Business loan without ITR

Last Updated: 14 Oct 2024

If you are an aspiring entrepreneur looking forward to turning your business dream into reality, the idea of providing income tax returns may deter you. What if we say that there are several strategies that allow you to get a business loan return without the requirement of traditional documentation concerning ITR?

Yes, you heard it right! Read thoroughly till the end to explore an alternative path to financial success and take the journey of your entrepreneurship to a new level. But before that, let’s start with what ITR is.

What Is ITR?

ITR refers to Income Tax Return which is basically a document that needs to be filed by businesses and individuals with the tax authorities for reporting their income, tax liabilities, and tax deductions for a particular financial year. The primary purpose behind filing an ITR is to ensure compliance with the law concerning taxes and provide the government with adequate information about the income and tax payments of businesses or individuals.

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How To Get A Business Loan Without ITR?

Obtaining a business loan without ITR might seem challenging, but it’s not impossible. While most lenders require ITR as proof of financial stability and income, one can explore alternative approaches. Below are mentioned some approaches that will help in securing a business loan without relying entirely on ITR.

• Provide Detailed Bank Statements:

  You can provide the lender with your detailed bank statement to evaluate the cash flow of your business, the history of the transaction, and the overall financial stability and health of your organisation. Make sure your bank statement entertains a consistent record of revenue and deposits. This will serve as evidence of the ability of your business to generate steady income.

• Prepare Financial Statements:

  Another way of securing a business loan without ITR is to prepare detailed financial statements of your business enterprise, such as profit and loss statements, cash flow statements and balance sheets.

  These documents offer a comprehensive overview concerning the company’s financial position. Moreover it also determines your revenue streams, profitability, and expenses, among many more. These can be considered by your lender to assess your chance of eligibility for a business loan as well as assess your financial position.

• Ensure A Good Credit Score:

  Building a solid credit score can also offer you a way out of avoiding the requirement of submitting TR for availing of business loans.

  To maintain a strong credit score, make sure you have a good payment history, your credit utilisation is low, and you entertain a positive relationship with your creditors and suppliers. This will increase your chance of securing a loan even without ITR.

• Opt For A Guarantor or Collateral:

  You can also offer collateral to your lender as inventory, property or equipment to act as loan security. By providing valuable assets, you will be able to reduce the risk of the lender, making it more likely for them to provide you with a loan. Additionally, you can also look for a guarantor for your loan, a trusted individual with a solid financial background who is willing to help you.

• Search For Non-Traditional Lenders:

  Look for alternative lending options like peer-to-peer lending platforms, online traders and microfinance institutions that tend to entertain more flexible requirements and may not put emphasis on ITR. Don’t forget to assess the terms and conditions of the loan, the rate of interest, as well as the lender’s credibility before making your final decision.

• Look For Industry-Specific Loans:

  Research industry-specific loan programs which cater to the particular field that your business involves. There are several government entities and organisations that offer unique financing options especially tailored to the specific needs of a particular sector. These programs mostly come with different eligibility criteria making ITR less significant in the entire procedure of loan evaluation.

  However, while all these strategies can help you get a business loan without ITR, they require careful documentation and preparation. Maintaining the correct financial records, presenting a clear business plan, and confidently approaching them with a lot of growth potential for your business is essential.

  This will enhance your chances of securing the necessary funds to fuel your business without the traditional documentation process involving ITR.

Business Loan Eligibility Without ITR

The entities which entertain the eligibility of obtaining business loans without ITR are as follows:

• Start-up business organisations
• Business owners who have recently entered the market
• Professionals who are self-employed

What Are the Eligibility Criteria For Obtaining Business Loan Without ITR?

If you are looking forward to securing loans without ITR, you must meet some essential eligibility criteria, all of which are listed below:

• The applicant must be at least 18 years of age at the time of application for the loan, and the maximum age must be 65 during its maturity.
• The applicant’s credit score must be above 750. A credit score near 900 is regarded as ideal.
• The requirement of a co-applicant is optional, depending on the nature of the applicant.
• A specific amount of annual turnover is necessary, which is mainly determined by the lender and differs from one bank to another.

What Are The Documents Necessary For Obtaining Business Loan Without ITR?

The documents that are necessary for securing a business loan without ITR are listed below:

• Filled application form with a passport-sized photo
• Proof of identity such as driving license, aadhar card, or voter card
• Proof of address along with the evidence of business existence
• Bank statement for the last 12 months
• Company’s PAN card
• Certificate of incorporation of the company
• Certificates of business establishment and agreement of rent
• Other documents that the lender requires.

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Final Thoughts:

In conclusion, securing business loans without ITR is possible. But since different financial institutions offer loans according to their own terms and conditions, it is essential to go through every detail thoroughly. This will prevent you from further complications and confusions concerning the rate of interest, charges of foreclosure, and repayment tenure, before making your decision and finalising the total loan amount. Also, ensure that all the terms and conditions align with the requirements of your business.