Documents Require for Business Loan

Business Loans are offered in two types, Secured and unsecured.

For a Secured Business loan, the borrower needs to pledge something as collateral or security against the loan amount taken. Be it raw material or finished products, land or machinery, anything can be kept as collateral in agreement with the lending party. The borrower can also offer cash advance as collateral as it offers more liquidity and the loan can be availed at lower interest rates and flexible repayment options.

In case of unsecured business loans, here is no requirement of any collateral from the borrower. However, while availing an unsecured business loan, the borrower needs to pay a high interest rate. Moreover, the loan amount is taken for a smaller tenure when compared to a secured loan. According to the their tenure, business loans can be further diversified.

To meet the temporary needs of a business like short term working capital, a short term loan is most apt one, with the repayment time period of a year. An Intermediate Loan is necessary for starting up business to buy inventory, equipment and also increase working capital. A Long term is necessary for well established business houses who wish to expand, increase their fixed assets or related business acquisitions,with terms that runs for a period of 3-5 years.

Documentation Require for Business Loan:
PROOF OF IDENTITY (any one)
  • Photo PAN Card
  • Voter's Card
  • Passport.
  • Driving License
PROOF OF AGE
PROOF OF SIGNATURE
  • PAN Card
  • Passport.
  • Banker's verification of signature
PROOF OF RESIDENCE (any one)
  • Utility Bill
  • Rental Agreement
INCOME PROOF
  • Latest 6 months Bank Statement from Operating Account
  • Last 2 years ITR with computation of Income/Certified Financials
  • Proof of Turnover (latest Sales/ Service Tax returns)
PROOF OF CONTINUITY CURRENT PROFESSION/BUSINESS (IT Returns / Certificate of business continuity issued by the bank).
SECURITY DOCUMENTS (Loan is available only against Collateral Securities)
  • Mortgage of Immovable Property (Building and non-agricultural land) or National Savings Certificates, Government Bonds, Bank's Term Deposits, Assignment of Life Insurance Policies standing in the name of borrower/ proprietor/partner/ director.
 

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