Business Loan

Every entrepreneur wants his or her business to flourish beyond the boundaries of its local position. This thought comes to their mind when the business starts to grow in its initial location and there is a positive flow of profit. Businessmen understand the need and urge to expand their product i.e. the very own business. But expanding the business beyond local capacities is not easy, financially speaking. It surely needs a strong monetary backing to meet with the needs of expanding the business. Whether its location, equipment, new recruitments or paying for the new communication channel, businessmen need a bucket full of finance. Thus they opt for a business expansion loan. By taking this loan, businessmen make sure that their respective business touches new heights of success.

What are the Eligibility Criteria to avail for Business Loan

Banks have divided applicants into two categories based on their profession. The eligibility criteria and list of documents change as according to these two categories

01. Banks have divided applicants into two categories based on their profession. The eligibility criteria and list of documents change as according to these two categories

  • Self Employed Professionals (SEP): Doctors, CA, CS, architects, engineers, etc.
  • Self Employed Non-Professionals (SENP): Trader, commission agent, contractor, etc.

02. Also, if you are applying as a company, you can avail loan by applying under the following entities:

  • Partnerships/Propretorship
  • Limited Liability Partnerships
  • Private Limited Companies

03. Other important requirements to avail Business Loan:

  • The minimum turnover of your business should be Rs. 60,00,000. The turnover should be in positive track.
  • You should have a minimum of 3 years' experience in current business and 5 years of experience in the overall business industry.
  • Your business must be making a profit for the last 2 years.
  • The age of the applicant should be a minimum of 25 years and a maximum of 65 years. You should have paid your business Income Tax Returns for the last 2 years.
  • You should have paid your business's Income Tax Returns for the last 2 years.
  • The borrowers should have a strong credit history. They should have a credit report ready for bank reviewing.

What are the Documents Required to avail a Business Loan?

  • Neatly signed and filled Business Loan application form.
  • Passport-size photographs.
  • Identity and signature proof - Passport, Pan card, Driving License, Voter ID card, Aadhar card, employee identity card in case of government employees.
  • Address Proof - Bank statement, Rent Agreement, Voter ID card, Ration card, Passport, Driving License, telephone/electricity/water/credit card bill or Property tax.
  • Age Proof - Voter ID card, Secondary school leaving certificate (class 10), birth certificate, Passport, Aadhar Card, pension payment order or receipt of LIC policy.
  • PAN card requirement for Companies/Firm/Individuals.
  • Copy of details of all existing loans.
  • Bank statements of last 6 months from application date.
  • Business proof (registration of business).
  • Copy of ITR/Assessment Orders of 3 years.
  • Copy of challans proving that Advance Income Tax has been paid.
  • Balance sheet and Profit & Loss details of business from last 2 years. These details should be certified by CA.
  • Proof of continuation which will include ITR, trade license, establishment and sales tax certificate.