How to Get a Business Loan Without Income Tax Returns?

Mar 14th 2024
How to Get a Business Loan Without Income Tax Returns?

Whether you are looking to start a new business or want to expand an existing one, taking out a business loan is undoubtedly the best way to manage the capital requirements for this endeavor. And, at a time when numerous lenders are offering unparalleled deals on business loans, things may not be as complex as they were earlier. It is generally believed that if you have all the required documents, and you match the eligibility criteria, you can easily secure a business loan without much fuss.

Now, when it comes to taking out a business loan, the applicant must furnish several documents, including the Income Tax Returns of the last financial year. The major purpose of submitting these documents is to verify the applicant's actual income. These documents help the lenders in determining your business loan eligibility. But what if you don’t have the documents related to your income tax returns? Can you still get a business loan? The answer is yes. You can get a business loan even if you don’t have income tax returns. Let’s find out how you can do so in the following post.

Eligibility Criteria For A Business Loan:

Before we proceed further, let’s first take a look at the eligibility criteria for availing a business loan.

  • Individuals, cooperative societies, companies, sole proprietorships, trusts, NGOs, limited liability partnerships (LLPs), retailers, traders, partnerships, retailers, and manufacturers can take business or corporate loans.
  • Self-employed people, start-up businesses, and first-time business owners can also opt for a business loan.
  • The borrower's age should not be more than 22 years when he or she applies for a business loan.
  • The borrower's age shouldn't exceed 65 years at the time of loan maturity.
  • Depending on the applicant's profile and business specifications, a minimum loan amount of Rs. 10,000 and a maximum of Rs. 10 crores can be obtained.
  • In general, the applicant should have a CIBIL score of at least 700 to avail a business loan.
  • The business’s turnover rate tends to differ from one lender to another and is usually determined primarily by the lender.
  • It is not compulsory to provide collateral against a business loan.

You may also like: Get a Business Loan With Low CIBIL Score

Documents Required To Avail A Business Loan:

The next thing to check is the documents one needs to submit to avail of a business loan.

  • Application form duly filled out
  • Passport-sized photographs
  • Detailed business plan
  • Proof of identity: Voter's ID card, passport, driver's license
  • Proof of existence and address of the business
  • Individual, partnership, or company PAN cards
  • Residence proof: driving licenses, voter identification cards, passports, electricity bills, bank statements, and rental contracts.
  • Certificate of Incorporation of the Company
  • MoA (Memorandum of Association) or Partnership Deed
  • Rental agreements and certificates for shops and establishments
  • Bank statement for the current account
  • Income tax return for the past 2 or 3 years

The Importance of Income Tax Returns:

Put simply, one crucial purpose of submitting income tax returns is to prove that you are earning money from a source. This is an essential eligibility criterion adopted by a majority of banks and NBFCs before evaluating a business loan application.

There are two major objectives of submitting income tax returns:

  1. It establishes a ceiling on the amount that banks will lend you.
  2. It makes low-interest business loans available to you.

Examples of Obtaining Business Loans Without Income Tax Returns:

To illustrate how individuals or businesses can obtain loans without income tax returns, consider these scenarios:

  • Freelancer with Consistent Income: Atal, a freelance graphic designer, earns a steady income from various clients but hasn't filed income tax returns due to his freelancing nature. However, he was able to secure a business loan by presenting his client contracts, invoices, and bank statements showing his consistent earnings.
  • Newly Established Startup: Sara recently launched a small online boutique but hasn't generated enough revenue to file income tax returns yet. Despite this, she managed to obtain a business loan by presenting her detailed business plan, market research, and projections for future growth.
  • Family-Owned Business: The Patel family runs a successful restaurant but operates on a cash basis and hasn't maintained formal income tax records. However, they were able to secure a business loan by pledging their restaurant equipment and providing bank statements showing their daily sales transactions.

These examples demonstrate that while income tax returns are commonly used to assess eligibility for business loans, alternative documentation and financial evidence can still support loan approval.

You may also like: Top 7 Government Business Loan Schemes 2024


If you don’t have income tax returns and you still need finance for your business needs, you can explore the aforementioned options before actually applying for a loan. You can check both registered and unregistered lenders and compare their offerings before choosing a specific offer. At Investkraft, we provide hassle-free business loans to entrepreneurs and business owners at reasonable interest rates.


Q. What should be my minimum turnover to avail a business loan?

- In most cases, businesses applying for a business loan should have an annual turnover of Rs. 40 lakh. However, self-employed individuals should have a minimal annual income of Rs. 1.5 lakh.

Q. Can I get an unsecured business loan?

- Yes, if you have a good credit score, you can easily get a business loan without pledging collateral. There are many banks and NBFCs that offer unsecured business loans at attractive interest rates.

Q. I am a self-employed person. Can I get a business loan if I have a poor credit score?

- Yes, at Investkraft, we provide hassle-free business loans to self-employed individuals having a poor credit score.



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