Who can apply for a GST business loan?

GST business loans are working capital loans provided by financial institutions to assist businesses in managing their cash flows post-GST implementation. Here are the key factors to consider while applying for a GST business loan:

• Business Entity: The loan can be availed by individuals owning businesses as proprietorships, partnerships, or companies registered under the Companies Act.
• Business Vintage: The business should have been operational for a reasonable number of years to demonstrate continuity and viability to be eligible.
• Annual Turnover: The business should have an adequate annual turnover to qualify for the loan. The specific amount will vary from lender to lender.
• GST Registration: To be eligible for the loan, the business must have a valid Goods & services Tax (GST) registration certificate and file regular GST returns.
• Credit Score: Financial institutions will prefer the good credit scores of the promoters/partners/directors when assessing their creditworthiness.
• Financial Documents: Businesses need to provide documents like ITRs, bank statements, financial statements, and GST returns to demonstrate adequate earnings and repayment capacity.
• Collateral: Some loan providers may ask for collateral security in the form of business assets to secure the loan in case of higher loan amounts.
• End Use of Funds: The loan has to be utilised only for approved business purposes like working capital, inventory purchase, etc and not for personal needs.