Starting your own business is no piece of cake. You’ll need to cross a wide range of obstacles before successfully reaching the finish line. And one of the challenges that most business owners face is the lack of funds to meet their business requirements.
Although borrowing business credit can help meet your expenses, you must submit various documents to get approval. This list of documents also includes ITR or Income Tax Returns, which may pose a problem for new entrepreneurs without ITRs. Luckily, you can get a business loan without ITR. But first, let’s understand what an ITR is.
What is an ITR?
Income Tax Return is a form in which taxpayers fill in information about their earned income and the tax applicable on it. An ITR primarily serves as proof of income for an individual and is used by lenders to gauge the amount of money they can lend to the borrower. Hence, without ITR business loan is a bit tricky to obtain, but it’s not impossible!
Additional Read: Business Loans: Fixed Rate vs Variable Rate
How to apply for a loan without ITR
Now, if you are a first-time business owner, you may not have any experience filing ITR, especially if you launched your venture a few months ago. However, this doesn’t mean that you are ineligible to apply for business finance. Several lending institutions offer business loans without ITR and income proofto budding entrepreneurs.
Here are a few tips for applying for business finance without ITR:
1. Maintain a healthy credit score
Let’s face it. A healthy CIBIL score is significant when you are applying for any loan. If you lack the required ITR, a high credit score can be your saving grace and prove your creditworthiness to the lender.
Furthermore, you can also increase your loan approval chances by borrowing from an NBFC or private financial institution instead of the public sector lenders.
2. Opt for a government scheme
The Indian government has introduced various loan schemes to help first-time business owners. What’s more, you can avail of these business loans without collateral or ITR. Some of these schemes include:
- Mudra loan
- Stand-up India
- PSB Loans
- PMEGP (Prime Minister’s Employment Generation Scheme)
3. Apply with a co-applicant
If your partner, mother, father, son, brother, or unmarried daughter are earning members with valid proof of income, you can avail of the loan with them as your co-applicant. This will increase your chances of getting approval on your loan application.
Documents required for a loan without ITR
- Identity proof
- Application form
- Photograph (passport sized)
- Detailed business plan
- PAN card (individual’s or company’s)
- Address proof
- Residence proof
- Incorporation certificate
- Partnership Deed or MoA
- Current account bank statement
- A rent agreement
- Shops and establishment certificates
Additional Read: Business loan or Overdraft: Which is Better?
To sum up
At Tata Capital, we believe that borrowing business finance should be possible for every business owner. Therefore, we offer loans without ITR and collateral for budding entrepreneurs, along with relaxed eligibility criteria and extended tenures to make repayment easier.
Visit our website to go through our interest rates and other features. Or, check your projected monthly EMIs using our business loan EMI calculator.