Who is eligible for a working capital loan?

Retailers, manufacturers, service providers, partnership firms, private and public limited companies and sole proprietors are typically qualified. Credit score for business loan application, the majority of lenders evaluate age, business vintage and turnover; a CIBIL score of 700 or higher is usually required. The business must have been established for a minimum of 2 years, and the applicant must be between the ages of 21 and 65.

What documents are required for a working capital loan?

KYC proofs (Aadhaar and PAN), business registration certificates, audited financial statements, ITRs for the previous two years and bank statements for the previous six to twelve months are among the usual paperwork. Since lenders are increasingly using GST-based loan eligibility to evaluate income transparency and creditworthiness, businesses that have registered for GST must also submit their GST filings. Lenders may have different lists, so it's best to confirm the criteria beforehand.

What turnover is needed to qualify?

The turnover requirements differ across lenders. Most banks and NBFCs expect a minimum annual turnover of ₹10 lakh, while some digital lenders may accept businesses with a lower revenue threshold. Higher and more consistent turnover generally leads to better loan terms and a higher approved amount.

Can new businesses apply for a working capital loan?

Conventional lenders often demand a two-year minimum business vintage. However, if they can show a solid business model and sufficient cash flow, certain NBFCs and digital lenders will grant working capital financing to companies that have been in existence for as little as three to six months. Newer businesses can also benefit from collateral-free funding through government-backed programmes like PMMY (Mudra Loans).

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Working Capital Loan Eligibility: Criteria, Documents & Approval Tips

Check working capital loan eligibility, documents required, and approval steps. Learn who can apply and how to improve approval chances in India with My Mudra.

Anjali Singh

Assistant Manager

Published Date:Jul 1, 2026

Frequently Asked Questions

Anjali Singh

Assistant Manager

Hey there, I'm Anjali Singh. With over 6 years of experience in finance, I specialize in creating content on banking, loans, and financial planning. My goal is to simplify complex financial topics and help readers make informed decisions through my articles.

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