BUSINESS LOANAPPLICATION GUIDE

Revenue Requirements:

• • Minimum annual turnover: ₹50 lakhs - ₹1 crore
• • Consistent revenue growth (15-20% YoY)
• • Stable business operations
• • Diversified customer base
• • Seasonal business considerations
• • Industry-specific benchmarks

Profitability Metrics:

• • Positive net profit for 2+ years
• • EBITDA margin: 10-15% minimum
• • Debt service coverage ratio: 1.25x
• • Current ratio: 1.33x or higher
• • Return on assets: 8-12%
• • Working capital adequacy

Credit Score Requirements:

• • Business credit score: 700+ (preferred)
• • Promoter/Director CIBIL: 750+
• • No defaults in last 12 months
• • Clean credit history for 24 months
• • Existing loan performance record
• • Credit utilization below 70%

Banking Relationship:

• • Current account with bank (6+ months)
• • Regular transaction history
• • Healthy account conduct
• • No bounced cheques/overdrafts
• • Existing relationship benefits
• • Cross-selling opportunities

Partnership Firm:

• • Registered partnership deed
• • Partner guarantees (all partners)
• • Individual credit scores
• • Partnership resolution
• • Business continuity assurance
• • Succession planning

Sole Proprietorship:

• • Proprietor personal guarantee
• • Individual credit history
• • Business registration proof
• • Income tax returns (3 years)
• • Collateral security often required
• • Higher interest rates

Audited Financial Statements:

• • Balance Sheet (last 3 years)
• • Profit & Loss Statement
• • Cash Flow Statement
• • Notes to accounts
• • Auditor's report
• • Management letter (if any)

Tax & Compliance Documents:

• • Income Tax Returns (3 years)
• • GST Returns (12 months)
• • TDS certificates
• • Tax audit report (if applicable)
• • Advance tax payments
• • Assessment orders (if any)

Bank Statements & Records:

• • Current account statements (12 months)
• • Savings account statements
• • CC/OD statements (if existing)
• • Fixed deposit certificates
• • Investment portfolio details
• • Insurance policy documents

Credit History & Reports:

• • CIBIL report (business & personal)
• • Existing loan statements
• • Credit card statements
• • Loan closure certificates
• • No dues certificates
• • Guarantee obligations

Financial Assessment:

• ☐ Determine loan requirement & purpose
• ☐ Assess repayment capacity
• ☐ Calculate debt-to-income ratio
• ☐ Prepare financial projections
• ☐ Identify collateral security
• ☐ Review credit scores

Bank Research & Selection:

• ☐ Compare interest rates & terms
• ☐ Evaluate processing fees
• ☐ Check eligibility criteria
• ☐ Review bank's lending policies
• ☐ Consider existing relationships
• ☐ Assess service quality

Documentation Preparation:

• ☐ Compile complete document set
• ☐ Obtain certified copies
• ☐ Prepare business plan
• ☐ Get property valuations
• ☐ Organize financial statements
• ☐ Verify document accuracy

Formal Application:

• ☐ Complete loan application form
• ☐ Submit required documents
• ☐ Pay processing fees
• ☐ Provide guarantor details
• ☐ Submit collateral documents
• ☐ Obtain acknowledgment receipt

Initial Screening:

• ☐ Document verification
• ☐ Eligibility assessment
• ☐ Credit score evaluation
• ☐ Basic financial analysis
• ☐ Preliminary approval/rejection
• ☐ Additional document requests

Detailed Evaluation:

• ☐ Financial statement analysis
• ☐ Cash flow assessment
• ☐ Business viability study
• ☐ Collateral valuation
• ☐ Risk assessment
• ☐ Credit committee review

Field Verification:

• ☐ Business premise inspection
• ☐ Collateral property verification
• ☐ Reference checks
• ☐ Neighbor/locality verification
• ☐ Stock/inventory verification
• ☐ Technical evaluation (if required)

Final Approval Process:

• ☐ Credit committee presentation
• ☐ Final risk assessment
• ☐ Loan terms finalization
• ☐ Sanction letter issuance
• ☐ Legal documentation
• ☐ Disbursement preparation

Legal Documentation:

• ☐ Loan agreement execution
• ☐ Security creation documents
• ☐ Guarantee agreements
• ☐ Insurance policy assignments
• ☐ Post-dated cheques/ECS mandates
• ☐ Compliance certificates

Disbursement Process:

• ☐ Final disbursement conditions
• ☐ Account opening (if required)
• ☐ Fund transfer/cheque issuance
• ☐ Disbursement confirmation
• ☐ Repayment schedule activation
• ☐ Ongoing monitoring setup