What if my business is not GST-registered?

If your business is not registered under GST, availing a GST business loan can be challenging. Here are the implications and options:

• Most loan providers will make GST registration mandatory to extend a business loan. Being unregistered may lead to outright rejection.
• Financial institutions rely on GST returns to assess revenues and get comfort on the formal nature of business. Without GST, alternative proofs become critical.
• You can check if any financial institutions offer loans to unregistered businesses based on income tax returns, bank statements, etc. However, interest rates may be higher.
• For smaller loan requirements, some Non-Banking Financial Companies (NBFCs) and microfinance institutions may consider lending without GST registration.
• If your turnover is below the GST threshold limit, you can represent the same to the loan provider along with the CA certificate.
• If eligible, apply for voluntary GST registration to improve your loan eligibility. Later, de-register if your turnover remains below the threshold.
• For new businesses, GST registration may not be mandatory. Loan providers can check other proofs, like projected financials.
• Consider term loans against property or other assets if unable to get a GST business loan.