Running a business comes with big dreams — and even bigger needs. Whether you’re stocking up for a festival rush, upgrading equipment, or simply managing everyday cash flow, access to timely credit can make all the difference. Business loans have become essential tools for MSMEs looking to grow and thrive. But when you apply for one, there’s a catch: lenders usually look at your credit history and score to decide if you’re eligible.
But what if you’ve never taken a loan or don’t have a credit card? This likely means you have no credit history.
What is Credit History?
Credit history is the record of loans taken and repaid by a person or business. It reflects your borrowing and repayment behavior over time. This includes the type of credit you took, your repayment track record, and whether payments were made on time.
This data is collected from credit bureaus and compiled into a credit report, which lenders use to assess how you’ve managed credit in the past and then evaluate the risk of lending to you.
What if a business owner has no Credit History?
Fortunately, you can still apply for a business loan even without a credit history. While having a credit score can strengthen your application, its absence does not automatically disqualify you.
Thanks to advancements in digital lending and the use of alternate data sources, many modern lenders — especially NBFCs and fintech platforms — assess creditworthiness using other factors such as cash flow, business potential, and digital transaction patterns.
What does it mean to have no Credit History?
If you’ve never taken a formal loan or used credit cards, and your daily transactions happen primarily in cash, your business is considered “new-to-credit.” This simply means lenders don’t have enough historical data to evaluate your repayment behavior.
Although this presents an initial challenge, there are practical strategies to overcome it — and get your business loan approved.
Strategies to get a business loan with no Credit History
- Leverage Government Schemes
Explore schemes like Mudra Yojana, specially designed for micro and small entities. These schemes often cater to first-time borrowers and may not require an existing credit history. - Approach NBFCs & Fintech Lenders
Non-Banking Financial Companies (NBFCs) and digital lenders often offer loans based on business cash flow, revenue potential, or alternative data like customer reviews, sales reports, or UPI transaction history. - Use Collateral or Assets
Pledging collateral like property, inventory, or business assets can improve your chances of getting approved, and may even lead to lower interest rates or higher credit limits. - Bring in a Co-Signer
A co-signer with a strong credit history can significantly strengthen your loan application, offering extra assurance to lenders and reducing the perceived risk. - Build Trust Through Business Fundamentals
Present a strong business plan, highlight market experience, and showcase consistent revenue or future projections to win lender confidence. - Start Small: Credit Card or FD-Backed Loan
Open a business credit card or take a small secured loan backed by an FD to start building credit gradually. - Consult a Financial Advisor
A financial advisor can help you put together a compelling loan application, ensure complete documentation, and guide you toward the best financing route for your business type.
How to build creditworthiness as a new MSME
Even if you’re starting with zero credit history, these steps will help:
- Open and actively use a business bank account
- Pay utility and vendor bills digitally
- Maintain financial records like GST filings and P&L statements
- Apply for a secured business credit card when eligible
- Make timely and full payments on your credit card
Why is Credit History important for MSME business loans?
Having a credit history helps lenders evaluate your repayment behavior, financial responsibility, and risk profile. A longer, healthier history leads to easier loan approvals, better interest rates, and higher credit limits.
That said, credit history isn’t built overnight. With discipline, planning, and responsible usage of financial tools, you can create a solid profile that supports long-term business growth.
Conclusion: New-to-credit? MyShubhLife has you covered
At MyShubhLife, we understand that many MSMEs are first-time borrowers, running cash-based businesses or transitioning into the formal financial system. That’s why we offer tech-driven business loans that are fast, flexible, and don’t rely solely on credit history.
Whether you’re an MSME taking your first step into formal finance or seeking to grow without traditional roadblocks, MyShubhLife’s embedded credit solutions and digital-first process are built to empower your ambition.
No credit history? No problem.
Secure the business loan your growth deserves — with confidence and ease.