Business Loan Eligibility

Business Loan Eligibility & Requirements

Customised solutions for your business to take on new heights!

We know that your business is built with a lot of hard work, sincerity and responsibility. We respect these qualities and offer all businesses with some of the best growth solutions in the market. To achieve this, SMFG India Credit blends design, technology and personalized services to create meaningful relationships with you and your business. Our eligibility criteria include factors related to both, you and your enterprise. To calculate your business loan eligibility, use business loan eligibility calculator.

Eligibility Criteria for a Small Business Loan (Individuals & Enterprises)

• Self-employed individuals, proprietors, private limited companies, and partnership firms working in manufacturing, trading, or services.
• Individuals who have been engaged in the current business for at least three years with a total of five years of business experience.
• Individuals should be at least 22 years of age while applying for the loan, and less than 65 years of age at the time of maturity.
• Enterprises with a minimum turnover of 10 Lakhs.
• Enterprises making profits for the past two years.
• Enterprises with a Minimal Annual Income (ITR) of 2 Lakhs per year.

If your requirement is for more than 75 Lakhs*, we offer business loans that are secured with property. The eligibility criteria, interest rates and documentation in such cases will be different. For more details, please check out the SMFG India Credit Loan Against Property for SMEs section.

Please note that the above list is not exhaustive. There might be additional documents required for the business loan at the time of verification, depending on your application and the company’s policies. Speak with our customer care representative to learn more!

What are the Customer Profiles Considered for Business Loan Eligibility?

• Self-employed professionals (SEP): Chartered accountants, architects, company secretaries, and allopathic doctors who are currently engaged in their profession.
• Self-employed Non-Professionals (SENP): Under this profile, we consider retailers, proprietors, service providers, traders and manufacturers.
• Entities: Any private limited company, limited liability partnership, partnership, or closely held limited company is eligible to apply for a business loan. For entities whose requirements are more than 75 Lakhs*, please visit Loan Against Property for SME.

Factors that Determine Business Loan Eligibility

Getting a business loan requires meeting specific criteria. Lenders consider several factors, including the following:

• Nature of Your Business: Lenders evaluate the industry your business operates in, with seasonal businesses finding it more challenging to get a loan.
• Credit Score: Maintaining a good credit score, ideally 750 or higher, is crucial, as it demonstrates creditworthiness and helps lenders evaluate risk.
• Existing Debt Obligations: The more debt you have, the more liabilities you have, which can hinder your ability to repay a business loan.
• Positive Cash Flow: Positive cash flow indicates financial health, and lenders analyze business earnings before approving a loan.

These are some factors that influence lenders when making decisions to approve business loans.

How to Improve Your Eligibility for Business Loan?

Here are some tips to help you improve your eligibility for business loans:

• Maintain Your Credit Score: A higher credit score makes you a more attractive borrower, showcasing your reliability to lenders.
• Complete Documentation: Ensure all required documents are in order to avoid rejection. Check the lender's website for a checklist and gather everything beforehand.
• Craft a Strong Business Plan: It’s advisable to provide lenders with a detailed business plan, highlighting your transactions and lowering the perceived risk.
• Consult Your CA: Seek guidance from your CA or business analyst before applying, ensuring you're on the right track financially.

How is Business Loan Eligibility Calculated?

When you apply for a loan, the lender evaluates your eligibility based on a variety of factors. These factors include your credit score, which is a numerical representation of your creditworthiness; your tax record, which provides information about your income and tax payments; and your debt repayment record, which shows how you have managed your debts in the past. If you are curious about your eligibility for a loan, you can use an online eligibility calculator that takes into account these and other relevant factors to provide you with an estimate of how much you might be able to borrow.