Is Business Loan Eligibility Still Relevant? Check Out

01 Feb

Is Business Loan Eligibility Still Relevant?

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Documents to be submitted while Applying for Business Loan

Firms have to gather the business loan eligibility criteria and submit the following documents to their lender:

Application Form

Applicants have to submit a duly-filled application form.

Self-Attested Know Your Customer (KYC) Forms

Passport-sized photograph of every applicant and co-applicant
Residence/address, proof of proprietors/partners/directors, whichever applicable
Residence/address, proof of guarantors and security providers
Entity proof: Shops and Establishment certificate/ Partnership deed/ Certificate of Incorporation, whichever applicable
Self-attested PAN card copy of an entity, directors/ partners/ proprietors, whichever applications as well as of guarantors and security providers

Financial Documents

Income Tax Returns of the previous year, along with computation of income and copy of acknowledgment
Profit and Loss Statement and Balance Sheet of the last two years
Tax audit reports and Statutory Audit report
Last year’s provisional and sundry creditors and debtors list
Proof of business continuity: ITR/Trade license/Establishment/Sales Tax certificate
Memorandum of Association (MOA), Articles of Association (AAO), Power of Attorney, or any other document required by the lender

Bank Statements

Primary account bank statements for the previous six months

These are the minimum documents required by lending institutions. The requirements may vary from bank to bank. In most cases, the process of submitting documents is simple. However, if you have neglected to file still a single document, getting a loan approved would be not easy. Therefore, carefully check the documents before applying for a business loan.

The firm has to also give documents connected to the reason of taking the loan. If the enterprise is borrowing a loan for a new project, the documents to be submitted include project report stating the cost of the project, sources of finance and future projections, all along with justified details. Approval letters from the government for power, pollution and building plan has to be submitted, too. If the company seeks funds to purchase assets, the related documents to be submitted are invoices of the assets to be purchased, conveyance deed/allotment letter in case of land property as well as architect certificate confirming the cost of the structure to be constructed.

Nowadays, lending institutions have modified their lending programs to suit the monetary requirements of organizations. Many lenders have an online presence, thus making the application process simpler. They also provide business loan quotes and have a business loan calculator online. This assists businesses in verdict how much they can afford and how much has to be paid in EMIs periodically. Such benefits go a long way in making loan application process simple and hassle-free.

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