Know The Documents Required for A Business Loan

Every financial lender follows some specific criteria pertaining to eligibility and documentation before sanctioning any loan amount. Any individual aspiring to start a business should meet specific standards to receive the loan amount successfully. 

To this end, individuals applying for a business loan must provide authentic documents to ease out the loan procedure. These customised loans provide a boost to the organisation and help them to flourish in future.

These documents are a must for lenders to be able to process the loan application and approve it. Here's a typical business loan documents list that is needed by the lenders to approve of a business loan -

• Identity proof: Applicants are required to provide their identity proof with accurate KYC documents, including PAN card, driving license, Passport, Voter ID or any other authentic documents verified by the government.

• Address proof: Some financial institutions demand telephone bill, electricity bill, trade license as address proof, other than KYC documents. Applicants can choose any other document verified by the government authority as address proof to complete the loan application procedure.

• Monthly income proof: For any loan approval, it is important to verify a borrower’s monthly income. Top financial lenders will ask for proof of monthly income before sanctioning any loan amount. After verifying that the borrower earns a decent monthly income and upon providing the documents required for the business loan to support the same, the amount is sanctioned.

• Other financial documents: Existing business owners who have applied for this advance should produce a copy of income tax return filing documents for at least 1 year, along with the balance sheet, profit and loss statement for the previous 2 years, etc. to prove the potentiality of your business and assures lenders on your repayment capability.

• Proof of business ownership: This can include registration documents if the business is a sole proprietorship. Other documents to support business ownership include a PAN card issued in the name of the business, municipal tax payment receipt, etc.

With the submission of these documents, individuals can receive loan approval from top financial institutions like Bajaj Finserv. The NBFC extends a business loan amount of up to Rs.45 lakh along with a flexible tenor of 84 months based on the type of business and the applicant’s profile.

Few of the other documents required specifically for applicants belonging to different categories include the following - 

• For self-employed professionals: In the case of sole proprietors, business registration documents are required in the application procedure of a business loan. Lenders need this proof to evaluate your loan application. Other documents proof for self-employed professionals include PAN card, payment receipt for municipal tax IT returns etc.

• For self-employed non-professional: Business registration document of sole proprietors, identity proof of the owner, 6 months account statements, IT return filing documents.

• For partnership or private limited companies: Partnership documents and other supporting documents like income tax, GST statement, business registration document etc.

This is the exhaustive business loan document list required by the financial lenders while sanctioning a loan amount. If any individual is incapable of providing any such documents, it can be one of the reasons for the rejection of a business loan application. Interested applicants can check off the above list and know how to get business loan in India or any other state in India for their business venture. 

To further ease the loan application procedure, several NBFCs have introduced pre-approved offers on loans. These offers are available on a business loan, personal loan and more. To check your pre-approved offer, you need to submit your name and contact information in the requisite form.

Hence, individuals can utilise the borrowed money to establish their business unit, purchase business equipment, maintain inventory, enhance stock, purchase raw materials, etc. Furthermore, providing this business loan document list allows financial lenders to analyse your business position thoroughly and consequently, the chances of loan approval increase substantially.