ID proof : Pan card/ Passport/c Driving License
Signature Proof : Pan card/ Passport/Driving License
Age Proof : Pan card/ Passport/Driving License/DOB Certificate
Residence Proof : Passport/ Voter Card/Driving License/Ration Card/ Telephone Bill.
Office Proof : Telephone Bill/ Sales Tax registration certificate/ Electricity Bill
Ownership Proof : Electricity Bill/house tax/property papers Income Proof : last 3 years audited financial along with audit report with all
Bank statement : main account last 6 month. Sanction letter of existing Cash credit or overdraft limit availed by the company.
Collateral Security : Property papers which are offered.
Constitution proof : MOA/ partnership deed
Others : any Govt. registration like service tax, sales Tax, excise,
Loan Proof : Repayment Schedule of all running loans.
Eligibility Criteria for Different Employment Types
- Limited or Private Limited Company
Net income of the concern should be more than Rs. 150,000 per annum for business loan up to Rs. 1.5 million and over Rs. 300,000 for business loan above Rs. 1.5 million.
- 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 Eligibility
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: Rs. 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.
Factors that Negatively Impact Business Loan Eligibility
There are main factor that affect business loan eligibility directly and indirectly, some on the critical ones are explained below. This helps each individual to make sure they are legally eligible for a business loan. The negatively impacting factors are:
- Credit Rating: Each individual applicant’s credit worthiness is evaluated by the bank before processing the application. Good credit rating will increase the chance of getting the loan with more flexibility. Default payments, fraudulent activities, and outstanding huge loan will impact negatively on the potential, if one bank rejects you application due to credit rating issue; there is less chance of other banks accepting it, unless you are ready to pay big amounts as interest.
- Employer: If the employer with whom the applicant is working has a bad reputation in the market, without any second consideration, the application will be rejected. There are ample examples of this type seen often. The employer should be having a good credit rating, there are many rating agencies that rate these companies in today’s market and this information is readily available online for each and every one. Working for such employer should be reconsidered as it will not just affect you when applying loans by also to the career itself in the long run.
- Criminal Background: If ever the applicant has had a criminal background or if there is a suspect case filed against the applicant, there is absolutely no probability of getting a loan. All banks will be willing to offer loan only to those who are capable of paying the principal amount along with interests and those who are good in the eyes of law.
- Business Instability: It’s a crucial aspect for business loan consideration. If the income of the business is not stable and the profit is marginal then banks will be in need of collateral for approving the loan. Weak profit will affect the business negatively, thus it is essential to apply for a business loan only if the business is able to meet all eligibility criteria.