The first step towards acquiring a business loan is to fill out the form of application. Regardless of the lender, the borrower must submit the loan application form and complete all the formalities that are necessary to get the loan.
The borrowers must also submit a list of necessary documents along with the application such as those that establish the ability of the borrower to repay the loan and demonstrate their creditworthiness. The loan application processing becomes seamless if your documents are ready and transparent.
Documents Required for Business Loan
The following are the documents the borrowers are required to obtain a business loan.
- Proof of identity such as the PAN card, Driving License, Voter ID card, Aadhar Card, and Passport.
- Address Proof such as Electricity Bill, Passport, Ration Card, Trade License, Sales Tax Certificate, Lease Agreement, Telephone Bill, or Ration Card.
- Proof of Income with the bank statement of the previous two years.
- Financial documents such as the ITR of the last two years the calculation of the balance sheet along the profit and loss account of the last two years.
- Proof of continuation of the business.
- Proof of business ownership includes documents such as Sole Proprietorship Declaration, and the certified true copy of Memorandum and Articles of Association.
- The audited financials of the last three years.
Documents for the Lenders
The documents for the business loans the lenders require are:
- The form of loan application is filled with a copy of the passport-size photograph.
- Proof of identity of the applicant includes the PAN card, Voter Identity card, Driving License, Passport, and MAPIN card.
- Residence proof such as the Ration Card, Lease Agreement, Electricity or Telephone bill, Passport, Sales Tax certificate, and Trade License.
- Age Proof of the applicant through the passport, Voter ID card, and PAN card.
Documents for the SME’s
The following are the documents to be furnished by the SME’s.
- Identity proof of the private limited company such as sales tax, GST return filing, IT return of the entity, electricity and water bills, registration under the Shops and Establishment Act, Municipal tax bill under the name of the business along with the Memorandum and Articles of Association.
- The loan applicants must also fulfill the norms of GST registration online for the company.
- The proof of individual identity includes the Voter Identity card, PAN card, Driving License, and Passport of the authorized signatories or the directors of the company. However, any one of the proofs will suffice for this purpose.
Documents Required by the Self-Employed Individuals
The following documents are required by the proprietors and the self-employed individuals.
- Identity proof of sole proprietorship and the proprietors.
- IT return, PAN card, Water and electricity bill, municipal tax bill, all of which are in the name of the company.
- Proof of identity of the applicant or the proprietor along with passport, driving license, Voter ID card, and PAN card.
- Address proof of the applicant along Driving license or passport or Voter Identity card.
Also Read: 5 Types of Business Loans in India
Eligibility of the Business Loan
Business loans can be availed by self-employed individuals, private limited companies, sole proprietorships, and partnership firms that are involved in the business of trading, business, or manufacturing. The minimum turnover of the business must be forty lakhs for availing the loan amount.
Things to Understand
Whether it is to manage the flow of cash, modify the business equipment or infrastructure, or grow the business, business loans can meet the needs of various companies. However, the eligibility factors, criteria, and unique requirements of the bank are going to differ. Therefore, it is necessary to obtain the necessary information about the loan documents before applying for the loan. It is good to compile all the information about the documents for business loans in advance to fulfill the requirements.
