What are the documents required for taking a small business loan?

October 11, 2018

Getting capital for a small business has become easier than before. There is a plethora of lenders, each offering multiple funding options for small business owners. So step one would be selecting the right loan offering for your needs. Once you’ve zeroed in on the right finance solutions for your needs, you will have to prepare for the application process. For many borrowers, this process can become tedious due to the complex documentation involved.

However, with a little research and prior planning, getting your documentation, and subsequently, the application process, will seem like a breeze. And to help you with your preparation, the following article will detail the documents required for most SME loans.

1. Common documents.

Though different types of businesses and business loans will entail a varying set of documents, some common documents remain constant. These include the ‘Know Your Customer’ documents such as business entity proof, Certificate of Incorporation, Deeds of Partnership, etc.

PAN cards are another common requirement for all types of small business loans. You will need to submit PAN cards of the business and those of the business owners, partners, etc. Third on the list of common documents required are the address proof documents. Again, you will have to submit address proof of both, the business and the business owners as well.

2. Financial documents of your business.

Applying for a small business loan will require you to submit a few financial documents pertaining to the business entity. These documents usually include the balance sheets, profit and loss statements, tax reports, etc. of your business. You will also have to submit the performance of the current year along with the projected turnover of your business, printed on the company letterhead.

3. Bank statements.

Bank statements form an important part of your documentation when applying for an SME loan. As a general norm, if you are a first time borrower, you will need to submit statements for the last 6 months. However, if you have borrowing history with your lender, they might require you to submit statements for up to 12 months.

4. Documents for SMEs.

These usually include the registration documents for Sales Tax, VAT, Service Tax and Excise. You will also have to provide the IT returns of the business entity and the utility bills of the concern. If applicable, you might also have to submit things like Bill for Municipal Taxes, the Memorandum, and Articles of Association.

5. Self-employed or a proprietor documents.

First on the list is proof of the identity of a sole proprietorship. Next up, you will have to furnish your PAN card, your IT returns, and the utility bills in the name of the company. As far as identity proof, you will need to produce any one of these - Passport/driving license/PAN card. Lastly, you will have to provide address proof, for which, Driving license, passport or a voter’s identity card should suffice.

If you want more information regarding the documentation required for a small business loan, simply get in touch with us. We will help you with all the information you need and help you clear any of your doubts.

Tags :

Business, Loans, Education, Home

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