Points to Be Considered Before Applying for Business Loan - Loan Trivia


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Friday 13 May 2016

Points to Be Considered Before Applying for Business Loan

If you want to be an entrepreneur with small or medium business, the first and most important step of starting a company is raising the fund. If you are a running a startup, then  you must be aware of the hurdles related to acquisition of capital. There is two options either you can sell your equity in market or you can take a loan from any individual or organization.
Now-a-days, many banks and NBFCs offer loans to small business at attractive interest rates.
Before applying for a business loan you need to check certain points.

Performance on financial front:
Lenders assess all financial foothold of your company which imprints in balance sheets, income statements, and proof of consistency of net worth. You need to submit 3 years of your financial statement to the lender.
Required Documents:
While applying for a business loan you need to be aware what all  documents you have to submit. Here's a checklist to help you get all the documents sorted for the loan application:
  • Proof of identity ( Voter ID, driver's license, or passport)
  • Address proof (house agreement/ration card/telephone or electricity bill)
  • Bank Statement ( last 6 months)
  • Latest income tax report 
  • Balance sheet and profit & loss Statements certified by a chartered accountant.
  • Educational qualification proof
  • Trade license/sales tax report/establishment certificate
  • Proof of business existence (at least 2 years old for an existing business)
  • Proprietorship declarations, partnership deeds, copy of MOA, AOA, and board resolution

If you are a newbie in the business world and you have no idea about business loans, you must know all facts before applying for business loans.

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