What Are the Eligibility Criteria for a Gold Loan for Business Expansion?

To avail a gold loan for business expansion, businesses must meet eligibility criteria such as:

• Business Vintage: Typically, most lending institutions require businesses to be registered and operational for at least 2-3 years. However, some lenders may also consider startups, provided they can demonstrate a solid business plan and potential for revenue generation.
• Age: Usually, applicants must be Indian citizens aged between 18 and 75 years.
• Gold Jewellery Requirements: Lending institutions usually require businesses to pledge gold jewellery that has a minimum purity of 18 to 24 carats and a minimum weight of 1 gram.
• Proof of Gold Ownership:  Applicants must provide proof of ownership (original invoices or purchase receipts) for the gold jewellery being pledged.
• Proof of Financial Stability: Applicants are often required to submit financial statements for the last 2-3 years.
• KYC Documentation: Applicants must submit mandatory KYC documents, including identity proof (Aadhaar card, PAN card, passport), address proof (utility bills, rental agreements), and recent passport-size photographs.
• Proof of Business Address: Typically, lending institutions require businesses to show proof of the registered address of the business (utility bills or lease agreements).
• Credit History: Lending institutions typically review both the applicant's and business's credit ratings to assess risk. While gold loans are secured against collateral (the gold), having a strong credit history can enhance eligibility.

These criteria are general guidelines and may vary by lender, so it's best to check with each one for specific requirements. Meeting these criteria shows lenders that a business owner can repay the loan, indicating financial strength and stability. This process is also quicker and easier than traditional business loans.