What are the requirements for GST business loan eligibility?

GST business loans can be availed by various types of business entities, including private limited companies, sole proprietors, public limited companies, and partnership firms. The key eligibility criteria for a GST business loan are:

1. Business Registration: The business must be formally registered as a legal entity, such as a private limited company, LLP, partnership firm, etc.
2. GST Registration: The business must have a valid GST registration and be filing regular GST returns in compliance with tax laws.
3. Business Age and Turnover: Financial institutions generally have criteria for minimum years (typically 2 years) in business and annual turnover to assess the creditworthiness and repayment capability of the applicant.
4. Credit History: Many loan providers check the personal credit score and repayment history of the business promoters/partners/directors to gauge their creditworthiness for the loan. A score of 700 or higher is typically preferred to assess creditworthiness.
5. Documentation: Proper documentation, such as identity proof, address proof, business registration, GST returns, ITRs, recent bank statements, etc., needs to be submitted as part of the application.
6. End Use of Funds: The GST loan has to be utilised for approved business expenses only.