Documents required for getting a Loan from Bank for SME

required-documents-for-getting-loan

Whenever we plan for a business it is foremost that we must keep credit flow. With the shortage of funds, it is operose to keep the flow of credit. In order to rectify, one can also opt for an option of a loan from the bank.

The loan will initially solve the issue of credit flow irrespective of whether it is microenterprise, small or medium enterprise (SME).

In pursuit of this article, we will breach about who is eligible to get SME loan and what documents will be required to get a loan from the bank.

Q. Who is eligible for SME loan?

A. You are eligible for SME loan if:

  • Individuals looking to expand their business i.e., Self-employed individuals.
  • Private Limited Companies
  • To further excel and progress in business ventures i.e. Proprietorship firms.
  • Business seeking a long way in their respective business fields and establish warehouses and other things i.e. Partnership firms.

Q. What are the documents required for getting SME loan from bank?

A. Documents required by the bank to approve SME loan:

  • Application Form
  • Self-Attested Copies of the Know Your Customer (KYC) Documents
  • A copy of the PAN card
  • Address proof
  • Last 3 years audit/provisional financials which include the balance sheet, profit and loss sheet along with the schedules and notes to the accounts, tax audit reports, and the statutory audit report.
  • The Current year performance and the projected turnover on the letterhead of the entity.
  • Last 1-year income tax returns of the borrowing entity along with the computation of the income and the copy of the acknowledgment and if at all it is filed online then the acknowledgment number of the same is required for the proof of such submission.
  • Bank Statement:
  • Bank statements for the last 6 months if the borrower is borrowing for the first time and 12 months in case of takeover proposals.
  • In case of multiple banking, statements covering minimum 75% of banking turnover is to be provided.

Some facility specific documents are also required by the bank that is as under:

  1. The contract agreements of the Letters of the intent of the members of the enterprise and the order copies with the orders in hand along with the status which has to be guaranteed by the bank.
  2. Last 3 inland letter of credit transaction details for the ascending track record.
  3. The project report containing the cost of the project means of finance, the expenditure incurred and the other projections along with the justifiable details.
  4. In case of term loans, the government approval for power, pollution, building plan along with the documentary proofs is also required.
  5. In case of term loans, the performance invoices of assets to be purchased, a copy of allotment letter or conveyance deed in case of land, architectural certificate for the validation of the cost of the building to be constructed is also to be provided.

Centrik has been into business advisory for last 5 years with its expertise in SME registration and compliance, project funding etc. providing customer’s satisfaction. Including domain experts with over 10 years of experience across the country. In case of any further queries kindly write to us at support@centrik.in

 

Note – Please note that the above article is for education purpose only. This is based on our interpretation of laws which may differ person to person. Readers are expected to verify the facts and laws.

Leave a Reply

Your email address will not be published. Required fields are marked *