How does cash flow impact my ability to secure a business loan?

When applying for a business loan in India, cash flow is one of the most critical factors lenders consider. Lenders require proof that the business generates stable, sufficient monthly revenue to cover operating expenses and repay the loan amount on time. They typically review cash flow statements (often for the previous 6–12 months), besides bank records to assess the business’s ongoing financial health and repayment capacity.

A strong and consistent cash flow signals to lenders that the business is financially healthy and likely to make timely repayments, which increases the chances of loan approval and may secure better terms.