What Documents Do I Need to Apply for a Business Loan?

Securing a business loan offers small business owners and entrepreneurs the opportunity to expand their businesses and manage their cash flow. However, to make sure you get quick approvals without any hassle, you must be prepared with all the necessary documents required by the lender. Submitting the correct documents at the right time ensures your application doesn’t get rejected and increases your chances of getting the loan at better terms and sometimes at low interest rates.

Here’s an article that explores some of the documents required to get a loan for your business and tips for a smooth application process.

Essential Documents Required for Business Loan Application

Let’s explore some of the crucial documents every applicant must be prepared with when applying for a loan for their business:

• Identity and Address Proof: The most essential documents that prove your identity and confirm the address are:

1. Identity Proof: Aadhar Card, PAN Card, Driving license, Voter ID or Passport.
2. Address Proof: Aadhar Card, Rent Agreement, Passport or Utility Bills.

• Business Related Documents: To verify your business’s legal existence and get quick business loans, lenders typically require:

1. Business Registration: Business Registration Certificate, Company Incorporation Certificate or Partnership Deed.
2. Business Address Proof: Lease Agreement or Utility Bills.
3. Business PAN Card

• Financial Documents: The financial documents may include:

1. Business Bank Statements: Bank statements of the business for the last 6-12 months to show the flow of funds.
2. Income Tax Returns (ITR): To assess your firm’s financial health, lenders may ask for past 2-3 years of ITR.
3. Profit and Loss Statements and Balance Sheets: Detailed statements of the past 2-3 years and a balance sheet representing assets and liabilities.

• Business Plan and Loan Purpose: To strengthen your business loan apply request, many lenders request a well-structured business plan that showcases your business plan, expected revenue, and the strategies for growth. Make sure you mention the purpose of your loan, whether for equipment financing, working capital or expansion, and a repayment plan.
• Collateral Documents: If a lender asks for collateral documents as security, you must provide the property documents with valuation and ownership proof, equipment or machinery documents, and insurance papers for the assets you have pledged for the business loan.
• Additional Documents: Make sure you are prepared with the following documents as well:

1. GST Returns: If your business is GST (Goods and Services Tax) registered, then provide last 2-3 years of GST filings.
2. TDS Certifications: Provide the proof of tax deductions on business payments.
3. Credit Score: Get your CIBIL or credit score report to prove your creditworthiness.
4. Existing Loan Documents: Lenders may ask for your existing loan documents and repayment history.

Tips for Smooth Application Process

Before you apply for a business loan, ensure that you consider the following tips:

• Be prepared with all the documents and make sure they are organised.
• Double-check that all the information on the documents is correct.
• Maintain a good financial record of your business and keep it regularly updated and accurate.
• Do your research and make sure to check all the documents required by the lender that you choose.
• If required, consult with a financial advisor to get the right guidance.

Final Thoughts

Applying for loans for your business is straightforward, if you are prepared with the right documents and make sure the information is correct. To make sure the business loan application process is hassle-free, choose a trustworthy lender like Bajaj Finserv. Bajaj Finserv is a one-stop and user-friendly platform that offers loans at flexible repayment terms, competitive interest rates, and a 100% online application. It charges no hidden fees and requires no collateral.

So, ready to take your business to the next level? Gather all the right documents and follow the above-mentioned tips to successfully make a loan application and make the most of your funds.