What is a Business Loan?

business loan is a loan taken to start a new business venture or grow a business.  

An individual/company can avail either a secured loan which is obtained against collateral or an unsecured business loan which is a loan without collateral.  

Collateral is basically an asset against which the loan is borrowed from the lender (The bank or the financial institution).  

New Business Loans 

To start and operate a business in this ever-growing price-competitive world has become very difficult and it proves more difficult, especially for new start-ups or new companies. Many start-up companies in fact have to shut down their business in mid-way owing to lack of funds or lack of steady flow of income.  

Funds are very much essential for a new business to emerge and also for the already existing businesses to operate & expand because funds are needed to cover the initial capital investment, the working capital, and day to day expenses of the business.  

Therefore, a need arises for business loans/new business loans.  

How to Get A Business Loan

Usually, to apply for a business loan an individual/company must present an ITR or collateral along with other documentation required by the lender.  

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ITR is proof of income that serves as a guarantee for the lender to at least get the interest. 

How to Get a Business Loan Without ITR

Individuals or start-up companies face challenges to apply for a business loan owing to the non-availability of ITR. And for their rescue, currently, there are various institutions present in the market offering business loans without the ITR.  

Business loan requirements to avail the business loan without ITR that an individual needs to furnish may vary from one institution to another, but they are almost the same and are as follows: 

  • A good credit score – this is mandatory for all the business loans (A credit score is nothing but the credit history of the applicant as to how much the credit is taken by the applicant, the repayment history, etc. It helps the lenders to decide on how much loan to be given and also provides them a hint on the loan repayment capacity of the applicant. High the credit score, the higher would be the loan amount being granted.) 
  • An Identity Proof 
  • Address Proof 
  • A detailed, well-designed, and well-documented business plan 
  • Business registration copy 
  • A copy of the rent agreement 
  • A copy of the Bank Statement 
  • Passport size photographs 
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Business loan without ITR becomes much easier if it can be applied against collateral but again it’s not necessary to have collateral. 

Important notes

Individuals/companies while deciding to apply for a business loan without ITR must duly note the following: 

  • The interest rate would be very much higher than the regular business loan. 
  • The period of loan repayment would be shorter comparatively. 
  • The bank account should have high than average monthly balance showing proper savings. 
  • Terms & Conditions, the Interest rate and the loan repayment the period being offered by several lenders to be compared before making a choice. 

Business Loan FAQs:

Who can apply for a business loan without ITR?

Anybody can apply for a business loan without ITR from Ziploan, like an Individual, a company (be it private limited company, limited liability partnership company, partnership or proprietorship from), a trust, Non-Governmental organization, etc. 

Is collateral necessary to obtain a business loan without ITR? 

No. Collateral generally provides an assurance to the financial lender if the borrower is not capable to repay the loan. 

Is a business plan necessary to obtain a business loan without ITR? 

Yes, if a business plan duly documented & presented is provided to a lender, there are high chances of getting the business loan.  

What is an instant business loan? 

Generally, a business loan is a tedious and time-consuming process whereas an Instant business loan from Ziploan is a loan that is offered within the shortest time period and also the process is very simple & quick. 

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