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All The Documents You Require For A Business Loan Application

Business Loan Application

When you start a new small business, there are certain hopes and aspirations that you want to fulfill. It could be to achieve tremendous success, earn lots of money, provide a comfortable life for your family, or earn a reputation in the market. With these dreams in your eyes, you start your journey towards becoming a successful businessman and put in your blood, sweat, and money into it.

You work wholeheartedly to make your business venture a huge success, but it is imminent that after a certain period, you require to infuse new funds into the business. It could be for business expansion or for payment of expenses, whatever the reason might be, the reality of the matter is that your business requires fresh funds on a regular basis.

But what if you are facing a cash crunch at the same time? What can you do? Thinking about scaling down your operations? No, this is not the way forward. Thankfully, you have now the option of availing small business capital loans from various financial institutions operating in the industry. These financial institutions offer you small business loans for a variety of purposes and are an excellent option to supplement your finances. With the rising popularity of smartphones and internet access, small business owners in India are now preferring online lenders that offer instant business loans up to Rs. 5 Lakhs, over other financial institutions.

Rising Popularity of Online Lending Companies

With the rising popularity of smartphones, it was high time for businessmen who wanted to take the pain out of the entire process of availing unsecured small business capital loans. The endless visits to the bank, waiting outside the manager’s cabin, an endless list of documents and questions would just drain out all their enthusiasm and they would be spending most of their day completing the formalities of the bank, rather than focus on their business.

This is where the online lending companies sense an opportunity and took the initiative. Online lending companies have launched their mobile apps which allow the business owners with a turnover of more than Rs. 10 Lakhs in a year to avail unsecured business loans up to Rs. 5 Lakhs with a few taps on their smartphone.

Online lending companies have transferred the power to the hands of the business owners, who can now avail instant loans of up to Rs. 5 Lakhs with a repayment tenor of up to 24 months for any business-related requirement of theirs. All they need to provide is their basic KYC and financial information. With the paperless and flexible procedure employed by these companies, the applications for unsecured business loans are approved and disbursed within a few working hours.

Documents Required for Business Loan Applications

With all the financial institutions striving for transparency in their loan processing operations, the eligibility criterion for a business loan has become very straightforward. You just need to provide you are basic financial and KYC documents for processing the application. The specific documents required for a business loan application vary according to the lender, but there are certain documents that are absolutely necessary.

Here is a list of the essential documents that are required by lenders for processing your unsecured business loan application:

  • KYC Documents: These documents are required to establish your and your business’s identity and address. Aadhar Card, PAN Card, Voter Id, GST Registration, VAT Registration, Rent Deed, Electricity bill, etc. are some of the documents that are required.
  • Income Tax Statements: Most lenders require 3 years of your personal ITR along with business ITR to ascertain your income level. ITR acknowledgment must be accompanied by a computation of income statement for the convenience of lenders.
  • Bank Statements: You would need to provide your savings account as well as current account statement for the last one year. This is required by lenders to check your banking behavior as well as your turnover. It helps them understand the financial strength of your business.
  • GST Returns: Earlier you had to provide the VAT and CST returns but these have now been replaced by the GST returns. If your business falls under the threshold of GST (turnover of more than 20 lakhs), even if under composition scheme, you need to provide your GST returns for last one year.

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  • Business Financials: You would also need to provide financial statements for your business, such as Balance Sheet, Profit, and Loss Account, and Capital Account along with all the necessary schedules and annexures.
  • Other documents: If you have availed some existing loans or using some credit card(s), you need to provide their running account statements along with the repayment schedule.

So, now that you know which documents you would need to provide to the respective financial institution, it would be ideal if you could prepare them in advance and keep them handy at a safe place.

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