Starting and growing a business can be a challenging task, especially when it comes to securing financing. In India, many entrepreneurs struggle to obtain business loans due to a low credit score or a poor credit history.
A low credit score or bad credit can make it difficult to secure a loan from traditional banks or financial institutions. However, there are still options available for those with low CIBIL scores or bad credit.
What is CIBIL Score?
CIBIL (Credit Information Bureau (India) Limited) is India’s oldest and most widely used credit bureau. It is responsible for maintaining the credit records of individuals and businesses in India.
A low CIBIL score can make it difficult for entrepreneurs to secure a business loan from traditional banks or financial institutions.
This can be a major roadblock for many entrepreneurs, but there are still options available for those with low CIBIL scores or bad credit.
In this blog post, we will be discussing seven ways to get a business loan for low CIBIL or bad credit in India.
How Can Someone with a Low CIBIL Score get a Business Loan?
1. Look for alternative lenders
Traditional banks may be hesitant to approve a loan for a business with low credit, but there are alternative lenders who specialize in working with businesses that have less-than-perfect credit.
These lenders may have more flexible requirements and may be more willing to work with you.
2. Government schemes
The Indian government offers several schemes that provide financial assistance to small and medium-sized enterprises.
These schemes include the Micro, Small and Medium Enterprises (MSME) scheme, the Pradhan Mantri Mudra Yojana, and the National Small Industries Corporation (NSIC) scheme.
The MSME scheme provides financial assistance to micro, small, and medium enterprises in the form of loans and subsidies.
The Pradhan Mantri Mudra Yojana is a government scheme that provides small business loans to entrepreneurs.
The National Small Industries Corporation (NSIC) scheme provides financial assistance to small and medium-sized enterprises in the form of loans and subsidies.
These schemes can be a great option for entrepreneurs with low CIBIL scores or bad credit.
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People from Mumbai who also read for various government schemes for availing of loans for starting small business
3. NBFCs
Non-Banking Financial Companies (NBFCs) are financial institutions that provide loans to businesses. These organizations may be more flexible when it comes to lending to businesses with low CIBIL scores or bad credit.
NBFCs typically have a more relaxed lending criteria compared to traditional banks. They may be more willing to take a chance on a business with a low CIBIL score or bad credit.
4. Angel investors:
Angel investors are wealthy individuals who invest in small businesses in exchange for equity. They may be more willing to invest in businesses with low CIBIL scores or bad credit, as they typically focus on the potential of the business rather than its credit history.
Angel investors can provide a valuable source of funding for entrepreneurs with low CIBIL scores or bad credit. They can also provide valuable mentorship and guidance to help entrepreneurs grow their business.
5. Family and friends
Asking family and friends for a loan or investment can be a good option for businesses with low CIBIL scores or bad credit.
These individuals may be more understanding and willing to take a risk on your business. However, it’s important to remember that borrowing money from family and friends can put a strain on relationships if not handled properly.
It’s important to have a clear repayment plan in place and to communicate openly and honestly with your friends or family members from whom you have borrowed the amount for your business.
6. Improve your credit score
Improving your credit score can take time, but it can also increase your chances of getting approved for a loan.
This can include paying off outstanding debts, keeping credit card balances low, and making sure to make payments on time.
People from Pune region who look for information on improving credit scores.
7. Crowdfunding
Crowdfunding is a way for entrepreneurs to raise funds for their business by asking for small contributions from a large number of people.
This can be an effective way to secure financing for a business, even if you have a low CIBIL score or bad credit.
Various Crowdfunding platforms such as allow entrepreneurs to raise funds for their business by asking for small contributions from a large number of people.
This can be a great option for entrepreneurs with low CIBIL scores or bad credit.
Click here to connect with the experts in case you are looking for a financial expert, for getting a better understanding of the credit scores for availing a business loan.
Hello team,
I need business loan . For export.
But my credit score is less.. that why i am not getting loan from any where.
Hey 👋 Pushparaj!
Though the ideal way to improve CIBIL score is to repay the outstanding dues, but in case if you have paid fully and the information is not updated on CIBIL, you can always raise a dispute on the official site of CIBIL by taking a paid subscription.
If that doesn’t help you to get loans, you can always form a new entity with no common Partners or Directors and apply for loan in new company based on confirm orders in hand
Regards
Mujhe business loan chahie tha इसके अलावा मेरे पास डाक्यूमेंट्स आधार कार्ड पैन कार्ड है और बिजनेस का सर्टिफिकेट है अब मुझे लोन मिलेगा नहीं मिलेगा मुझे मालूम नहीं मैं स्टार्टअप लोन के लिए चाहिए था अलोन कम से कम 10 से 2000000 रुपए चाहिए था तो मिलेगा नहीं मिलेगा मालूम नहीं सहयोग 7208253853 मेरा व्हाट्सएप नंबर है
Mujhe loan chahiye
Very good business
I need loan , but due to CIBIL problems not able to get it. If any provision is there I am ready to pay for it.
I need loan very very urgently. Plz help. In these 10 days monica need
Bad credit transporter ( Jain Roadways )
Udham registered ( 21/10/2021 )
ITR 2022-23 below 5 lacs.
Annual Turnover 18 lacs
Need a loan for 20-25 lacs to expand and start newly. Request any private lenders, Non-banking finances or anyone ready to give loan
Contact : Jainvijaykumar81@gmail.com
9579571226 ; Vijaykumar Jain
Pune ( PCMC ) Maharashtra 411033