The chances of getting a loan from a bank or any financial institution become lower as you grow older. This is because the risk of being unable to repay the loans grows as time passes. However, it is not necessarily impossible to get a business loan even after you retire from a job.
So, let’s explore how you can get a business loan even after retiring from a job.
How to get a business loan after retirement
While you still are working, you might simultaneously be running your own small business for extra income on the side. In that case, it is possible to get a business loan after your retirement, even after the age of 60. You need to qualify for the business loan eligibility criteria to get a business loan.
Business Loan Eligibility Criteria
The business loan eligibility criteria are as follows:
- Your age must be between 25 and 65 years old. Therefore, you have five years to take a business loan even after reaching the retirement age (estimated 60 years old).
- The business you run should be functioning and operating for three consecutive financial years.
- You must be in the same business for at least three years.
- Your business should show steady growth and profit over the past two years.
- The business loan is available to those businesses who have got their balance sheet and profit accounts reviewed by a certified Chartered Accountant (CA).
- Your CIBIL score should be above 700.
- Remember to categorise yourself as a self-employed individual after retirement to avail of the loan.
Documents required for business loans
To apply for a business loan, you would require the following documents:
- Your company’s bank account statement for the last six months
- Income tax returns of the last two years
- Profit and loss accounts and balance sheet of the past two years
- Your and your business’ KYC documents
- A detailed report on how you are going to utilise the loan amount
- Identify proof (Aadhaar Card/PAN Card/Voter ID/Passport/Driving Licence)
- A business proof
- Your bank statements
What is a business loan EMI calculator?
After retiring from a job, without a steady flow of income, it might be difficult to repay the loan amount. To reduce the risk, you should be aware of particulars like the business loan interest rates and the Equated Monthly Instalment (EMI) you need to pay. To calculate the correct EMI amount, you can use a business loan EMI calculator, which calculates the exact amount you need to pay every month to repay the business loan in fixed loan tenure.
To know how much EMI you need to pay, all you need to do is enter the business loan interest rates, loan amount, and loan tenure accurately. It is highly recommended to use a business loan EMI calculator before taking business loans.
A business loan is an unsecured loan with zero collateral requirements, so it serves many purposes—it can be used to expand production, grow your company, buy machinery, pay your employees’ salaries, and so on. You only need to convince the financial institution with an appropriate utilisation report of the loan amount and maintain your CIBIL score above 700.
Although getting a business loan after retirement may be difficult, many financial institutions offer business loans for people over the age of 60. You just have to keep in mind that you and your business need to fulfil all the eligibility criteria to take a business loan. Keep all the necessary documents ready beforehand for hassle-free processing.