What are the documents required to get a business loan in India?
New Delhi : Business loans have changed with in tune with the changing economic situations. Right from heavily secured credits to availing security-free business advances, the transition is solely to provide positive financial options for businesses.
A business loan can be availed for a start-up or an existing business. Such advances provide a necessary boost to help a business implement a big project without liquidating personal savings or other assets.
How are business loans availed?
Filling up a loan application form is the stepping stone towards procuring a loan. Irrespective of the lending institution, it is a crucial and mandatory step for all borrowers. From a lender's perspective, thorough document verification and assessment of risks are two essential tasks. However, there are other vital information that you must know before applying for a business loan.
Therefore, it is vital that you understand the documents required for business loan procurement. A loan application is submitted along with necessary documents that highlight your creditworthiness, thereby your ability to repay.
Documents required for business loans
Some of the standard document details for procuring business loans are –
i. KYC documents: It includes business entity proof, articles of association, incorporation certificate, shops and establishment certificate.
ii. PAN Card: It is required for every business entity, be it proprietors, partners or promoters and directors.
iii. Address proof: For any business entities as mentioned in point ii.
Furthermore, these documents require self-attestation.
Financials of your company
● ITR statements and audited financials (including P&L, balance sheet, audit reports, VAT, etc.) from the past 3 years.
● Your company’s present year performance along with project turnover.
● Debt obligations.
Current bank statements of the last 6 months from first-time borrowers. It extends to 1 year for others. If an SME or MSME have more than one bank account, then it's mandatory to show 75% of complete banking turnover.
Loan approval documentation made easier
So, you can see this complicated process of availing a business loan is often daunting for most businesses. However, several leading NBFCs like Bajaj Finserv also provide Business Loans with simpler documentation procedure and requirements. Moreover, you can get your loan approved online within a day.
For self-employed individuals
● Identity proof of sole proprietorship.
● PAN card along with income tax returns.
● Municipal tax along with water and electricity bill in the company's name.
● Address proof of sole proprietors which includes a voter identity card, driving license or passport.
● Trade license along with Establishment Registration and Sales tax Certificate.
For SMEs and MSMEs
Documents required for business loans for such enterprises include –
a. Identity proof of the private limited company.
b. Sales tax, VAT, other service taxes and excise registration.
c. Water and electricity bills.
d. Registration number under Shops and Establishment Act.
e. PAN ID and municipal tax bills.
f. Memorandum including articles of association.
g. Cash flow statements.
Apart from difficult eligibility criteria, business loans used to come with high interest rates and heavy collaterals. However, you can also avail these loans from leading NBFCs such as Bajaj Finserv. They offer collateral-free loans at favourable interest rates. All you need is to add a few personal details and get your loan approved within 24 hours.
It is easier than before to meet the documents required for a business loan. Leading financial institutions aim to create a completely positive lending environment to help businesses avail loans easily.