Credit Wisdom

  A loan should be taken to expand and grow your business. At times an urgent flow of finance is required to fuel the growth of an enterprise. Customized loan with flexible EMI options can be a great help. 

To apply for a business loan, the minimum eligible age is 25 years and maximum 65 years. Another crucial factor is that the business should be making profit for the last 3 years. Turnover must not depict a decline over last year and should be at least 40 lakhs for Proprietorship, Partnership Firm, Private Limited Companies, Limited Companies, Societies and Trusts along with an ITR of minimum 3 lakhs. 

Generally the documents required for business loan includes the following things: 

1- A passport sized photograph of each of the applicant and co-applicant, of directors and promoters in case of company and trust, of all the partners in case of a partnership firm and of authorized person as applicable in case of societies.

2- Income Tax Returns, Audited Profit and Loss Account Statement, Balance Sheets for the last two years along with the bank statement of primary current account for the last six months, business proof, latest year provisional sundry creditors and debtors list.

3- Certified copies of bank account statement for the last six months.

4- Know Your Customer (KYC) documents for the co-applicants.

5- Partnership Deed/ Memorandum Of Association (MOA) and Article Of Association (AOA)/ License issued under the shops and Establishment Act of the respective states of business proof.

The credit score is important for the business loan and is closely linked with the amount you can raise from any financial body. A low rating may lessen your loan amount and in certain cases lead to absolute refusal of loan. In almost all forms of business various agencies give out credit rating on the basis of repayment and financial strength of a company.

At the end of the day it is dependent upon the economic conditions prevailing in the country. If there is an economic slowdown then it is very difficult to raise money from any bank. If the Central Bank has tightened monetary stance and increased its key rates, then it is well expected that it would be tough to raise money from banks. Exactly opposite would be the scenario in the boom period when general enthusiastic mood prevailing in the economy makes it easier to raise money.