1. Definition and Overview

• GST-Based Lending: This refers to business loans where the lender evaluates the MSME’s  creditworthiness primarily using data from the company’s GST (Goods and Services Tax) returns. In  other words, the MSME’s reported sales/turnover (as filed in GST returns) becomes a key basis for  loan eligibility. Lenders often integrate directly with the GST system (via portals or APIs) to fetch recent  tax return data, using it to gauge the scale and consistency of the business. Many banks and fintech  lenders have introduced special “GST loans” or working capital facilities that rely on GST data. Generally, GST-based lending is a newer, digital-driven approach meant to streamline credit for tax compliant businesses. 

• ITR-Based Lending: This is the more traditional route where lenders assess an MSME’s income and  capacity to repay based on Income Tax Returns (ITRs) and associated financial statements. The MSME  (or its owners) must furnish their ITRs for the past few years, which show declared income/profits, along  with balance sheets and profit-loss statements. Lenders analyze these documents to determine loan  eligibility (often looking at net profit, taxable income, and financial ratios). This method has been the  standard for unsecured business loans – for instance, many banks require 2-3 years of filed ITRs,  balance sheets, and bank statements before sanctioning an MSME loan. In the case of secured  lending as well, furnishing ITR statements has been a general norm these days. ITR-based lending  focuses on the business’s profitability and taxable income history as proof of creditworthiness. 
  
  

In summary, GST-based lending leverages indirect tax data (sales/turnover) as the proxy for  business performance, whereas ITR-based lending relies on direct tax data (income/profit) and  formal financial statements. Both aim to evaluate MSMEs, but they use different financial lenses – one  centered on revenue flow, the other on net income. Below, we compare these two approaches across  key aspects. 

2. Key Differences Between GST-Based and ITR-Based Lending 

To understand how GST-based lending differs from ITR-based lending, consider the following aspects  side by side:

3. Why Lending Institutions Prefer One Over the Other

Lending institutions weigh GST-based and ITR-based underwriting in terms of risk assessment, data  transparency, and processing efficiency. In recent years, many lenders show a preference for GST based lending (or generally data-driven lending) for MSMEs, due to several advantages: 

• Richer, Real-Time Data for Risk Assessment: GST returns provide a granular and timely  view of a business’s operations. Sales data is reported monthly or quarterly, giving lenders up to-date insights into revenues, seasonality, and growth trends. This frequent reporting reduces  the risk of lending based on outdated information. In contrast, ITRs are filed annually and may  be months out of date by the time a loan is assessed. Lenders see GST data as more predictive of future performance, helping them estimate default risk better. Indeed, using GST data yields  a “more realistic view of business operations and hence a better estimate of the business’s  credit-worthiness,” making lending safer if used correctly  

• Higher Transparency and Authenticity of Financial Data: One challenge in traditional MSME  lending has been the reliability of borrower-provided data. Balance sheets and ITR figures from  small businesses might be understated or unaudited, raising doubts about authenticity. GST  filings, however, are filed with the tax authority and often reconcilable (e.g., sales are matched  with buyers’ purchase records), so they’re harder to falsify. This third-party verified data boosts  lender confidence. As a result, banks trust GST records as a transparent window into the  business’s true turnover. An industry report noted that mandatory GST reporting has facilitated  a transparent exchange of sales data among buyers, sellers, tax departments, and banks,  enabling easy verification of an applicant’s figures. Greater transparency means lower  probability of hidden risks, which is why lenders value GST data.

• Ease of Verification and Automation: Because GST data is digitized and accessible via  secure portals, lenders can automate much of the credit assessment. Fetching GST returns can  be as simple as an API call or an OTP-based login to the GST system, after which software can  analyze turnover, tax payments, filing consistency, etc. Banks have confirmed that the  digitalization of GST enables them to leverage AI for seamless data comparison, anomaly  detection, and quick loan processing This ease of verification stands in contrast to manually  poring over ITR PDFs, ledgers, and physical documents. The result is faster processing and  lower operating costs for the lender. Lower cost is crucial because MSME loans are often smaller  ticket – using automated data (GST, bank statements) makes serving this segment more cost effective. In short, GST-based lending aligns well with digital workflows, allowing institutions to  scale up MSME lending without a proportional increase in manpower.

• Risk Management and Default Probability: Lenders ultimately care about getting repaid. A  key factor is the ability to assess and monitor the borrower’s financial health. GST-based lending  gives ongoing visibility into the business’s sales even after loan disbursement (since MSMEs  will continue filing GST returns). This ongoing data can act as an early warning system – a  sudden drop in sales visible in GST returns might prompt the lender to investigate or adjust credit  limits proactively. Such monitoring is harder with ITR-based loans, where new data comes only  yearly. Additionally, GST compliance itself is sometimes seen as a proxy for disciplined business  behavior. An MSME regularly filing taxes may be less likely to default intentionally. For these  reasons, many institutions see GST-linked underwriting as reducing default probability due to  better-informed lending decisions. In fact, some banks now skip traditional assessments entirely  for GST-registered borrowers – e.g. ICICI’s GST loan requires no additional balance sheet  evaluation, confident that turnover data suffices . This indicates a strong trust in GST-based risk  assessment.

• When ITR-Based is Preferred: There are scenarios where lenders still lean on ITR-based  methods. If an MSME has strong profits and sound financials, showing ability to comfortably  service debt, a lender (especially a traditional bank) may prefer the assurance of those ITR verified income levels. Also, if an MSME is not GST-registered (e.g., a very small enterprise  below the GST turnover threshold or a specific service exempt from GST), then ITR and bank  statements are the only way to judge creditworthiness – lenders have no choice but to use them.  Furthermore, for long-term loans or larger investments, lenders might examine profitability (from  ITR) to ensure the business model is fundamentally viable, not just high-turnover. In summary,  while modern lending is gravitating to digital data like GST, ITR-based lending remains relevant  for businesses with good profits, for verifying debt service capacity (since GST shows revenue  but not expenses), and for cases where GST data is unavailable.

Overall, the trend is that financial institutions increasingly favor GST-based (or data-driven)  lending because it streamlines processing and often broadens the pool of eligible borrowers without  substantially increasing risk. As one analysis put it, GST data-based lending is not only more efficient  but also a safer way of lending to MSMEs. It brings previously “hidden” firms into the formal fold,  allowing banks to lend where they earlier found it difficult to assess. That said, a prudent lender uses a  mix of both – leveraging GST for speed and coverage, and ITR/financials for additional insight when  needed – to balance risk and reach.


4. Implications for MSMEs 

The shift from traditional ITR-based lending to GST-based lending (and other alternative data methods)  carries significant implications for MSME borrowers: 

• Ease of Access to Funds: For many MSMEs, especially those who lacked collateral or had  minimal reported income, GST-based lending has made it easier to obtain formal credit. By using  turnover as a metric, lenders can extend working capital to businesses that would have been  denied loans under old criteria. For example, a small trader might have modest profits on  paper but healthy sales – under GST-linked programs, that trader can get an unsecured loan  quickly by sharing GST returns, whereas earlier, not having high profits in ITR would block  access. This means more MSMEs can tap instant funding for operations. Industry trends  show a correlation between GST implementation and credit growth: credit to MSMEs has surged  ~20% year-on-year, indicating improved credit availability . The formalization via GST is a key  driver – as more businesses register and file GST, they unlock financing opportunities (banks  even offer special GST-linked schemes). On the flip side, MSMEs that remain outside the GST  system might find it relatively harder now to get loans, since they cannot leverage this fast-track.  Overall, GST-based lending has lowered barriers and timelines for MSMEs to secure funds,  which can be crucial for meeting working capital gaps or taking up new orders at short notice. 

• Suitability for Different Types of Businesses: The two approaches suit different business  profiles in the MSME spectrum.
  a) Startups and young businesses benefit from GST-based lending because they often do not  have years of ITRs to show. If a startup began operations a year ago, it might have some GST  returns already, but its first income tax return may not even be filed or may show losses (as  early-stage firms often reinvest heavily). In such cases, a lender using GST data (plus bank  transactions) can still fund the startup’s growth, whereas traditional banks would ask for 2-3  years of financials – an impossible requirement for a new firm.
  b) Seasonal and cyclical businesses also find GST-based credit attractive. Their GST filings will  reflect seasonality (e.g. a toy manufacturer might show spikes in Q3 due to festival sales).  Lenders can adjust credit limits based on these patterns, or offer flexible overdrafts peaking in  high season. The business, in turn, can access a line of credit when needed by demonstrating  rising GST sales, without waiting for annual accounts. In contrast, an ITR-based assessment  might average out the season and not account for the timing of cash needs, making it less suited  for highly seasonal trade.
  c) Cash-heavy businesses (such as small retailers or traders that historically dealt mostly in cash)  have a clear incentive to formalize transactions due to these lending shifts. If they start routing  sales through GST (and banking channels), they suddenly become visible and eligible for  funding. Many lenders focus on transaction history and GST returns for credit appraisal now,  even waiving formal financials for loans ≤ ₹50 lakh. This means even a previously informal shop,  once it starts filing GST, can potentially get a digital loan based on its monthly sales. However, if a business continues largely off-books (no GST, minimal ITR), it will struggle to get affordable  loans – it might be forced to rely on informal credit or expensive NBFC loans that look at other  surrogates. In summary, MSMEs that embrace formal turnover reporting (GST) position  themselves to tap faster and larger financing, while those that cannot (or do not) may find  themselves limited to smaller, slower funding routes.

1. Impact on Financial Planning and Creditworthiness: Knowing how lenders evaluate them,  MSMEs are adapting their financial planning. One big change is the mindset around tax  compliance – MSMEs realize that paying taxes can unlock credit. For instance, a business  might choose to report all sales in its GST returns (even if that means higher tax outgo) because  it builds a verifiable track record that banks will lend against. This incentivizes businesses to stay  compliant. Similarly, MSMEs are understanding the importance of filing accurate ITRs and  maintaining clean financial statements, since many lenders still ask for them. An MSME planning  to seek a large expansion loan in the future might deliberately avoid excessive tax avoidance in  the present, so that its ITRs show healthy profits to support a loan application. Essentially,  access to credit is now tied to demonstrating creditworthiness through data – be it GST or  ITR. This has prompted MSMEs to improve bookkeeping, adopt software (some use GST  accounting apps that also prepare them for loans), and generally become more financially  disciplined. Over time, such behavior boosts their formal credit history. If an MSME takes a GST based loan and repays it on time, that repayment gets recorded in credit bureaus, improving its  credit score and making future borrowing easier. In contrast, MSMEs that avoid formal financial  reporting might save on taxes in the short term but miss out on growth opportunities due to  lack of credit. Thus, the emergence of GST-based lending has nudged many entrepreneurs  toward better financial planning, balancing tax optimization with the need to show sufficient  income/turnover for credit. It’s shaping a more creditworthy MSME sector by rewarding  transparency and regular compliance.
   
   
   5. Pros and Cons of Each Approach
   
   Both GST-based and ITR-based lending come with their own advantages and disadvantages for MSME  borrowers and for lenders. Here’s a breakdown:
   
   GST-Based Lending – Pros: 
   a) Fast and Convenient: Turnaround is quick with minimal paperwork. MSMEs can often apply  online with their GST details and get approval in hours or days, which is ideal for urgent working  capital needs.  
   b) No Collateral Required: These loans are typically unsecured. Lenders use the strength of GST  returns as a substitute for collateral, allowing MSMEs to borrow without pledging property.
   c) Leverages True Business Turnover: High-revenue businesses that have thin profit margins  benefit, as eligibility is tied to sales volume rather than net income. This can mean larger loan  limits for growing businesses. For example, leveraging GST returns allowed some MSMEs to  get 20–30% of their annual turnover as loan, which might not have been possible if only profits  were considered. 
   d) Objective and Transparent: Decisions are data-driven. As long as the GST filings are genuine,  there is less subjective scrutiny. This reduces bias and speeds up trust-building with new  borrowers. It’s especially helpful for MSMEs with limited credit history – consistent tax data  serves as an alternative track record.
   e) Encourages Formal Compliance: As a side effect, it incentivizes businesses to register under  GST and file returns. Compliant businesses may get interest rate discounts and priority  processing, which is a win-win (MSMEs get cheaper credit, lenders get safer borrowers). Over  time this expands the formal lending market.
   
   GST-Based Lending – Cons:
   a) Ignores Profitability: One drawback is that GST data shows revenue, not profit. A business  could have high turnover but very low margins or even be loss-making. If a lender gives a large  loan just based on sales, the borrower might struggle to repay due to thin profit. There’s a risk  of over-leveraging businesses that have volume but poor cash flow management. Lenders try to  mitigate this by analyzing GST data in context (e.g., looking at tax payments to infer value  addition, checking bank statements, etc., but the risk remains if evaluation is superficial).
   b) Requires GST Registration: By design, only MSMEs registered for GST can avail these loans.  Very small enterprises under the turnover threshold (e.g. under ₹40 lakh annual for goods or  ₹20 lakh for services in India) who may not be mandated to register for GST could be left out.  They would either have to voluntarily register or stick to traditional lending based on whatever  income proof they have. This means the smallest micro enterprises or informal businesses don’t  directly benefit unless they formalize.
   c) Compliance Burden: Some MSMEs find regular GST compliance complex or costly (filing every  month, reconciling invoices, etc.). While the loan process itself is easy, maintaining the  underlying GST records requires discipline. Delayed or missed GST filings can jeopardize loan  approval or even trigger covenants for existing loans (a lender might stipulate that the borrower  must remain GST-compliant during the loan term). In short, borrowers need to keep up the  compliance to continue enjoying benefits – which can be a con for those not prepared for it.
   d) Limited to Working Capital: Most GST-based lending schemes are structured as working  capital loans or short-term (12–36 month) facilities. They may not be suitable for long-term  capital expenditure financing. For example, if an MSME wants a 5-year term loan to purchase  machinery, a pure GST-return-based unsecured loan might not suffice or may come at a high  cost. Traditional lending (possibly with collateral) could be needed for such long tenures.
   e) Data Privacy Concerns: Sharing GST data access with lenders is generally safe and consent based, but a few business owners may feel uneasy about third parties pulling their tax data. Any  technical glitches or breaches in the data exchange process could expose sensitive information.  While such issues are rare and systems are secure, the reliance on digital data means MSMEs  must be comfortable with digital processes.
   
   
   ITR-Based Lending – Pros:
   

a) Focus on Net Profit & Capacity: By examining profits and taxable income, ITR-based lending  ensures the business has demonstrated repayment capacity. If an MSME qualifies based on  ITR, it usually means they have enough earnings to cover loan EMIs, making these loans  reasonably aligned with the borrower’s capacity. This can lead to more sustainable debt levels. 

b) Wider Applicability: Any business that files income tax returns can be evaluated, including  those not registered under GST. This approach covers professionals and service providers who might be outside GST, and very small businesses that only have ITRs as formal proof. It’s  the default method for a broad set of MSMEs, so it doesn’t exclude on the basis of tax regime  (aside from requiring that some income is reported in ITR). 

c) Larger/Longer Loans Possible: When backed by strong financial statements, ITR-based  assessments can support larger loan amounts or longer tenures, especially if the lender adds  collateral into the mix. For example, a manufacturing SME with healthy profits might get a 5-year  term loan or a higher credit limit by showing their debt service coverage ratio (DSCR) is good.  Traditional banks are comfortable structuring longer-term loans after detailed analysis,  something fintech-style GST loans (often short tenor) might not offer. 

d) Comprehensive Financial Picture: ITRs come with balance sheets and P&L statements, which  give a holistic view of the business (assets, liabilities, profitability, equity, etc.). Lenders can  perform in-depth risk analysis (like leverage ratios, current ratios) that GST turnover alone  wouldn’t reveal. This means credit decisions can be more nuanced. For well-managed  companies, this full-picture approach can highlight strengths (e.g., strong net worth, consistent  profitability) that merit better loan terms. 

e) Establishes Credit History in Traditional System: Successfully servicing a loan taken via the  ITR route builds the MSME’s credit record in the eyes of traditional banks and institutions. Over  time, the business can graduate to higher credit amounts or different products (like trade credit,  cash credit lines) as it has proven financials and a track record. This could be advantageous for  future fundraising or even attracting investors, as it indicates the business runs with proper  financial discipline.

ITR-Based Lending – Cons: 

a) Stringent Documentation & Processing Time: The heavy paperwork requirement is a major  downside. Preparing and providing all financial documents is tedious for MSMEs, many of whom  lack in-house accounting teams. The verification and credit analysis process is equally time consuming on the lender’s side, meaning the borrower waits longer for approval and  disbursement. The sheer friction here can make ITR-based loans impractical for immediate  needs or for those MSMEs not already well-prepared with documents. 

b) Excludes Many Small Businesses: A large number of micro and small enterprises either do  not file regular ITRs or show very minimal income (to avoid tax). Such businesses find it difficult  to qualify for loans in the traditional system. Essentially, the door is closed if you cannot present  formal income proofs. This created the infamous “MSME credit gap” in many countries creditworthy in substance but not on paper. While alternative data lending is addressing this now,  relying solely on ITR perpetuates that gap. 

c) Potential for Underestimation: Even for those who do qualify, ITR-based assessments might  underestimate an MSME’s true repayment ability if the business has been conservative in  reporting income. For instance, entrepreneurs often reinvest or claim expenses to minimize  taxable profit. An ITR might show only a small profit on which a bank bases a low loan amount,  whereas the business’s cash flow could have handled a larger loan. In other words, by focusing  on past net income, lenders might miss growth trajectory or other positives – it’s a backward 

looking approach. 

d) Higher Interest for “No-ITR” Alternatives: If a business has to resort to a loan without ITR  (for example, through an NBFC or fintech that accepts only bank statements because the  borrower can’t produce tax returns), they usually pay a premium. So, if an MSME cannot meet  the ITR criteria for a low-rate bank loan, the alternative is often a more expensive credit. In  essence, the traditional system doesn’t accommodate them, and the workaround is costly. 

e) Less Adaptive to Real-Time Changes: ITR-based lending is typically a one-time assessment  at loan origination. It doesn’t easily allow for dynamically increasing a limit or quickly topping up  a loan if the business suddenly grows, since the lender will wait for the next financials to be filed.  For MSMEs in rapidly changing markets, this lack of flexibility can be a disadvantage compared  to the more continuous assessment in GST/transaction-based models.


6. Which Works Best for Different MSMEs?

There is no one-size-fits-all – the optimal lending approach depends on the MSME’s characteristics,  stage, and needs. Based on industry experience and trends, we can draw some guidance on which  approach tends to work best for whom: 

• New and Growing MSMEs (Limited financial history): Young businesses or startups often  find GST-based lending works best (if they are registered under GST). Even with just 6–12  months of sales data, they may secure a small loan or credit line, which can be lifesaving for  growth. For example, a newly established online retailer with surging monthly sales can use  those GST returns to get a working capital loan to stock more inventory, despite not having two  years of ITRs yet. ITR-based loans, in contrast, usually aren’t an option until the business has a  couple of profitable years under its belt. So for the first few years of an MSME, the GST/alternate data route (including bank statement analysis, etc.) is the more viable financing path. As the  business matures and starts showing profits on paper, it can then additionally leverage ITR based loans for larger needs. 

• High-Turnover, Low-Margin Businesses: Businesses that trade in volume – for instance,  wholesale distributors, large traders of commodities, or manufacturers with high raw material  costs – typically benefit from GST-based lending. Their need is often for working capital to  buy inventory and manage cash flow gaps, and those needs scale with turnover. A GST-linked  lender can offer credit proportional to their sales (say a percentage of monthly turnover), which  aligns with their operational scale. These MSMEs might not show big net profits relative to  revenue (due to thin margins), so a pure ITR-based assessment would yield only small loan eligibility. By using the turnover metric, GST-based loans might provide a significantly higher  credit line. Many such businesses operate on short cycles (buy materials on credit, produce/sell,  repay), so the short tenures of GST loans are not an issue – they prefer a revolving facility.  Example: A trading firm with ₹5 crore annual sales and only ₹10 lakh profit might barely qualify  for a ₹8–10 lakh loan via ITR analysis, whereas a GST-turnover-based scheme might  comfortably offer ₹40–50 lakh in working capital limit (e.g. through an overdraft or invoice  financing), which the firm needs to keep goods flowing. Thus, for high-volume traders, GST based lending is often a better fit to their scale and quick turnover needs.

• Profitable, Steady-Growth Businesses: An MSME with steady or moderate growth but  consistently good profit margins (say a specialized manufacturer or a service provider like an  engineering firm) might find ITR-based lending sufficient and even advantageous. These  businesses might not need extremely fast credit-on-tap; instead they value larger loan tickets  for expansion or capital investment, possibly at lower interest. If their financials show, for  example, ₹50 lakh annual profit on ₹2 crore turnover, a bank could extend a sizeable term loan  or cash credit facility knowing that the earnings can support repayments. They may also get  better pricing due to good credit scores and complete documentation. For such a company,  providing paperwork isn’t a hurdle (they likely have a finance person handling accounts), and  they might be looking for loans to buy new machinery, open a new branch, etc., where a 4-5  year term and lower interest from a traditional bank loan is ideal. In this scenario, ITR-based  lending (potentially coupled with collateral for even better terms) works best. They can of course  also use GST-based lines for short-term needs, but the bulk of their requirements might be met  via conventional loans since they “qualify” well. In short, established MSMEs with healthy  profits and organized financials can stick to ITR-based loans which reward their stability. 

• Seasonal or Cyclical Businesses: As noted, businesses with pronounced seasonal cycles  (say, an agricultural products processor, or a holiday-centric goods manufacturer) often need  flexible credit that can ramp up at peak season and wind down after. GST-based facilities (like invoice financing or a GST-linked overdraft) tend to serve this purpose effectively. Because  the sales in the peak months reflect immediately in GST returns, the business can negotiate a  higher limit or drawdown during that period. Some new platforms (e.g., GST Sahay, an invoice  financing platform launched in 2023) are specifically designed to lend against GST invoices  instantly, which is great for seasonal spikes. An annual ITR will of course show the overall  revenue and profit, but it won’t help a lender understand the intra-year peaks and troughs as  well. A seasonal MSME might still use ITR-based term loans for long-term needs (like facility  expansion), but for the seasonal working capital, a GST-based approach works best to provide  timely, just-in-time credit. It also prevents them from having to borrow excess funds for the  whole year – they can borrow in short bursts as sales occur, which is cost-efficient. 

• MSMEs Lacking Formal Records (Previously informal businesses): A micro-enterprise that  has operated largely in cash or hasn’t maintained books faces a catch-22 in traditional lending.  For these businesses, adopting digital record-keeping and GST registration opens the door  to finance. If they take the step to register under GST, even at a small scale, they can start  building a financial footprint. Fintech lenders and certain banks may offer small-ticket loans  based on bank account statements, GST data, and even smartphone transaction data for  such borrowers. This is effectively GST-based (and surrogate data-based) lending filling the gap that ITR-based lending never served. For example, a small family-run shop that never took a  loan might now get a ₹2 lakh loan from a digital lender because the past 6 months of GST reports  show stable sales and their bank statements corroborate daily deposits. In contrast, without GST  or ITR, they previously had no chance at a formal loan. Therefore, for formerly credit-invisible  MSMEs, the GST route (often combined with other alternative data) works best as a stepping  stone into formal credit. Over time, if they grow and start filing ITRs with significant income, they  can access a wider range of financial products – but initially, GST-based small loans might be  the only viable channel. 

• Combination Approach – The Ideal: In practice, many MSMEs will utilize both approaches  in tandem to meet different needs. For instance, an MSME could take a long-term loan based  on ITR (to fund a big project or asset purchase) and simultaneously use a GST-linked line of  credit for managing operational liquidity. The “which works best” question might then depend on  the use-case: GST-based for speed and working capital, ITR-based for size and longer-term  funding. Industry trends show lenders themselves moving towards a combined data approach.  The State Bank of India’s latest digital lending platform uses GST returns, Income Tax returns,  and bank transaction data together to assess eligibility essentially blending the two methods  to maximize accuracy and convenience. This hints that the future for MSMEs will not be one or  the other, but a fusion where having both good GST compliance and sound ITRs is ideal.  An MSME that maintains high transparency on all fronts will find it can access the fastest loans  when needed, the cheapest loans when those are optimal, and generally command the best of  both worlds.
  

In conclusion, GST-based lending vs. ITR-based lending is not a zero-sum choice; it’s about what  suits the MSME’s current situation and needs. GST-based lending has been a game-changer for  unlocking credit for many small businesses by leveraging their sales data, while ITR-based lending  remains crucial for financing based on profitability and long-term viability. A young, growing, or cash 

strapped MSME might lean on GST-driven loans to seize opportunities now, whereas a stable and  profitable MSME might use its strong financial statements to get larger loans at fine rates – and many  will use a mix as they evolve. The key insight for MSMEs is that maintaining proper GST filings and  ITR filings both greatly enhance funding options. By doing so, they ensure that whichever route a  particular funder or situation calls for, their business will look credible and eligible, thereby improving  their overall financial health and growth prospects.