Business Loan Ready? Here’s Your Essential Checklist

Securing a business loan involves more than just submitting a request. Financial
institutions evaluate applicants based on their creditworthiness, documentation, and
business stability. Whether you are running an MSME or scaling a startup, being
prepared with the correct information can significantly increase your chances of
approval.

Eligibility Criteria for a Business Loan

• Business Age: Most lenders require a minimum of 1 to 3 years of business
  operation.
• Business Type: Eligible entities include sole proprietorships, partnerships,
  LLPs, and private limited companies.
• Annual Turnover: Varies by lender, but a minimum of ₹10–50 lakhs is commonly
  expected.
• Credit Score: A personal or business credit score of 700+ is preferred,
  especially for unsecured loans.
• Promoter Age Limit: Applicants should typically be between 21 and 65 years of
  age.
  

Checklist for Business Loan Application

1. KYC Documents: PAN Card, Aadhaar Card, and address proof of the business.
2. Business Registration Proof: GST certificate, partnership deed, or company
   incorporation certificate.
3. Bank Statements: Last 6 to 12 months of the business’s current account
   statements.
4. Income Tax Returns: Filed ITRs of the business for at least the last two financial
   years.
5. Financial Statements: Profit and Loss Account, Balance Sheet (preferably
   audited).
6. Loan Purpose Document: A short note detailing the intended use of the loan.
7. Loan Repayment Track Record: If you have any existing loans, provide details
   of repayment.

Recommendation

Maintain updated and accurate records, file taxes regularly, and ensure your business
complies with legal requirements. Lenders favour applicants who show financial
discipline, transparency, and a clear plan for fund utilization.