NBFC business loan is usually offered without collateral. And they are the best option for small businesses who cannot offer collateral. Additionally, the eligibility for business loan in India is also very easy to meet. In this blog, we shall discuss about the business loan eligibility criteria for NBFC business loan and the documents required for it.
Setting up and running a business successfully is not an easy task. One of the biggest challenges for the small business owners is to arrange for adequate funds to run and sustain a small business. A bank and NBFC business loan is the best option for them to increase their finances.
Well, not all micro, small, and medium enterprises have a good credit history and usually could not provide collateral to avail a collateral business loan from the bank. This is why NBFC business loans are gaining popularity since they require a relaxed credit score requirement and are offered without collateral.
What is an NBFC?
An NBFC is a Non-Banking Financial Company which is registered under the Companies Act, 1956. NBFCs help meeting MSMEs their fund requirements by offering them loans. They should not be mistaken for banks. NBFCs cannot conduct the transferring of money and they do not accept demand drafts and cheques, unlike a bank.
Now let’s get acquainted with the business loan eligibility criteria that the NBFCs follow while offering NBFC business loan.
Also Read: Flexi Business Loans: Advantages For MSMEs
The loan eligibility criteria for availing an NBFC business loan are as follows:
- The business should be in operation for the last 2-3 years, at least.
- The business must have a minimum turnover of INR 10 lakhs in the last year.
- The ITR of the previous year should be more than INR 2.5 lakhs.
- The residence of the business owner should not be used as the small business premise.
- The small business owner should own either the business premise or a house.
Documents Required for an NBFC Business Loan
This is one of the major benefits of availing a business loan for NBFC. NBFCs usually require minimal documents for a business loan for the approval. Thus, the small business owner is not required to waste his time in collecting the pile of documents. The small business owner must submit the following documents:
- Address proof and residence proof.
- PAN Card.
- ITR of the last 2-3 years.
- Bank statement of the past 12 months.
Now the real benefit of availing an NBFC business loan is that the applicant is not required to visit the lender’s office in person. They can apply for a business loan online and also upload the PDFs of the required documents on the lender’s website. All these factors make NBFCs an ideal option to avail a small business loan.
ZipLoan is an RBI registered NBFC that offers unsecured business loans of up to INR 1-5 lakhs. We require a minimal list of documents and disburse the business loan within a few working days.