Important Documents Required Before Applying for Your Business Loan in 2023


Applying for a business loan is an excellent way to invest in your business and let it grow. You can use your business loan amount to fund any business growth-related expenses, like purchasing inventory, upgrading machines and equipment, expanding the workplace, hiring staff, marketing, and others.

However, the business loan application process can be confusing at times, especially when the lender requests you to submit a variety of your financial documents. Let us see which financial documents are required before applying for your business loan and why.

Financial Documents Required for a Business Loan

Depending on the lender, there might be several financial documents you need to show to get loan approval. If you do not fulfil these business loan requirements or if there are any discrepancies in your financial documents, the lender may decide to reject your loan application. For instance, when you apply for a business loan from Clix Capital, you need to submit the following financial documents along with your identity and address proof:

  • PAN Card for a firm, company, or individual
  • 6-months bank statement
  • Copy of the most recent Income Tax Return form
  • Computation of income, audited balance sheet, and profit & loss account for the last 2 years
  • Proof of continuity of the business of 3 years, which can be your sales tax certificate, establishment, ITR, or trade license

Let us look at the reasons why lenders want to see these documents:

PAN Card

PAN or Permanent Account Number is a 10-digit alphanumeric code that the Income Tax department issues to identify taxpayers in India. Lenders want to check your PAN card to track your business’s financial transactions. Even if you are not paying taxes, you must show your PAN card if you are earning revenue.



GSTIN or Goods and Services Tax Identification Number is a 15-digit number assigned to each tax payer in India. It is critical for any business to avail several benefits offered under the GST regime. If your annual turnover is over ₹ 20 lakhs, then having a GSTIN is mandatory for you. Registered businesses need to file their GST returns and pay the GST liabilities if applicable. You may use your GSTIN to claim a refund later. Lenders want to check your GSTIN because it helps them ensure that your business is registered with the Indian government and eligible for a small business loan.

Bank Statements

Usually, business loan lenders want to check your past 6-months’ bank account statements. These documents are required to prove your business legitimacy and estimate your future cash flow possibilities. Lenders often prefer lending to businesses that have been earning revenue actively while efficiently managing their everyday expenses. This is the reason why lenders want to check your bank statements.

Income Tax Returns

Income tax returns of your business illustrate how well you have performed in the last few years. To project your tax returns effectively, ensure to balance maximising deductions and maintain an image of unswerving revenue while filing your taxes. Although you may minimise your expenses by writing off your taxes, availing numerous tax deductions may give a negative impression on your potential lenders.

Also Read: A – Z of Business Loans for First-Time Loan Applicants

Computation of Income and Related Documents

Your computation of income is a report of how your business has experienced cash flow in the past. Divided into expenses and revenues, it gives your lenders an idea of your business performance over the last few years. By reviewing your computation of income, lenders want to ensure that your expenses do not exceed your revenues.

Audited Balance Sheet

The computation of income is much different from your balance sheet. While computation of income statement reports your performance in the past, the balance sheet showcases your current financial position. An audited balance sheet represents the varied financial components of your business, including your existing assets, liabilities, and equity sources.

Since the balance sheet essentially illustrates your current business assets and liabilities, these figures are very significant for lenders to assess your business loan application. If your liabilities significantly exceed your assets, you may have a hard time getting your business loan approved.

Profit & Loss Account Statement

The P&L account statement is a financial statement that summarises the costs, expenses, and revenues during a particular period. Lenders often check this statement for the past 2 years to get information about your business profit and your ability to repay the loan. It includes your revenue and subtracts costs of operating expenses, interest expenses, and tax expenses from it to calculate your profit.

Proof of Continuity

Your bank may issue proof of continuity for your business, which the lender may consider as valid proof of your business existence. Since lenders offer a business loan to operational businesses only with a few years of experience, they would like to see this proof of continuity certificate before approving your business loan application.

You may also show your sales tax certificate, establishment, ITR, or trade license to prove your business existence. These are some financial documents you need to show to the lender to apply for a business loan.

If you apply for a business loan from Clix Capital, ensure that these documents are ready to make your loan application process easier and faster. We offer unsecured business loans of upto ₹ 50 lakhs, which you can avail to cover any of your business-related expenses. If you provide your lender with all these necessary documents, the process of securing the loan will become streamlined both for you and the lender.

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December 30, 2022 Business Loan 1191

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About Author


Ritesh Sharma hails from Delhi and has spent the last 9+ years helping brands achieve their business objectives through paid, earned and owned channels of Digital Marketing across industries including Mobile OEMs, Fintech companies, SaaS providers and F&B.