Business Loan Eligibility How to apply and necessary document required--?????

A business loan can be availed with or without security, it depends on the bank that offers loan and then the amount of risk they are ready to take. Whether business loan is for an existing business or to start a brand new one, there are many banks in India that offers loan for both small and big businesses. Getting approval and money is possible within few days if you have all necessary documents and if you meet the eligibility criteria.

One needs to meet certain business loan requirements to avail them. Here is the list of eligibility criteria to apply for a business loan in India.

• Limited or Private Limited Company
  Net income of the concern should be more than ₹150,000 per annum for business loan up to ₹1,500,000 and over ₹300,000 for business loan above ₹1,500,000.
• Partnership or Proprietorship Firm
  A minimum of 25% stake each can be clubbed to the income of the concern
• Chartered Accountant / Self Employed Professional
  Who possess diploma or degree in any of these discipline like art / craft /profession or Who possess the skill that is considered as a profession from banks perspective shall be considered for any financial assistance. For example: Dental Surgeons, Accountants, Medical Practitioners, Engineers, Craftsmen, Management consultants, Construction contractors etc.

It is possible to manage the cash flow, upgrade business equipment and grow the business by the option of business loans. Each bank has specific requirements, criteria and eligibility factors. Here is the list of few banks document requirements and other details mentioned.

Checklist of Documents Required for Business Loan

To avail a business loan, an applicant needs to provide the following documents as per the lender's requirements.

• Identity Proof: Driving License / PAN Card / Passport / Voters ID Card / Aadhaar Card.
• Address Proof: Ration Card /Telephone Bill / Electricity Bill / Passport / Trade license / Lease agreement / Sales Tax certificate.
• Income Proof: Bank Statement of Last 2 Years.
• Financial Documents: Last 2 Years ITR along with computation of Balance Sheet, income & Profit & Loss a/c for the last 2 yrs.
• Proof of Business Continuation
• Business Ownership[ Proof: Other Mandatory Documents such as Sole Proprietorship Declaration, Certified true copy of Memorandum & Articles of Association
• Last 3 years audited financials.

List of Common Documents Required for Business Loan

Here is a list of documents that are commonly required by all the business loan lenders.

• Application Form: Complete loan application form with one passport size photograph
• Valid Proof of Applicant's Identity: Passport, Photo PAN card, Voter’s identity card , Driving license and MAPIN card
• Proof of Residence: Ration card/Telephone Bill/ Lease agreement/ Electricity Bill/ Passport/Trade license /Sales Tax certificate
• Proof of Age: Passport, Photo PAN card, Voter’s identity card
• Financial Documents: Copies of IT returns for the last two years along with the latest Bank statements for 6 months and P & L and balance sheet for last two years audited by a C.A.
1. Self Employed (Private Ltd. Co. and Partnership Firms): P & L Copies of IT returns for the last two years and P & L and balance sheet for last two years audited by a chartered accountant.
2. Self Employed Individuals - Professionals: Copies of IT returns for the last two years and Bank statements for last 6 months and – Professionals: P & L and balance sheet for last two years audited by a chartered accountant
3. Self Employed Individuals - Non Professionals: P & L and balance sheet for last two years audited by a chartered accountant and Copies of IT returns for the last two years and Bank statements

Documents Required for Self Employed (Private Ltd. Co. and Partnership Firms)

• Proof of Identity of Private Limited Company: Sales tax / VAT /Service tax / Excise registration, / IT return of the concern, Water / Electricity / Registration under Shops and Establishment Act, PAN ID /Municipal tax bill in the name of the concern, Memorandum and Articles of Association
• Proof of Individual Identity: Proof to be submitted for the authorized signatories and about two directors (which includes the managing director) (any one of the following): PAN card, Voter’s identity card, Driving license and Passport

Documents Required for Self Employed Individuals – Professionals

• Proof of Identity of Sole Proprietorship: Proof of identity of the sole proprietorship
• PAN ID / IT return of the concern or Municipal tax, Water, Electricity bill in the name of the concern
• Individual identity proof to be submitted for the Sole Proprietor: Passport, Driving license, Voter’s identity card, Photo PAN card.
• Proof of residence address for the Sole Proprietor: Driving license, Ration card, Passport, Voter’s identity card

Documents Required for Self Employed Individuals - Non Professionals

• Proof of identity of the sole proprietorship
• Proof of individual identity
• Three years income tax returns
• Three years sales tax returns
• Copy of periodic stock, age wise book-debt and creditors-statement for latest three months
• Copy of last 6 months bank statement of main banker / copy of bank statement for the term loan

Business Loan Application Form is a mandatory document to be filled, it is clear that irrespective of which bank you are look to apply for a business loan, without necessary documentation the request will not be process. Keep these paper works done before approaching the bank.

 

 

 

To be eligible for a business loan there are a lot of factor that are considered. Every bank that offers loan will look into many criteria prior to sanctioning it. Few important ones are:

• Age Limit: The applicant should be min 21 years & max. 65 years.
• Income: Business should be profit making at least for the past 2 years.
• Turnover: ₹150,000 p.a. should be the minimum annual income.
• Co-applicants: This is optional to the applicant, not mandatory in case of business loan.

Customer Profiles that Banks Consider for Business Loans

There are various types of business loan customers, while some are direct individual who are self-employed or salaried, the other are entities and companies. A big bank will have both types of customers when it comes to a request of business loan. The criteria, applicant judgment style, measurability, rate of interest and tenure will differ according to each customer type. Thus while applying for a loan, check which customer category you belong to and accordingly look for the eligibility criteria.

• Self Employed Professionals (SEP) are usually Chartered accountants, allopathic doctors, company secretaries, architects and designers who are practicing a profession. The other type is Self-Employed Non-Professionals (SENP) such as the traders and manufacturers. The eligibility criteria, documentation requirement, interest rate; loan tenure alters per their category.
• Entities: Limited Liability Partnership, Partnerships firms, Private Limited and closely-held Limited companies are those that fall under this category. This even includes banks and non-banking financial companies who are looking for funds from reputed banks.
• Other constitution types depending on the business profile on a case by case basis are considered by banks, the criteria for these are mentioned in every bank’s policies and procedures.

Comparison of Business Loan Eligibility Criteria across different Banks/NBFCs

Every bank has unique eligibility criteria according to the types of borrowers, location, age of the applicant and so on. Finding a right bank that serves your need is left up to you, though the online applications can help the applicant with variety of options, the choice is left to each individual/ business owner. Here is the list of few top banks and their eligibility criteria for business loan; this can be used to understand per which bank you are eligible for a business loan.

 

A business loan can be availed with or without security, it depends on the bank that offers loan and then the amount of risk they are ready to take. Whether business loan is for an existing business or to start a brand new one, there are many banks in India that offers loan for both small and big businesses. Getting approval and money is possible within few days if you have all necessary documents and if you meet the eligibility criteria.

One needs to meet certain business loan requirements to avail them. Here is the list of eligibility criteria to apply for a business loan in India.

• Limited or Private Limited Company
  Net income of the concern should be more than ₹150,000 per annum for business loan up to ₹1,500,000 and over ₹300,000 for business loan above ₹1,500,000.
• Partnership or Proprietorship Firm
  A minimum of 25% stake each can be clubbed to the income of the concern
• Chartered Accountant / Self Employed Professional
  Who possess diploma or degree in any of these discipline like art / craft /profession or Who possess the skill that is considered as a profession from banks perspective shall be considered for any financial assistance. For example: Dental Surgeons, Accountants, Medical Practitioners, Engineers, Craftsmen, Management consultants, Construction contractors etc.

Factors Deciding Business Loan EligibilityTo be eligible for a business loan there are a lot of factor that are considered. Every bank that offers loan will look into many criteria prior to sanctioning it. Few important ones are:

• Age Limit: The applicant should be min 21 years & max. 65 years.
• Income: Business should be profit making at least for the past 2 years.
• Turnover: ₹150,000 p.a. should be the minimum annual income.
• Co-applicants: This is optional to the applicant, not mandatory in case of business loan.

Customer Profiles that Banks Consider for Business LoansThere are various types of business loan customers, while some are direct individual who are self-employed or salaried, the other are entities and companies. A big bank will have both types of customers when it comes to a request of business loan. The criteria, applicant judgment style, measurability, rate of interest and tenure will differ according to each customer type. Thus while applying for a loan, check which customer category you belong to and accordingly look for the eligibility criteria.

• Self Employed Professionals (SEP) are usually Chartered accountants, allopathic doctors, company secretaries, architects and designers who are practicing a profession. The other type is Self-Employed Non-Professionals (SENP) such as the traders and manufacturers. The eligibility criteria, documentation requirement, interest rate; loan tenure alters per their category.
• Entities: Limited Liability Partnership, Partnerships firms, Private Limited and closely-held Limited companies are those that fall under this category. This even includes banks and non-banking financial companies who are looking for funds from reputed banks.
• Other constitution types depending on the business profile on a case by case basis are considered by banks, the criteria for these are mentioned in every bank’s policies and procedures.

Comparison of Business Loan Eligibility Criteria across different Banks/NBFCs

Every bank has unique eligibility criteria according to the types of borrowers, location, age of the applicant and so on. Finding a right bank that serves your need is left up to you, though the online applications can help the applicant with variety of options, the choice is left to each individual/ business owner. Here is the list of few top banks and their eligibility criteria for business loan; this can be used to understand per which bank you are eligible for a business loan.

Axis Bank Business Loan Eligibility Criteria

No matter if you are a big corporate house or a small business owner if you are looking forward for the business loan than Axis bank is always there for you. Axis bank provides the business loan against the property. One of the most important features of the loan are competitive interest rate & doorstep service. Axis bank offers the business loan with the repayment tenure of 15 years.

Documents Required:

• Proof of identity (passport/ voter’s ID/ driving license/ PAN card/ Aadhar card)
• Proof of address (latest utility bill/ ration card/passport)
• Proof of income (Salary slip of last 6 months, 6 months bank statement, form 16 of current year)
• All the lease documents (if applicable)

Eligibility Criteria:

• The minimum age of the applicant should be at least 24 years. The maximum age of the applicant can be 65 years.
• The salaried applicant should be working in a reputed private company or a government company
• Any self-employed filling the income tax return can apply

Capital First Business Loan Eligibility Criteria

If you are looking for the flexibility in term of processing & documentation then Capital First is the place for you. The highest loan amount offered by the bank is 75 lakh which is enormously huge when it comes to other banks & financial institutions. No guarantor is required when you are applying for the business loan at capital first.

Documents Required:

• Filled application form
• Valid identity proof (passport/ voter’s ID/ driving license/ PAN card/ Aadhar card)
• Valid address proof (latest utility bill/ ration card/passport)
• Financial documents: income tax return & profit & loss & balance sheet of last 2 years, last 6 months bank statement & business proof.
• Current year performance and projected turnover on letterhead of the entity

Eligibility Criteria:

• The minimum age of the applicant should be of 24 years. The maximum age of the applicant should not exceed to 65 years
• The business should be making profit for the last 1 year
• The current business should be at least 48 months old
• The applicant should have at least 60 months of business experience.

Citibank Business Loan Eligibility Criteria

Citibank is one of its own kind when it comes to approval & disbursal of the loan. The brand is known to have released a business loan within 48 hours. The repayment tenure of the bank is 10 years. Apart from business loan Citi bank also offers the top up loan. So, this multiple loan options for the same individual at very competitive rate are the major perks to choose Citi bank for your business loan.

Documents Required:

• Filled application form for personal loan
• 2 Passport Size Photo
• Valid identity proof (passport/ voter’s ID/ driving license/ PAN card/ Aadhar card)
• Valid address proof (latest utility bill/ ration card/passport)
• Valid proof of Age (Passport/ Photo PAN card/Voter’s identity card)
• Financial documents: income tax return & profit & loss & balance sheet of last 2 years, last 6 months bank statement & business proof.

Eligibility Criteria:

• The minimum age of the applicant is 21 years in case of self-employed individuals, the minimum age for the salaried is 26 years.
• The maximum age limit is 60 years in case of salaried applicant. The maximum age limit is 65 years for self-employed applicants
• The applicant should have monthly income of at least ₹30,000.

ICICI Bank Business Loan Eligibility Criteria

ICICI bank is amongst the top five banks in India. The business loan from ICICI is tailored by keeping the requirement of the customers in mind. When it comes to corporate house ICICI bank has several options like finance for technology & innovation, working capital loan & term loan. For SME the options available are term credit, bank overdraft & export credit. So, there are wide varieties available covering all the required segments for business loan for corporate houses as well as for small business enterprises. One of the most unique features of ICICI business loan is they have a business loan available for women too. Not to forget customer support through customer care center round the clock.

Documents Required:

• Filled application form for personal loan
• 2 Passport Size Photo
• Valid identity proof (passport/ voter’s ID/ driving license/ PAN card/ Aadhar card)
• Valid address proof (latest utility bill/ ration card/passport)
• Financial documents: income tax return & profit & loss & balance sheet of last 2 years, last 6 months bank statement & business proof.
• Current year performance and projected turnover on letterhead of the entity

Eligibility Criteria:

• The minimum age of the applicant should be of 25 years. The maximum age of the applicant should not exceed to 65 years
• The business should be making profit for the last 1 year.

Induslnd Bank Business Loan Eligibility Criteria

Well if you are the time starved customer & need the interest rate & quotation in less time than choose Induslnd bank. They have designed the loan for various purposes that a business house would be looking from. Working capital loan, export loan, term credit, trade loan, you name it & they have it. They do have the unsecured business loan which gives you the business loan without aby guarantor or security. The bank offers the business loan up to ₹1,500,000. The tenure of repayment is ranging from 1 year till 5 years. Instant check for eligibility of business loan. Minimum documentation and rapid processing are the key features of the bank.

Documents Required:

• Valid identity proof (passport/ voter’s ID/ driving license/ PAN card/ Aadhar card)
• Valid address proof (latest utility bill/ ration card/passport)
• Last 3 months salary slip, last 3 months bank statement & form 16 for salaried applicant, last 6 months bank statement & profit & loss & balance sheet of last 2 years for self-employed applicant.
• Sole Proprietorship Declaration / Certified copy of Partnership Deed / Certified copy of MOA, AOA & Board resolution. In case of income derived from a partnership firm, latest 2 years partnership firm’s B/S, P&L a/c with all schedules certified by a CA for self-employed professionals.

Eligibility Criteria:

• The minimum age of the applicant should be of 25 years.
• The maximum age of the applicant should not be more than 65 years.
• The business should be making profit for the last 2 years.

Kotak Mahindra Bank Business Loan Eligibility Criteria

If you are looking for the bank for the purpose which no one else offers than Kotak Mahindra should be your choice? They offers the business loan starting from business banking solution, commercial vehicle Finanace, infrastructure finance. Kotak Mahindra offers the business loan up to ₹7,500,000. The rate of interest charged by bank is based on a benchmark, Prime Lending Rate (BPLR) which offered by Kotak Mahindra is 16.00% per annum.

Documents Required:

• Filled application form for personal loan
• 2 Passport Size Photo
• Last 3 months salary slip, last 3 months bank statement & form 16 for salaried applicant, last 6 months bank statement & profit & loss & balance sheet of last 2 years for self-employed applicant.
• Sole Proprietorship Declaration / Certified copy of Partnership Deed / Certified copy of MOA, AOA & Board resolution. In case of income derived from a partnership firm, latest 2 years partnership firm’s B/S, P&L a/c with all schedules certified by a CA for self-employed professionals.

Eligibility Criteria:

• Minimum age of the applicant is 23 years & maximum age of the applicant is 55 years.
• In case of salaried applicant, the applicant must be working at MNCs, public companies or any private reputed company.
• The monthly income of the salaried applicant should be greater than ₹25,000.
• Self-employed individuals need to submit the Income tax return of last 5 years & should have the yearly turnover of ₹250,000.

Tata Capital Business Loan Eligibility Criteria

If you are in need of the financial institute which is very transparent than TATA capital is the way to go. The process of the TATA capital if very customer friendly & easy to go with. TATA capital is the institute by TATA & when it come to TATA the trust & integrity is something that comes very handy. Online application option is also available for the one who are not in a position to go to the institute whenever it is needed.

Documents Required:

• 2 Passport Size Photo
• Valid identity proof (passport/ voter’s id/ driving license/ pan card/ aadhar card)
• Valid address proof (latest utility bill/ ration card/passport)
• Last 3 months salary slip, last 3 months bank statement & form 16 for salaried applicant, last 6 months bank statement & profit & loss & balance sheet of last 2 years for self-employed applicant.
• Sole Proprietorship Declaration / Certified copy of Partnership Deed / Certified copy of MOA, AOA & Board resolution. In case of income derived from a partnership firm, latest 2 years partnership firm’s B/S, P&L a/c with all schedules certified by a CA for self-employed professionals.

Eligibility Criteria:

• Minimum age of the applicant is 25 years in case of salaried applicant. The maximum age limit for the self-employed is 65
• The business should be profitable for last 3 years
• The business should have the turnover of ₹4 million & the turnover should be increasing throughout the time.
• The firm should have the Income tax return filled for at least ₹300,000.

HDFC Bank Business Loan Eligibility Criteria

• ₹4 million should be the minimum Turnover
• Years in business should be minimum of 3 years in current firm and 5 years of overall experience
• At least for the last 2 years the business must be profit making for the
• ₹150,000 p.a. should be the minimum Annual Income (ITR)
• Age limit of Applicant should be Min 21 years & Max. 65 years

Standard Chartered Bank Business Loan Eligibility Criteria

• Turnover: min ₹10 million and maximum ₹300 million.
• Tenure of the Loan: 15 months to 36 months
• Loan Amount Offered: min ₹500,000 to ₹50 million.
• All Sole proprietors / proprietorship firms, Partnership firms, Pvt. Ltd. Companies, Closely held Public-limited companies, Professionals such as chartered accountants, doctors, architects, business consultants are eligible

Ing Vysya Business Loan Eligibility Criteria

• No minimum loan amount.
• Maximum loan amount is ₹2.5 million.
• No collateral required.

Fullerton India Business Loan Eligibility Criteria

• Age limit at least 27 years under the ‘Self-Employed Business Category’.
• Relaxation up to 2 years is provided for non-professional.
• Maximum age limit is 65 years.

RBL Bank Business Loan Eligibility Criteria

• Business Loans is offered for self-employed professionals, self-employed individuals, sole proprietorships, private limited companies and partnership firms with at least 3 years of profit business
• Minimum age should be 23 years and maximum 65 years
• At least 5 years of experience needed in the same-line of business. For self-employed professionals, post-qualification experience of minimum 4 years is required
• Turnover should be ₹10 million for business and for Professionals gross receipts should be ₹6 million.
• Applicant must own an office or residence in their name or should be jointly with family members

Ways to Improve the Eligibility for a Business Loan

• Identify credit score reductions reason for the applicant and business, it could be because of credit card late payments or outstanding loan EMIs defaults, etc. Late payment and defaulting are the core factors for bad credit scores therefore it is essential that each individual must maintain good financial track record.
• Forget the past which cannot be altered anymore, never default payments for any future transactions. Make all payments timely and keep adequate balance in the bank account for the ECS transactions.
• Repeated rejection of the credit cards and any other outstanding loans will lead to drop in the credit rating score by rating agencies. If one bank rejects, there is least chance of others accepting the application.

Always look for a bank that offers quick service with less interest rate. A transparent bank will be more flexible in its eligibility criteria. All these eligibility criteria can be adjusted and overlooked by the bank manager, thus having a good long term relationship with the respective manager will be quite helpful.

If you are planning to take a business loan in the future, keep an eye on your transaction and credit score from today because the past and present is considered by banks to decide your ability to repay the loan amount in future. Make use of all the options available in the market- at the same time be vigilant and take loans only from reputed banks.