Documents required to obtain business loan from banks

Updated on Nov. 11, 2021, 5:13 a.m.

Running a business require management skills and financial discipline is most important skill. Every business at some point of time require financing from external sources. If you need a loan from bank, here is complete procedure.

You can approach any bank for a business loan. Either you can approach under government schemes such as Mudra or PMCGS or for bank schemes. Every bank either offer collateral loan or without any collateral. Interest rate differs in case of collateral or non-collateral loans. Some banks even require a guarantor to provide loan. You can also transfer your loan from one bank to another and process adopted by banks in case of transfer is similar to providing a new loan.

Documents required for loan

Every bank has a similar process to accept and process loan applications. Documents are sent to credit analysis department and credit analysis department scrutinise documents  to validate loan sanction.

Documents required for taking business loan from bank are:

  • PAN card
  • Identity proof
  • Address Proof
  • Income Proof
  • Business proof
  • Business viability report

Identity Proof

You can provide one the following documents for identity proof.

  • Aadhaar Card
  • Passport
  • Voter's ID Card
  • PAN Card
  • Driving License
  • Any other government issued identity proof.

Address Proof

You can provide any one of the below documents for address proof.

  • Aadhaar Card
  • Passport
  • Voter's ID Card
  • Driving License
  • Any other government issued address proof.

Income Proof

You should provide following documents for taking loan from a bank.

  • Income Tax Return (ITR) acknowledgement for 2 years
  • Bank statement
  • Audited or CA certified financials for 2 year if existing business

Business Proof

You need to provide proof that you are running a business. You should provide below documents to prove a running business.

  • GST registration certificate
  • Company registration certificate, in case of a company
  • Partnership Deed, in case of partnership firm
  • Any other registration certificate specifically required for business you operate.

Business viability report

Business viability report is a report that explains performance of business over a period of time. Project report is required for obtaining any business loan. You need to prepare project report to establish that business is capable of repaying the loan and interest amount.

A project report or CMA report should have projected balance sheet, profit and loss statement, cash flow statement and ratios such as current ratio, DSCR.

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