How to Get Quick a Business Loan in Lucknow without Any Security or Guarantee?

More than 60% of total handicraft exports of Uttar Pradesh originate from Lucknow.

Several small-scale industries, especially Zardozi and Chikan, operating here tend towards business loans to finance their operations. Other than handicrafts, textile is another prime sector found in this city. Availing a business loan in Lucknow involves minimal to no hassle, thanks to the several NBFCs operating here.

The city also houses of numerous other industries like brewery, tobacco, plantations, leather goods, brass products, silk, marble products, jewellery, and pottery.

Lucknow is one of the fastest developing and emerging cities in India also thanks to the presence of several large-scale industries, as well as IT companies.

Business loans are the ideal financing solutions for several of these sectors. These loans are essential both for emergencies and expansions. Also, business loans are unsecured or collateral-free – you don’t have to mortgage an asset to avail them.

However, you do have to satisfy the following terms and conditions to apply:

 

  • Minimum credit score of 750

 

Unsecured loans don’t have an asset backing; hence, financial institutions look for customers who are creditworthy and can repay the loan without defaulting. To ensure that, they check the CIBIL score.

A credit score of 750 or above makes an applicant eligible for a business loan in Lucknow. Applying with a low CIBIL score is one of the most common reasons why a business finance is rejected.

A credit card is what you need to improve your CIBIL score, if it is low. You only have to pay the total outstanding amount within the due time and keep your credit utilisation under 30% of your credit limit to increase your score swiftly. Availing secured loans is the other alternative.

Do note that you may also need to hold a high CIBIL score to apply for credit cards from some lenders. In such cases, apply for a secured credit card sanctioned against a fixed deposit.

 

  • Eligibility criteria

 

You have to meet the following business loan eligibility to apply:

  • Age between 25 and 55 years.
  • A business that is at least 3 years old.

 

  • Necessary documents 

 

Financial institutions need you to produce the following documents to avail a business loan in Lucknow:

  • KYC documents – Voter ID, Passport, PAN, Aadhaar, Driving Licence, etc.
  • Documents related to business proof – GST registration certificate, Partnership Deed, Trade Licence, Memorandum of Association, Articles of Association, Registrar of Companies registration certificate, SEBI registration, etc.
  • Address proof – Latest electricity/telephone/post-paid mobile phone bill, house rent agreement, municipality tax, any KYC with the permanent address, etc.     
  • Financial documents of the previous year audited by a CA.
  • Bank account statement of the last 6 months.
  • Income tax returns of at least the previous year.

The above list is indicative; you may have to provide additional documents as well.

 

  • Low debt-to-income ratio

 

The debt-to-income ratio or Fixed Obligation to Income ratio (FOIR) is a parameter that financial institutions assess as an important eligibility criteria. It is the ratio between your fixed monthly obligations and income.

NBFCs give more preference to customers who have a debt-to-income ratio of 50% or lower. A lower ratio means you have more cash-in-hand to pay the loan EMIs without making these a burden on your income.

Fulfil these terms and conditions before you apply. Also, compare the business loan interest rate and charges when looking for lenders in Lucknow. Availing a loan is one of the ways to build a successful manufacturing business.

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