Business Loan FAQs
Business loans are provided by various banks to business people for their short or long term financial needs. A lot of times it is important for businessmen to acquire a certain amount of money for running their enterprise. It is well known that without the required capital no business can run. For any business whether in initial stage or in growth phase, capital is required to keep up the momentum. Banks and other financial institutions offer business loans for expanding, modernizing or improving small, medium or large scale businesses.
Banks provide loans to business people for their short or long term financial needs. At various stages of running a business, capital is needed either for long term or short term needs. It is well known that without the required capital no business can be run successfully. For any business whether in initial stage or in growth phase, capital is required to keep up the momentum.
Business loans are provided to all kinds of enterprises like sole proprietorships, partnerships and private limited companies. Though income requirements can vary depending on banks, normally net income of the concern should be more than Rs. 150,000 per annum for business loan up to Rs. 15 lakh and over Rs.3 lakh for business loan above Rs. 15 lakh. A maximum of two incomes of the partners or directors holding a minimum of 25% stake each can be clubbed to the income of the concern.
There is need of submitting supporting documents while applying for a business loan. There are differences in the documents required for various types of companies like sole proprietorship firm, partnership firms and private limited companies. The documents needed may also vary slightly depending on the bank you have applied for the loan. Generally the following documents are required by banks for providing a business loan for a sole proprietorship firm:
- l Proof of identity of the sole proprietorship firm.
- l Proof of individual identity of the proprietor.
- l Proof of residence address of the proprietor.
- l Certified balance sheet of the enterprise for last two years.
- l Copies of IT returns for the last two years.
- l Bank statements of last 6 months for business credit up to Rs. 15 lakh and last 12 months for business credit above Rs. 15 lakh.