Gone are the days when document verification took months to finish. Due to minimal documentation and online verification facility, business loan approval has become a lot easier today. But how do you make sure the document verification process goes smoothly?
In addition to a duly filled business loan application form, ready a comprehensive business report as well. Give a complete account of how you plan to spend the borrowed amount on your business needs. A detailed report allows lenders to have a better idea of the lending risk, often tipping the scales in your favour.
Additional Read: Step by Step Business Loan Application Process Explained
In some cases, the verification process may even follow a one-on-one discussion. Be prepared with the necessary information to answer any and every question related to the loan. In this way, the loan application process will be a lot easier.
Finally, prepare the required business loan documents well in advance. The documents you need to furnish for the verification process include:
Photo identity proof
Applicants need to furnish a passport size photographwith any valid identification document issued by the government.
- Voter ID
- Drivers’ license
- Aadhaar card
Business address proof
Other than the listed documents, applicants can furnish any valid address proof issued by the government.
- Sales Tax certificate
- Trade license/establishment
- Lease agreement
- Ownership agreement
- Ration card
- Electricity or telephone bill
KYC documents of the business entity
Now, the exact document requirements will vary based on the type of business entity – partnership firm, sole proprietorship, or private/public limited company.
However, commonly requested documents include:
- Memorandum and Article of Association
- Registration of Incorporation
- Sole Propriety Declaration/ Certified Copy of Partnership Deed
- Board resolution, if applicable
- Certified company bank statements of the past six months
- Income Tax Returns of the past two years
- Last six months’ balance sheet audited by a CA
- Profit and loss account for the previous two years
- GST challans
- Previous loan details, if any
Remember that furnishing the correct documents is essential, but it does not guarantee loan approval. Lenders typically approve business loans on a case-to-case basis, upon a careful assessment of the borrowers’ profile.
Additional Read: How to speed up Business loan Document verification process
Also, when it comes to business loan EMI, documents verification plays a vital role as well, since lenders assess your loan eligibility at this stage. Fortunately, lenders today offer laxer guidelines to provide borrowers with the upper hand. Many lending institutions even work in collaboration to help them secure customised loans.
As you know, business credit allows you to raise capital without any personal spend. You can obtain funds for a host of purposes, including business expansion, inventory purchase, infrastructure investment, among others. Needless to say, a business loan is an excellent way to keep your cash flow optimal.
Want a business loan? Apply with Tata Capital to obtain bespoke finance solutions for your business needs. Get lucrative loan terms with convenient repayment tenure. Avail up to Rs. 75 lakhs to break your business barriers comfortably. For further details, visit our website today!