Business loans: the partner playbook

The right customer

• Businesses with at least 3 years of vintage and filed GST returns
• Turnover that is steady or growing across the last two years
• Average bank balances that comfortably cover the proposed EMI
• Steer away from: businesses with frequent cheque bounces, cash-heavy turnover with thin banking, or recent GST non-filing

What lenders look for

• Banks want audited financials and clean banking, and give the best rates to established businesses.
• NBFCs are the core market: faster, more flexible on vintage, and priced higher.
• Fintech lenders use GST and banking data directly and suit smaller, shorter loans.

Documents to collect

• PAN of the business and owners
• GST registration and 12 months of returns
• 12 months of bank statements for the main account
• ITR, computation and financials for 2 years
• Business registration proof

Common rejection reasons

• Cheque or EMI bounces in the last six months
• Banking turnover far below GST turnover
• GST returns not filed on time
• High existing debt against the business
• Business vintage below the lender's minimum

A worked example