Applying for a business loan is not a complex process most of the time, but, better preparations
for the loan ensure your chance of success. Following some process and opting for a lender that
focuses on SMEs can make your business funding quite simple and effective. There are a host of
lenders who provide SMEs with quick and easy access to the right loan for their business.
Why do you need a business loan?
The very first question you will be facing when you approach a bank for a business loan, so
prepare your response ahead of time. You need to know about your need and eventual utilization
of the loan. Business loans are used for numerous purposes — it could be the purchase of
equipment, inventory, supplies or furniture or even for working capital.
Documents required for a business loan:
The following are the documents required for the business loan along with the application:
PAN Card – For Company/ Firm/ Individual
For identity proof, a copy of any one of the following documents:
Voter’s ID card
For address proof, a copy of any one of the following documents:
Voter’s ID card
Bank statement for the previous 6 months
Latest ITR (Income Tax Return) along with computation of income, balance sheet, and
Profit and Loss account for the previous 2 years, after being the Charted Accountant
certified or audited.
Proof of continuation (ITR/ Establishment/ Sales Tax Certificate/ Trade license).
Other Mandatory Documents like Certified Copy of Partnership Deed or Sole property
declaration, Certified true copy of Memorandum and Board resolution (Original) &
Articles of Association (certified by the Director).
Eligibility criteria for getting a business loan:
The following are the eligibility criteria that one must meet to get a business loan:
Self-employed individuals, proprietors, private and partnership firms involved in the
business of Manufacturing, Trading or Services.
The business should have a minimum turnover of Rs 40 lakhs per annum.
The loan seeker must have been in the current business for a minimum of 3 years, with 5
years of total business experience.
A person whose business has been profit-making for the previous 2 years.
The business should have a minimum annual income of Rs 1.5 lakhs per annum (ITR).
The loan seeker should be at least 21 years of age at the time of applying for the loan and
should be no older than 65 years at the time of loan maturity.
Thus, considering the above-mentioned business loan eligibility, apply for the loan in a well-
reputed bank that provides loans for a lower interest.