Individuals in India without a CIBIL credit score can obtain their first loans through alternative lenders, co-signers, and collateral [1].
Access to credit is critical for financial mobility, yet traditional lenders rely heavily on credit data to assess risk. For those without a history, finding a path to approval is the only way to establish the very score they lack.
Traditional banks typically require a FICO score in the mid-to-high 600s to approve a business loan [2]. Because these benchmarks are high, many first-time borrowers are pushed toward online lenders, who may approve borrowers with scores in the low 600s [2].
For those with scores in the 500s, financing remains possible but usually requires a co-signer, collateral, or specific alternative loan products [2]. These options act as a safety net for the lender, shifting the risk away from the borrower's missing or low credit history.
Borrowers can explore several routes to secure funding. These include equipment loans, merchant cash advances, and various loan-app platforms [1, 3]. Using a co-signer—someone with a strong credit history who agrees to pay if the borrower defaults—is another common strategy to bridge the gap [1].
Collateralized loans allow borrowers to pledge assets as security. This reduces the lender's risk and makes the CIBIL score less central to the decision. For business owners, merchant cash advances provide liquidity based on future sales rather than a static credit report [2].
As of June 2026, various no-credit-check business loans are available to help entrepreneurs scale without traditional credit markers [2]. These products emphasize current cash flow and business viability over historical borrowing patterns.
“Traditional banks typically require a FICO score in the mid-to-high 600s to approve a business loan”
The reliance on alternative lending pathways indicates a gap in India's traditional banking infrastructure, where a lack of data creates a barrier to entry. By utilizing non-traditional metrics and collateral, the market is shifting toward a more inclusive credit ecosystem that allows new borrowers to build a financial footprint.
