Getting a business loan without ITR- Possible or Not possible?

New entrepreneurs and first-time business owners may need more business experience to submit an ITR. However, they are still eligible for business financing to start their own businesses. There are multiple private and public sector banks, NBFCs, and MFIs in today’s financial and banking markets that offer loans for businesses at competitive rates of interest with flexible repayment options.

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Getting a business loan without ITR; Possible or not!



New entrepreneurs and first-time business owners may need more business experience to submit an ITR. However, they are still eligible for business financing to start their own businesses. There are multiple private and public sector banks, NBFCs, and MFIs in today’s financial and banking markets that offer loans for businesses at competitive rates of interest with flexible repayment options. However, in order to obtain business loans at reduced interest rates, you must file an ITR to satisfy your company’s working capital needs.


With the advent of startups, small-scale industries (SSIs), and micro, small, and medium companies (MSMEs), the need for business loans has skyrocketed. As a result, to obtain business loans at favorable interest rates, you must have a solid ITR and a decent credit score. Therefore, financial institutions scrutinize your financial statements, ITR paperwork, income proofs, credit score, identification, address, and business address proofs before approving any business loan.


Benefits of availing credit without ITR:


A business loan can be used to obtain capital for various commercial reasons. These include purchasing raw materials, installing new machinery, improving inventory, boosting the workforce, and other activities. 


As previously stated, an ITR is one of the most important documents to submit while applying for a company loan. Before approving any personal loan for the business, the lender will consider the ITR, among others. However, businesses in their early stages may need help to file their income tax returns for various reasons.


You may need more documentation or skills to file an ITR. Furthermore, your company may need more revenue to cover debt payback. No matter the cause, you can file an application for a personal loan for self-employed individuals without an ITR to urgently cover their company expenses. 


A personal loan enables business owners to rapidly obtain the capital required for business operations without ITR. In addition, this loan includes a paperless and hassle-free application process and minimum documents.


Importance of ITR:


Income tax returns are essential when applying for a business loan since they reflect that an individual has a good income source to repay the debt borrowed. In addition, lending institutions will utilize your ITR to establish your loan eligibility. 


While applying for a loan for business, ITRs are typically utilized for the following purposes:

  •  The ITR depicts the standard of the funds provided by a lending institution. 


  • It allows candidates to obtain business loans with cheaper interest rates.


Who is eligible for a business loan without ITR?



  • Individuals
  • Traders
  • Corporations
  • Limited liability partnerships (LLPs)
  • Traders
  • Retailers
  • Manufacturers
  • Partnerships
  • sole proprietorships
  • Non-governmental organizations (NGOs)
  • Trusts
  • cooperative societies
  • Entrepreneurial ventures
  • first-time business owners
  • self-employed professions


Business loans without ITR are complicated to avail from public and private sector banks because a few financial institutions offer loans for business without verifying the ITR and GST number. Individuals without ITR can approach NBFCs and MFIs for business loans. However, the interest rates charged by these financial institutions are significantly higher. A loan against property is another option for obtaining a business loan without an ITR or proof of income. 


Business loans are used for a variety of purposes, including business expansion, the purchase of plant and machinery, the purchase of land or office space, the purchase of raw materials, the enhancement of stocks and inventory, the payment of salaries, debt consolidation, the hiring of new employees, the undertaking of training programs, and many others.


Eligibility criteria for a business loan:


If you don’t possess an ITR but want to apply for a loan for your business, you need to meet the below-mentioned qualifying requirements: 


  • Age: The minimum age of the person taking the loan at the time of loan application must be 18 years, and the maximum age of 65 years. 


  • Turnover: will differ from one lender to the next. 


  • Credit score: Your credit score should be at least 750. 


However, the eligibility restrictions for these loans will vary depending on the lender.


Documents required for a business loan:



  • Completed application form 


  • Photographs in passport size 


  • A well-detailed business plan 


  • Identity documents include a voter ID card, a driver’s license, and a passport. 


  • PAN card of a company, partnership(s), individual, whichever is significant, as proof of the existence of business and address 


  • Driving license, rent agreement, voter ID card, bank statement, electricity bill, passport, etc. 


  • Certificate of Incorporation, Partnership Deed, or Memorandum of Association (Memorandum of Association) 


  • Certificates of Shops and Establishments, as well as a Lease Agreement 


  • Bank statement for the current account. 


Subsidy loans offered by Government for Businesses:


Standup India: 

The Government of India created this scheme to help women entrepreneurs and those who fall under the SC/ST quota. 


The loan amounts range from Rs. 10 lakh to Rs. 1 crore. Loans under this scheme are available to businesses engaged in manufacturing, trading, services, or agro-allied industries.



This lending scheme is governed by the Small Industries Development Bank of India, also called SIDBI. Eligible candidates can acquire soft and term loans for their startups to fulfill the required or mandatory debt-equity ratio. Then, they can utilize the money to commence a micro, small, or MSME (medium-sized business). This approach prioritizes the manufacturing and service sectors.


PMMY (Pradhan Mantri Mudra Yojana):

MUDRA’s scheme offers collateral-free or without the requirement of collateral loans to non-farm small-scale and micro firms and non-corporate bodies. Its benefits are:


  • No payment penalties for making early payments.


  • A repayment period varies between 12 months to 5 years.


  • A lower interest rate for women. 


Under PMMY, the maximum loan amount is Rs. 10 lakh. To be eligible, business owners must be 18 years old and below the age of 65. In addition, they must have a strong repayment history with no previous loan defaults.


Credit Guarantee Scheme: 

The Government of India (GoI) launched this initiative to help the MSME sector’s loan delivery system flourish. CGS offers working and term capital loans of up to INR 200 lakh per person. Public banks, commercial banks, a few foreign banks, the State Bank of India, and Regional Rural Banks (RRBs), along with their other affiliate banks, are among the lending institutions.


National Small Industries Corporation Subsidy:

The Indian government established this scheme to assist MSMEs in obtaining raw materials and advertising. Its benefits include no-cost tenders, funding for land and buildings, and no security deposit. 


This scheme gives Small Scale Industries (SSIs) free access to bids. Furthermore, no security deposit is required for specific industries to apply for the loan. If the project cost is at most Rs. 25 lakh, the NSIC Subsidy Scheme will finance the land and building.


Final Verdict:


Many lenders can make business loans to aspiring entrepreneurs without requiring income tax reports. These loans are typically given to small-scale businesses such as dealers. 


Most lenders will take your bank statements or collateral, if you have any, and will not ask for your income tax returns statements. When you apply for a business loan without providing the lender with your ITR details, keep in mind that you will repay it at a higher interest rate and for a shorter period. You must also present a sound and well bank statement reflecting the lender that you will be able to repay the loan.


Typically, lenders do not define the minimum ITR needed for a company loan. The greater the ITR, however, the better the odds of acceptance. As previously stated, many lenders now provide company loans to start-ups even if they do not have an ITR.

While it may be tough, many banks and NBFCs do provide business loans to new entrepreneurs who do not have an ITR.

Yes, all types of firms can apply for a business loan without providing an ITR. However, loan application approval is solely at the will of the lender.

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