (residential or commercial)

• Fixed deposits

• Gold or mutual funds

By reducing the lender’s risk, secured loans are more accessible to applicants with low scores.

3. Apply for a Lower Loan Amount

If your credit score is low, start small. A smaller loan amount is easier for lenders to approve, especially if your income or cash flow supports it.

• Keep EMI affordable

• Choose longer tenures to reduce monthly burden

💡 SBI’s SME Loan Products include flexible options for new entrepreneurs.

4. Build a Strong Business Plan

When you can’t rely on your credit score, your business plan becomes your strongest asset.

Include:

• Clear revenue projections

• Market research

• Cash flow estimates

• Business registration and compliance proofs

A strong plan shows lenders you’re serious and capable.

5. Show Consistent Bank Statements & Cash Flow

Many lenders today also evaluate your bank statements and monthly cash flow. Ensure that:

• Your business bank account shows regular deposits

• Expenses are controlled

• GST returns and ITR filings are updated

This financial discipline adds credibility.

6. Add a Co-Applicant or Guarantor

Having a co-applicant with a good CIBIL score can improve your loan eligibility. This reduces the lender’s risk and boosts approval chances.

You can use:

• A business partner

• A spouse or family member

• An investor

7. Improve Credit Score Before Applying (If You Can Wait)

If the loan isn’t urgent, take a few months to work on your CIBIL score.

Tips to Boost Your Score:

• Pay existing EMIs and credit card dues on time

• Maintain a good credit utilization ratio

• Avoid multiple hard inquiries (loan applications)

👉 Read our blog: How MSMEs Can Boost Credit Score in 2025

FAQs: Business Loans with Low CIBIL Score

Q1. Can I get a business loan with a CIBIL score of 600?

Yes, many NBFCs and private lenders offer loans even if your score is 600, especially if you show good income and business stability.

Q2. Is it safe to take a loan from NBFCs?

Yes, as long as you choose RBI-registered NBFCs. Always check the company’s credentials and loan terms before signing.

Q3. What documents are needed?

• PAN & Aadhaar

• Business registration proof

• Bank statements (6–12 months)

• Income Tax Returns

• GST filings

Final Thoughts

A low CIBIL score doesn’t mean the end of your business funding journey. With the right strategy, documents, and lenders, you can still get a loan that fits your needs.

✅ Pro Tips Recap:

• Use NBFCs or FinTech lenders

• Offer collateral where possible

• Maintain clean banking and financials

• Improve your credit score if time permits

📞 Need Help Qualifying for a Loan?

At CreditCares, we specialize in helping clients with low CIBIL scores secure the best loan options.

✅ 50+ partnered banks & NBFCs
✅ Fast approvals, transparent terms
✅ Personalized credit score improvement plans

📍Visit us at Ultadanga, Kolkata
📞 Call: 9830038870
📧 Email: creditcaresindia@gmail.com