Check your eligibility
What These Loans Fund
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Initial working capital and invent...
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Equipment and setup costs
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Premises deposit and fit-out
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Initial marketing and launch spend
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Hiring during the first operating...
Who Can Consider This Loan?
- Business vintage, commonly two to three years of operations
- Minimum annual turnover set by lender and segment
- Profitable operations, or a demonstrable path to profitability
- Clean banking conduct with no cheque returns
- Promoter credit scores, which lenders assess alongside the business
- GST registration and filing compliance, where applicable
What May Not Be Funded?
- Amounts above the applicable scheme limits
- Businesses in sectors excluded from the schemes
- Promoter drawings and personal expenses
- Speculative activity of any kind
- Businesses without required registrations and licences
Always check the sanction letter before you commit.
Why Choose Wealth & Covers?
- Expert advice to choose the right plan
- Plans from leading loans companies
- Hassle-free process and documentation
- End-to-end support, including claim assistance
- Dedicated relationship manager
- Expert Guidance Personalised advice from experienced loans professionals.
- End-to-End Support From choosing the right plan to claim assistance, we are with you always.
- Claims Assistance Hassle-free claim support to ensure you get what you deserve.
- Transparent Process Clear information, easy documentation and a hassle-free experience.
Overview
Conventional business lending is built around vintage — two or three years of financials a lender can read. A start-up has none, which is why ordinary business loan applications from new ventures are usually declined regardless of how good the idea is.
The realistic routes are different. Government-backed schemes such as the Mudra scheme and the CGTMSE credit guarantee framework exist precisely to fund businesses that banks would otherwise refuse, by guaranteeing part of the lender's exposure. For an early-stage business these are usually the most accessible formal credit available.
The other honest observation is that a promoter's personal profile carries most of the weight. A strong personal credit score, relevant experience and some own capital in the business will do more for an application than a polished projection.
Who should consider it
New businesses in their first two years. First-time entrepreneurs. Businesses eligible for Mudra, CGTMSE or state-level schemes. Promoters with strong personal credit but no business track record.
Benefits
- Access to formal credit without the usual vintage requirement
- Government schemes provide collateral-free funding within limits
- Credit guarantee schemes reduce the lender's risk and improve approval odds
- Rates below informal or unsecured alternatives
- Builds a formal credit record for the business from the outset
- Longer tenures than ordinary unsecured business loans
What the loan funds, and what it does not
Read the right-hand column first. It is the one that decides how much you have to arrange yourself.
Usually funded
- Initial working capital and inventory
- Equipment and setup costs
- Premises deposit and fit-out
- Initial marketing and launch spend
- Hiring during the first operating period
Usually not funded
- Amounts above the applicable scheme limits
- Businesses in sectors excluded from the schemes
- Promoter drawings and personal expenses
- Speculative activity of any kind
- Businesses without required registrations and licences
Funding limits and the treatment of add-ons vary between lenders and move with the borrower profile. The sanction letter you receive is what governs — we will walk you through it before you sign.
How it works with us
- 1 We read your financials before approaching anyone Turnover, margins, banking conduct and existing obligations. Lenders read the same numbers, and it is better to know what they will see.
- 2 Matched to lenders who write your segment Manufacturing, trading and services are underwritten differently. Applying to the wrong lender wastes weeks and marks your credit file.
- 3 Structure chosen before rate A term loan, a working capital line or an overdraft solve different problems. The cheapest wrong structure is still the wrong structure.
- 4 Documentation prepared properly, once Financials, GST returns, bank statements and projections in the format lenders expect. Incomplete files are the main cause of delay.
- 5 Sanction, disbursal and an eye on the covenants We flag the conditions attached to the sanction so a covenant breach is not the first you hear of a problem.
Important considerations
The things a brochure tends to leave out. Read these before you decide.
- Check scheme eligibility before approaching banks directly. Mudra and CGTMSE exist for exactly this situation and are considerably more accessible than ordinary business lending.
- Your personal credit score is doing most of the work. Repair it before applying if it needs repairing — it matters more here than the business plan.
- Put your own capital in. Lenders read promoter contribution as commitment, and an application with no own funds is a difficult one.
- Keep business and personal banking separate from day one. Mixed accounts make every future application harder to underwrite.
- Be realistic in the projections. Lenders see hundreds of these and an implausibly optimistic forecast damages credibility rather than helping.
Documents required
- Business registration — incorporation, partnership deed or proprietorship proof
- PAN of the business and of the promoters
- Last two to three years of audited financial statements
- Last two to three years of income tax returns with computation
- GST returns for the last twelve months
- Bank statements for the last twelve months
- KYC of promoters, partners or directors
- Existing loan sanction letters and repayment records
Frequently Asked Questions
Can a new business get a loan at all?
Through the right route, yes. Ordinary business lending requires two to three years of financials, which a start-up cannot provide. Government-backed schemes such as Mudra and the CGTMSE credit guarantee framework exist specifically to fund businesses banks would otherwise decline, and for an early-stage venture they are usually the most accessible formal credit available.
What matters most in the application?
The promoter. Personal credit score, relevant experience in the sector and the capital you have put in yourself carry more weight than the business plan. A strong personal profile with modest projections beats a weak profile with impressive ones.
Do I need collateral?
Not within the limits of the credit guarantee schemes, which is precisely their purpose. Beyond those limits, conventional lending rules apply and security is generally required.
How much own capital should I contribute?
As much as you reasonably can. Lenders read promoter contribution as a measure of commitment, and an application funded entirely by borrowing is a difficult one to approve regardless of the scheme.
What should I avoid doing?
Mixing business and personal banking, which makes every future application harder to underwrite; and submitting projections that are obviously optimistic, which damages credibility with people who read hundreds of them.
Want a shortlist instead of a catalogue?
Tell us the situation and an advisor comes back with two or three options that actually fit — and names what each one gives up.