Documentation for Small Business Loans in India

Starting a small business in India often involves seeking financial assistance to help fund operations and growth. One common method is through small business loans, which can be obtained from various financial institutions, such as banks and Non-Banking Financial Companies (NBFCs). To apply for these loans, applicants need to provide certain documents that demonstrate the eligibility and viability of their businesses. This article outlines the typical documents required to obtain a small business loan in India.

General Requirements for Small Business Loans in India

When applying for a small business loan in India, the primary requirements include:

Identity Proof:

Aadhaar Card PAN Card Passport Voter ID Driving License

Address Proof:

Business registration certificate Bank statements for the last 6-12 months Copies of previously sanctioned loans if any

Additionally, depending on the lender, you may also need to provide:

Proof of business existence for a specified period (varies by lender) A minimum one-year vintage (business establishment for at least one year) GST certificate (Goods and Services Tax registration) 20 lakhs (Rs. 2 million) annual revenue (as per some lenders) Credit Information Bureau (CIBIL) score above 700 (for some lenders)

Application Process through UpScale and Flexiloans

At Upscale, an application for an unsecured loan typically requires:

12-month bank statements A decent CIBIL score Only a GST registration number is needed for most cases

They handle the process by connecting with financial institutions and offering the best possible deal to the applicants. For more information, you can reach out to them.

Flexiloans, another NBFC, requires the following documents during the application process:

PAN card (Personal KYC) Proof of residential address Last six months’ current account bank statement (Banking) GST registration certificate (Business KYC) Shops and establishment certificate for business KYC (if applicable) For loans greater than 20 lakhs (Rs. 2 million), additional documents such as: 2 years audited financials Last two years Income Tax Returns (ITR) 6 months GST returns

Conclusion

Obtaining a small business loan in India is a crucial step for startups and growing enterprises. The specific requirements can vary significantly from one lender to another. Providing accurate and complete documents can facilitate the loan approval process and increase the chances of securing the necessary capital to support business growth.