Business Loan Application Documents

 

It goes without saying that businesses need financial investment during the start-up stage and while undergoing any kind of expansion. Taking out business loans for such needs is commonplace in the business world. Keeping in mind that majority of business loans don’t require any collateral, the lenders take every measure possible to ensure the creditworthiness of the borrowers. The idea is to ensure the safety of their investment. These lenders accomplish this by requesting for and verifying various types of documents from the applicants. Such documents enable them to carry out efficient risk assessment and come to a sound decision about the sanctioning or rejection of the business loan.

If we look at it from the borrower’s point of view, making all the documents ready and available for review, well ahead of time is the best way to expedite the business loan disbursal. Apart from that, you must learn everything about the documents expected from you, to ensure that they’re arranged and supplied without any delays. Having readily available documents also inspires trust and confidence in the lender. Please keep in mind that the business loan documentation requirements might vary from one lender to the other. While there are several documents which are common to different types of applicants, some documents are requested specifically from specific type of applicants. Below provided are the details regarding the same:

Please note, the documentation requirements for business loans in India may vary from lender to lender. However, there are some standard set of documents that are requested by all lending establishments. Let’s go through them below:

Filled-up business loan application form:

Please ensure that you fill up the business loan application form exactly as requested by the NBFC or banking establishment. You should also affix your passport size photograph on it.

Valid identity proof of the applicant:

You can use any of the following as the applicant’s identity proof: photo PAN card, MAPIN card, passport, driving license and voter’s ID card. Please ensure that the picture on the ID proof is clearly visible and can be identified with you. Furthermore, if any of these has your updated residential address, you could use it as the residence proof as well.

Residence proof:

You’re allowed to use any of the following as a valid proof of residence: Telephone bill, sales tax certificate, lease agreement, ration card, trade license, passport or electricity bill. Please note, you’re free to use any of these as a valid identity proof only if it contains your clearly identifiable picture. Furthermore, if you’re going to use a telephone bill as residence proof, it should be of up to the last 3 months. In addition, in case of a lease agreement, a notarized agreement is not the same as a registered agreement.

Age proof:

For age proof, you’re allowed to use any of the following documents: Voter’s ID card, photo PAN card or passport.

Financial documents:

Last 6 months’ bank statement, copy of IT returns of the last 2 years, last 2 years’ CA-audited balance sheet and P & L statement are the required financial documents from the self-employed professionals.

Sole proprietorship’s identity proof:

You can use any of the following as the ID proof of the sole proprietorship: electricity / water / municipal tax bill in the concern’s name or IT return / PAN card of the business.

Filled-up business loan application form:

Please ensure that you fill up the business loan application form exactly as requested by the NBFC or banking establishment. You should also affix your passport size photograph on it.

Financial documents:

Last 6 months’ bank statement, copy of IT returns of the last 3 years, last 3 years’ sales tax returns, last 2 years’ CA-audited balance sheet and P & L statement are the required financial documents from the self-employed nonprofessionals.

Valid identity proof of the applicant:

You can use any of the following as the applicant’s identity proof: photo PAN card, MAPIN card, passport, driving license and voter’s ID card. Please ensure that the picture on the ID proof is clearly visible and can be identified with you. Furthermore, if any of these has your updated residential address, you could use it as the residence proof as well.

Residence proof:

You’re allowed to use any of the following as a valid proof of residence: Telephone bill, GST certificate, lease agreement, ration card, trade license, passport or electricity bill. Please note, you’re free to use any of these as a valid identity proof only if it contains your clearly identifiable picture. Furthermore, if you’re going to use a telephone bill as residence proof, it should be of up to the last 3 months. In addition, in case of a lease agreement, a notarized agreement is not the same as a registered agreement.

Age proof:

For age proof, you’re allowed to use any of the following documents: Voter’s ID card, photo PAN card or passport.

Sole proprietorship’s identity proof:

You can use any of the following as the ID proof of the sole proprietorship: electricity / water / municipal tax bill in the concern’s name or IT return / PAN card of the business.

Other documents:

Copy of last 3 months’ creditors statement, age wise book-debt and periodic stock.

Filled-up business loan application form:

Please ensure that the business loan application form is filled up exactly as requested by the NBFC or banking establishment. You should also affix the applicant’s passport size photograph on it.

Valid identity proof of the applicant:

You can use any of the following as the identity proof of two directors and authorized signatories: photo PAN card, passport, driving license and voter’s ID card. Please ensure that the picture on the ID proof is clearly visible and can be identified with the person.

Residence proof:

You’re allowed to use any of the following as a valid proof of residence: Telephone bill, GST certificate, lease agreement, ration card, trade license, passport or electricity bill. Please note, if you’re going to use a telephone bill as residence proof, it should be of up to the last 3 months. In addition, in case of a lease agreement, a notarized agreement is not the same as a registered agreement.

Age proof:

For age proof, you’re allowed to use any of the following documents: Voter’s ID card, photo PAN card or passport.

Financial documents:

Last 6 months’ bank statement, copy of IT returns of the last 3 years, last 3 years’ CA-audited balance sheet and P & L statement are the required financial documents from the Private Ltd. Companies and partnership firms.

Private Ltd. Company’s or Partnership Firm’s identity proof:

You can use any of the following as the ID proof: Electricity bill / water bill / municipal tax bill / GST registration / Excise registration / IT return / PAN ID / registration under Shops and Establishment Act and/or Memorandum and Articles of Association.