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.