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Business Loan For Self-Employed

A business loan for the self-employed is a kind of business loan that financial institutions provide to architects and consulting businesses to hire skilled employees, purchase equipment, renovate offices, and market the business. As a business owner, you have to be supported by the right amount of finance for all your activities. Getting unsecured business loans with flexible repayment tenures is a viable option.

A business loan for the self-employed is the most suitable financial instrument to meet your short-term finance and working capital requirements. In a competitive financial market and growing economy, businesses require the best possible funding to grow. Apply for a business loan on CreditMantri. We have 26-plus lenders giving business loans at affordable interest rates. We provide a hassle-free process, quick loan approval, and fast disbursal of money.

Features and Benefits of Business Loans For Self Employed

  • Flexible Repayment Tenures: Business loans for the self-employed come with flexible repayment tenures.
  • Affordable Interest Rates: Banks and NBFCs provide business loans for the self-employed with competitive interest rates. The rate of interest is affected by the term of the loan, the collateral, and the borrower’s creditworthiness. NBFC lending options come with nil processing costs and prepayment penalties.
  • Business Expansion: Expenses related to manufacturing and expanding the products and services are usual reasons for getting a business loan. The product line must be developed for business expansion. This is a business strategy employed by several businesses since it helps them to grow by diversifying the methods they use for advertising their goods and services.
  • Improves Credit Score: Your company’s credit score improves by getting business loans. Enhancing the credit score of your business will lead to improved cash flow. You will be accepted for a wide range of funding options with a strong credit score. Taking a small business loan and making timely repayments of your EMIs will help you to establish your credit score. Continuing to make timely repayments of your bills and EMIs will help in maintaining your credit score.
  • Both promotions and funding are increased: All businesses want to see their name become popular on social media. Once you have the cash, you will get more chances to advertise yourself, apply advertising techniques, and run successful ad campaigns.
  • Liability Free: A business borrower does not require collateral or a certain income level in order to be approved for a business loan. This will be highly helpful for a small firm that is just getting started and needs funding to meet both its immediate demands and ensure long-term growth.
  • Tax Saving: You will be eligible for certain tax exemptions when you avail of a business loan. This will reduce your tax liabilities considerably.
  • Equipment Purchase: A business loan will help you buy the much required equipment that is needed to elevate and improve your business.

Eligibility For Availing Business Loan For Self-Employed

For self-employed individuals

Criteria Notes


Minimum 22 and not more than 65 at the time of loan application

Occupation Type

  • Self-employed
  • Can operate a proprietorship firm, private limited company, or partnership firm

Current Business Experience

At least 3 years

Total Business Experience

5 years

For Enterprises

  • Enterprises with a minimum turnover of Rs. 10 Lakhs
  • Enterprises that have been making profits for the past two years
  • Enterprises with a minimum annual income of (ITR) of Rs. 2 Lakhs per year

Note: The eligibility criteria may vary across lenders.

Documents Required For Self-Employed Individuals


Recent photo

Valid identity proof

PAN card, driving license

Valid address proof

Electricity bill, passport

Bank Statements

Bank statements

Income Proofs

Latest ITR with income computation

Profit and Loss Account and Balance Sheet for the last 2 years (audited by a certified CA).

Continuation Proof: ITR/Trade License/Sales Tax Certificate

Other Documents

Certified copy or partnership deed or sole proprietorship declaration

Certified true copy of Memorandum and Articles of Association (Certified by Director), and board resolution (Original).

Documents For Self-Employed Private Limited Companies and Partnership Firms

Residence Proof

Either of the following:

  • Telephone bill
  • Electricity bill
  • Ration card
  • Passport
  • Lease agreement
  • Sales tax certificate
  • Trade License

Bank Statement

For the last 6 months

Income Documents

Balance Sheet, ITR, and Profit & Loss Account (audited by CA) of the past 2 years

Continuation Proof

Trade License/ Sales Tax Certificate/ITR

Other Documents

PAN Card

Certified copy or sole proprietorship declaration of partnership deed

Certified true copy of Memorandum and Articles of Association (Certified by Director)

Board Resolution (original).

Documents For Self-Employed Non-Professionals

Identity Proof

  • Driving License
  • PAN Card
  • Voter ID Card
  • Passport
  • Aadhar Card (PAN card for sole proprietorship)

Bank Statements

For the last 6 months

Income Documents

IT returns and sales tax returns of the past 3 years.

Note: The list of documents specified above is general. The documents may vary across lenders.

How To Apply For A Business Loan For The Self-Employed

On The CreditMantri Website

1. Visit CreditMantri and Check the various Business loans available

2. Click on “Check Eligibility”

3. Enter basic details like email ID, mobile number, full name as per PAN, loan amount requested, date of birth, residence pin code, residence city, gender, and marital status.

4. Click on “Next”

5. Proceed with the remaining \steps to complete the application

On The Lender’s Website

1. Log in to the vendor’s official website.

2. Go to the Business loans section

3. Click on “Apply”

4. Provide the necessary details and continue to complete the application.

Offline Application

1. Walk into a branch of the vendor.

2. Fill out the relevant form

3. Submit the required documents and the completed form

4. You will get a call from the lender regarding the next set of steps

Things To Consider Before Applying For A Business Loan For Self Employed

  • The Interest Rate and Loan Terms: The interest rate is one of the most important factors that influence a business loan for self-employed. You have to check if the interest rate is affordable and if you can repay the loan on time. Compute the EMI before applying by using a business loan EMI calculator. You can choose the repayment tenure also according to your repayment capacity.
  • Existing Debt: Your current debt will have a major impact on the approval of your business loan for self-employed application. If you have too many loans to repay already, then there is a high probability that your business loan application will get rejected. Lenders will feel that you may not be able to repay the loan since you have too many in hand. Also, every time you apply for a loan, the creditor will make a request to look into your credit file to determine how much risk you pose as a borrower. This is called a hard inquiry. These inquiries will go into your credit report. It could cause your credit score to dip by a few points. But, regularly repaying your loans will cause it to increase again.
  • Eligibility Criteria: It is important to check the eligibility criteria before you apply for a business loan for the self-employed. You can avoid the rejection of your loan application by knowing the eligibility criteria beforehand.
  • The Scope of The Market for Your Business: Evaluate the market conditions of your industrial sector. Assess if it gives enough income for you to repay the loan. If you don’t repay your loan EMIs in time, it will affect your credit score and your future funding.
  • Compute Your EMI: Compute the business loan EMI before you apply for the loan. Before you generate the final figure for your EMI, deduct the overhead expenses such as rent, salary etc. This will help you get the correct value for your EMI.


Many banks and financial institutions provide business loans for self-employed people at competitive interest rates. But, you have to check your eligibility, keep the documents ready, check the scope of your industry, and other things listed on top to ensure that you can repay your loan on time.

FAQs of Business Loan For Self Employed

1. How can I repay my business loan?

You can repay the business loan in equated monthly installments. The loan can be repaid through post-dated cheques. You can also repay via an ECS mandate to your bank.

2. Why does a self-employed business owner need a loan?

A business loan for the self-employed can be availed to meet expenditures such as expanding operations, meeting working capital requirements, purchasing Equipment or machinery, investing in infrastructure, stocking inventory, and purchasing raw materials.

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