How Small Shopkeepers Can Access Loans Without CIBIL Scores

Small shopkeepers can access loans without a CIBIL score; the key is to showcase current financial strength and repayment capacity. India Today coverage on the importance of formal credit for kirana store owners mentions how access to formal credit helps boost a shop’s growth by up to 35% YOY. Given its importance, it’s now easier to access credit with a low or no score. Here’s a detailed breakdown of how small shopkeepers with no CIBIL scores can get a loan. Let’s understand it in detail.

How to Obtain a Loan Without a CIBIL Score

As a small business owner, you may not have a score due to a few simple reasons: your business may be transacting mostly in cash, or you’ve never needed a formal loan or credit card before. This ‘new-to-credit’ status does not bind to bad financial suits; it simply means there is no data for a credit bureau to weigh. Here are a few ways that you can apply for a loan despite not having a score.

Show Consistent Business Income and Financial Conditions

A CIBIL score helps lenders understand if you’re capable of paying off loans on time and are financially responsible. So, in the absence of a score, you need to prove your repayment capacity to the lender by showcasing how your business is doing well.

Highlight your business’s regular cash flow via 6 to 12 months of bank statements. Along with this, have a clear business plan and projections for the future to further strengthen your application. You can also present your latest GST documents to highlight how financially strong your business is.

Apply for a Lower Amount

Another way to get a loan approved in such situations is by applying for a lower amount. Lenders see a low loan amount as a lower-risk scenario, making it easier for you to get loan approvals. In addition, a smaller amount makes it easier for you to repay your loan regularly, which in turn helps build a good credit profile.

Apply With a Co-Guarantor

Applying together with someone who has a strong CIBIL score or having a guarantor with a high CIBIL score can be very helpful. This provides the lender with extra security and significantly improves your chances of loan approval.

Use Business Assets as Security (Secured Loans)

A secured loan uses an asset as collateral, reducing the lender’s risk. Collateral for a shopkeeper usually consists of commercial property, residential property, fixed deposits, or even inventory. This can increase your chances of approval and also allow you to seek a higher loan amount or a lower rate of interest.

Finding the Right Lender for Your Needs

Not all financial institutions have the same lending criteria. For a shopkeeper without a perfect credit score, approaching the right lender is vital.

Consider NBFCs

Non-banking financial companies are a good choice for a small-time businessman since they put more weight towards cash flow from operations, operational history, and the future potential of your business. They usually have more flexible eligibility criteria than banks, especially for applicants with low or no CIBIL scores.

Approach MFIs

Microfinance institutions are another important source of credit, especially for shopkeepers in semi-urban and rural locations. These organisations cater mainly to small-ticket borrowers, offering flexible repayment terms with little paperwork. Instead of relying on the credit score, they usually want to back entrepreneurs who work at the grassroots level and who have community business models.

Explore Government Loan Schemes

The Government of India runs several financial inclusion schemes, with the Pradhan Mantri MUDRA Yojana (PMMY) being a key example. Such schemes are intended to give loans to non-corporate, small-scale businesses for non-agricultural purposes, without any kind of collateral. This makes them ideal for those who have yet to become part of the credit system.

Also Read: 10 Best Online Business Ideas Without Investment in India (2025)

To Conclude

Having a low or no CIBIL score doesn’t mean that you can’t get a Business Loan. Prove that you are capable of repaying the loan to your lender by showing that your business is doing well and the cash flow is regular. Along with this, you can try applying with a co-guarantor or applying for a lower amount to improve your approval chances.

If you’re looking for a lender with flexible terms, Poonawalla Fincorp has multiple loan options available to cater to your specific needs.

Frequently Asked Questions

Can I get the loan for my business without a CIBIL score?
Yes, many lenders, especially NBFCs and MFIs, consider that some small businessmen are just new to credit. They look into how financially sound or healthy the business has been on a day-to-day basis in terms of daily sales, consistent bank statement cash flow, and overall stability.

What documents can I show instead of a CIBIL score to get a loan?
You can show your financial documents, like bank statements for your company for 6 to 12 months, GST returns, the latest ITR, and a clear business plan highlighting revenue and growth projections. These demonstrate your capacity to repay the loan, increasing your chances of approval.

Is having no CIBIL score the same as having a low CIBIL score?
No, they are not the same. Having no CIBIL score means you don't have any credit history, which isn’t considered too negative by lenders. On the other hand, a low CIBIL score indicates missed or delayed payments, which signals a higher risk to lenders.

What is the process for getting a business loan with a low CIBIL score?
With a low CIBIL score, emphasis is on proving the present financial strength of the business. Evidence of strong cash flows, a small loan amount application, or a person applying jointly will reduce risk for the lender.

How shall I start building my good CIBIL score for a business?
Building a good CIBIL score can be achieved by establishing credit. Either take a small loan or apply for a business credit card and ensure on-time repayment. This will assist in building a positive credit history.

Is it possible to have a loan without a CIBIL score?
Yes, there are some lenders who may look at making credit assessments in alternative ways, such as via your income and employment history. At times, you may be able to get a smaller loan amount without possessing a credit score.

Is the CIBIL score assessed for an MSME loan?
Yes, the CIBIL score is assessed when applying for any type of loan. Usually, for MSME loans, it is recommended to have a CIBIL score exceeding 685. This score reflects your business creditworthiness and ability to repay the loan.

Which company instantly offers a loan without checking the CIBIL score?
Loans can be offered by some lenders without the need for a CIBIL score, namely NBFCs and MFIs. They consider other aspects besides the score, such as the cash flows of your business and its economic well-being.

What documents are compulsory for an MSME loan?
Some of the key documents required include proof of business registration, Udyam Registration Certificate, MoA, AoA, licences, rent agreements, and sales deeds. These requirements are likely to vary across lenders, so check with your lender of choice as well.

How to generate a CIBIL score?
You cannot create a CIBIL score all at once. It happens over time, with you being a responsible borrower, i.e., paying bills on time, keeping credit utilisation low, and having a balanced credit mix. Over a period of a few years, your score will increase.