Getting business loans without an ITR is possible in today’s market – a significant con- they come at higher interest rates. Barring this, various banking facilities, such as ourselves, readily offer loans without need for an ITR to be filed.
The importance of ITR
An ITR is a document that serves as proof of income. Banks use this to gauge how much money can be lent to an individual with a guarantee of him for paying it back. It also serves as a sign that the individuals’ income is enough for the interest payments to be kept up with.
So an ITR serves as:
- A benchmark for the extent of money length
- An easier way to avail of low rates of interest.
Reasons to want to get business loans without ITR.
- New businesses may be inexperienced at filing ideas.
- Lack of necessary documents
- Maybe starting a business after a period of unemployment. However, it is unfair to assume the business will not generate enough income to repay the loan.
Individuals/businesses eligible to get a business loan without ITR
- Sole proprietorships
- Cooperative societies
Criteria to be filled to avail a business loan without ITR
65 at the time of loan maturity
10 crore or more
As close to 900 as possible
Best avenues to avail your business loan from without ITR
- Banks – Both private and public banks offer business loans without checking the appropriate ITR. However, these are harder to find. There are very few banks that extend this facility. It is difficult for banks to gauge the repayment capabilities of an individual/business without looking at the ITR.
- NBFCs and MFIs – Easier to get, but the interest to be paid is substantially higher.
- Application form
- Photograph (passport sized)
- Business plan- the better and well planned, the higher the chances of getting a loan
- ID proof
- Proof that the business is up and running – Address proof is good evidence
- PAN card of business or individual as per availability and requirement
- Incorporation certificate
- A rent agreement
- Current account bank statement
Easy ways to avail the business loan without ITR
- Schemes introduced by the government of India can be looked into. For many of these loans, no collateral is required. To see which ones offer loans without checking ITR, log on to the official website
- If the collateral is available- In case the individual cannot present an ITR but has personal property, this can be mentioned when applying for a business loan. This further eases the process of getting a loan without an ITR.
Providing personal property as collateral, when it comes to applying for a business loan without ITR or otherwise, makes the process easier.
In most cases, even when an ITR does not have to be presented to the bank to get a business loan, a bank statement of the current account is demanded for a minimum of a period of 12 months.
Business loans that are granted without having to present an ITR are mainly tailored for small scale trade. As small scale trade is escalating, with more start-ups coming up every day, the options for business loans being available without an ITR to have gone up.
This has been done, mainly, keeping in mind that a large sector of these new businesses will be started by individuals who have not previously owned any business.
The main things to be kept in mind, when choosing to apply for a business loan without an ITR is that:
- The tenure to pay the loan amount is going to be shorter.
- The interest rate is going to be substantially higher.
- Strong bank statements will be demanded.
Even so, the process of getting one without an ITR is a lot easier than it was in the past. This is to encourage more economic activity in the country.