What are the Documents Required for a Business Loan?

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A business loan is a brilliant opportunity that enables the entrepreneur to support the growth of their business. It is an unsecured loan that can be used to fund different purposes like business expansion, purchasing equipment, buying office space, paying off rent or salaries, hiring staff, and debt consolidation, among others, or even setting up a new business. The loan is offered to the applicant after considering their financial history, repayment capability, and credit score. But, in order to avail a business loan, the borrower must ensure that they meet the eligibility criteria as well as have the required documents on them. The submission of these documents is a crucial part of applying for a loan as a lender tries to gain a clear picture of the applicant’s repayment capability through it. This article talks about the various documents that the future business loan borrower must submit while applying for a business loan. Read on to know more.

Documents Needed for a Business Loan

The first document that the applicant must possess is the PAN card of the Company/Firm/Individual. The other documents required for a business loan are:

Identify Proof

• Aadhaar Card
• Passport
• Voter’s ID Card
• PAN Card
• Driving License

Address Proof

• Aadhaar Card
• Passport
• Voter’s ID Card
• Driving License

Latest ITR (including income computation, Balance Sheet and Profit & Loss account for the previous 2 years; all documents must be certified or audited by a CA)

Proof of Continuation: ITR, trade license, sales tax certificate

Other Requested Documents: Sole Prop. Declaration/Certified Copy of Partnership Deed, Certified true copy of Memorandum & Articles of Association (certified by Director) and Original Board resolution.

Read on to know more about the documents required when applying for a business loan.

Eligibility Criteria for a Business Loan

Before applying, the borrower must make sure that they satisfy the specified business loan eligibility criteria. However, one must keep in mind that such minimum requirements vary from lender to lender. In spite of the variations, certain elements of the business loan eligibility criteria are common for all formalised lenders.

The eligibility criteria that most lenders expect applicants to fulfil are:

• The applicant must be a self-employed individual in a service, partnership, trading or a manufacturing sector firm
• The applicant must be between 25-65 years of age
• The enterprise in question must have generated consistent profits over the past two years
• The minimum turnover of the enterprise must be ₹10 lakh
• The applicant must possess Income tax returns (ITR) in his name as well as the firm going back at least one year

Conclusion

If an individual has the aforementioned documents and meets the eligibility criteria, they will be able to apply for a business loan easily. Websites such as Finserv MARKETS offer a variety of business loan options for the borrower to choose from. On top of that, such portals make it easy for entrepreneurs to apply for business loans. Apply today!