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Information enables, knowledge empowers, wisdom elevates. In this age of smart phones and digital enablement for all, new forms of credit are constantly coming to our door steps; being aware can transform the way we think about funding our businesses. We are passionate about issues that surround small businesses and this space is devoted towards spreading awareness about various tools that can benefit entrepreneurs. Keep reading..

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May, 2016

What are the typical documents required to avail a business loan?

By: | Tags: , , , , , , | Comments: 55

Dear Entrepreneur,

Off late this is the most common question we have been asked, what all documents are required while attempting to avail a business loan or a working capital loan?

While providing a loan to you a bank needs to perform its Know Your Customer (“KYC”) check. What it means is financial institution needs to look at the identity and address proofs to confirm the genuineness of their customers and perform credit assessment to grant you a loan. As financial institutions are regulated entities, they need to perform KYC on all of their clients as per regulations by Reserve Bank of India (“RBI”). Below is a simple guide to solve your documentation questions:

1. Identity Proof

  • PAN Card
  • Voters Identity Card

2. Address Proof  

  • Bank Statements
  • Electricity Bill
  • Telephone Bill

Or any one of the below: (these are considered as both Identity and Address proofs)


3. Business Continuity Proof – any of the below

  • Income tax returns – Its good to have computation of income and Profit & Loss, Balance Sheet copies also.
  • Trade License
  • Shop Registration Certificate (also known as Gumatsa License in Maharashtra)
  • SSI Certificate/ Udyog Aadhaar (You can register your business online here)
  • VAT /Sales tax /Service tax certificate/PAN card

4. Bank Statements – Usually current account and savings account bank statements of last 6 months depending upon availability.


5. Other documents – Irrespective of the submitted identity proof, PAN card of the entrepreneur and if available of the business is required.


Registered partnership deed(for LLPs/Partnerships), memorandum and articles of associations(for private ltd companies) would be required depending upon the constitution of the business.


Working capital loan – While wanting to avail a cash credit limit or over draft, a summary of your debtors and creditors (for a working capital loan) and stock statement is good to have.


Mortgage loan / Loan against property – Requires property documents like registered sale deed, occupancy certificate.


Business plan or Project report – This is the most ignored part of the loan process. If you were trying to apply for Mudra loan or credit guarantee fund trust for micro and small enterprises (“CGTMSE”), or any other subsidy/scheme bank would definitely ask you for one. For other kind of loansfinancial institution may or may not ask you for this, but for the sake of building a profitable business, you must make one.So what is a business plan? We will discuss this part in our subsequent post…

Comments

55 thoughts on “What are the typical documents required to avail a business loan?

  1. krushna zute

    Hallo Sir I am Krushna Zute I have a small business of Industrial All type Machinery Supplier. I want to grow my business so I need a loan 1000000
    Registered by MSME
    My contact no 9673336565

    Reply

  2. govind

    sir, we need loan to set up our business and grow our business, we are providing telecom services line installation and commissioning of telecom products we have got multiple projects but to fulfill them we need capital so please provide me capital for that.
    9769777642

    Reply

  3. Soumen sil

    Sir I am soumen sil I have a small business of chemical Product. I want to grow my business so I need a loan 200000 phone number 9007531356

    Reply

  4. rehan khan

    Hello sir,
    Sir main mumbai me meri mobile repairing ki shop hai mujhe shop ke liye paise chahiye urgent mere paas rent ki shop hai aur min rahn wala lucknow ka hu

    Reply

  5. Mukesh kumar uikey

    Hello sir
    mujhe lone chahiye me khane me upyog hone wale sabhi masale ki pisai krke marketing kr all mp me saply krne ka plan h sir help me
    contect no.9827960820

    Reply

  6. Shobha Singh

    मेरा छोटा सा बिजनेस है हम गारहको का गेहूं पीसते है और सरसों भी पेरते है हमारी इतनी आमदनी नहीं है कि पैसे बैंक में जमा करें हम आटा और सरसों तेल का बारनड बनाना चाहते है हमें लोन कहां से और कैसे मिलेगा बताएं

    Reply

  7. Vikrant Singh thakur

    Hello
    I am freelance filmmaker and I work from home, recently I have registered my company through udyog aadhar on my home address.
    It’s a starting so I have invested 4 lakh on my film equipments.i need a small amount of lone around 2lakh, please let me know the procedure .

    Reply

  8. Mithila Rout

    I am a intreprenuer of nehatailoriginstitute registered by udyog adhaar msme government of India so how to get Lone for government, kindly suggest me.

    Reply

  9. Sridhar

    Sir I want to know some information by call if possible u can make a call 9676744201 ,I head tried ur no it is not connecting calls sir

    Reply

  10. Pingback: 10 FAQs on Mudra scheme - Funding the unfunded | UdyogCredit | Blog

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