Business Loan Documents Required for a Project - Business Loan Blog - Tata Capital

Business Loan Documents for your Projects

Mar 07, 2017

Businesses may need additional sources of finance to pay for their overhead costs and daily operations. Firms also require funds to buy new equipment, pay for premises and to expand the business. Many financial institutions offer lending and credit solutions to fund capital investments and business growth. However, they require businesses to submit various documents before approving the loan.

Documents to be Submitted while Applying for Loans

Firms have to meet the business loan eligibility criteria and submit the following documents to their lender:

  1. Application Form
    • Applicants have to submit a duly-filled application form.
  2. Self-Attested Know Your Customer (KYC) Forms
    • Passport-sized photograph of every applicant and co-applicant
    • Residence/address proof of proprietors/partners/directors, whichever applicable
    • Residence/address proof of guarantors and security providers
    • Entity proof: Shops and Establishment certificate/ Partnership deed/ Certificate of Incorporation, whichever applicable
    • Self-attested PAN card copy of entity, directors/ partners/ proprietors, whichever applicable as well as of guarantors and security providers
  3. Financial Documents
    • Income Tax Returns of the previous year along with computation of income and copy of acknowledgment
    • Profit and Loss Statement and Balance Sheet of the last two years
    • Tax audit reports and Statutory Audit report
    • Last year's provisional and sundry creditors and debtors list
    • Proof of business continuity: ITR/Trade license/Establishment/Sales Tax certificate
    • Memorandum of Association (MOA), Articles of Association (AAO), Power of Attorney, or any other document required by the lender
  4. Bank Statements
    • Primary account bank statements for the previous six months

These are the minimum documents required by lending institutions. The requirements may vary from bank to bank. In most cases, the process of submitting documents is simple. However, if you have neglected to file even a single document, getting a loan approved would be difficult. Therefore, carefully check the documents before applying for a business loan.

The firm has to also provide documents related to the purpose of taking the loan. If the enterprise is borrowing a loan for a new project, the documents to be submitted include project report stating the cost of the project, sources of finance and future projections, along with justifiable details. Approval letters from the government for power, pollution and building plan has to be submitted, too. If the company seeks funds to purchase assets, the related documents to be submitted are invoices of the assets to be purchased, conveyance deed/allotment letter in case of land property as well as architect certificate confirming the cost of the structure to be constructed.

Nowadays, lending institutions have customized their lending programs to suit the financial requirements of organizations. Many lenders have an online presence, thus making the application process simpler. They also provide business loan quotes and have a business loan calculator online. This assists businesses in finding how much they can afford and how much has to be paid in EMIs periodically. Such benefits go a long way in making loan application process simple and hassle-free.