Filling up the business loan application form is the first step towards getting a loan. Irrespective of the lender, it is an important and mandatory step for all applicants. From the lender’s perspective, thoroughness in document verification and assessment of risk are two highly important tasks. Hence, it is important for SMEs to understand the business loan documents they need to submit just as much as their business loan requirements.
A loan application will almost always need to be submitted along with the necessary business loan documents—the paperwork necessary to demonstrate your creditworthiness and ability to repay. A loan application will get processed faster if the supporting business loan documents are transparent and inspire trust and confidence in the lender.
Some of the business loan details commonly asked for are mentioned below:
These documents need to be self-attested. Self-attestation means signing on the copy of the document.
|Products from Capital Float|
|Business Loan Documents||Term Loan||Online Seller Finance||Pay Later||Merchant Cash Advance||Supply Chain Finance|
|KYC documents (SME & Applicant)||Yes||Yes||Yes||Yes||Yes|
|ITR – audited financial documents (2 years)- Except Term Loan, only for loans>15 lacs||Yes||NA||Yes||NA||Yes|
|VAT returns (last 3 months – 1 year)||Yes||NA||Yes||Yes||Yes|
|Bank statements (last 6 months)||Yes||Yes||Yes||Yes||Yes|
|Loans or OD sanctions (if any)||Yes||NA||NA||NA||NA|
|Card settlements (3 months’ history)||NA||NA||NA||Yes||NA|
|Invoices (3 months) and sales ledger (6 months)||NA||NA||NA||NA||Yes|
Requirements for business loan also depend on the nature of applicant—individual or business.
Most SMEs begin to learn about business loan requirements, documents and qualification only when they are in dire need of a loan. By the time they understand all the details and compile the necessary business loan documents, precious time and opportunities are lost.
We recommend that SMEs make a note of the most commonly required documentation for loans and keep it ready at all times. It is a good practice to maintain up-to-date copies of KYC, ITRs, bank statements and other documents required for business loan.