Are you a sole proprietor looking to expand your business and need funding quickly? An unsecured business loan might be the right choice for you. But before approaching a bank or NBFC, it’s crucial to have the correct documents ready to improve your chances of quick loan approval.
In this blog, we’ll walk you through the complete list of documents required to apply for an unsecured business loan for proprietorship companies in India.
What is an Unsecured Business Loan?
An unsecured business loan is a type of loan that does not require any collateral or security. These loans are sanctioned based on your creditworthiness, business performance, and banking history.
Banks and NBFCs offer unsecured loans to proprietors who can show stable income, healthy financials, and valid documentation.
Documents Required for Unsecured Business Loans (Proprietorship Firms)
1. KYC Documents
The first and most basic requirement is your Know Your Customer (KYC) documents:
- PAN Card (Permanent Account Number)
- Aadhaar Card (as identity and address proof)
2. Business Registration Documents
You must prove your business exists and is legally recognized. Accepted registrations include:
- GST Certificate
- MSME (Udyam) Registration
- Shop and Establishment License
- Pharma License (for pharmacies)
- Medical License or Labour License (if applicable to your industry)
3. Bank Statements
Lenders assess your cash flow and income patterns through your:
- Last 6 to 12 months of business bank account statements
Make sure you maintain a healthy average balance and avoid frequent overdrafts or cheque bounces.
4. Income Tax Returns (ITR)
To verify your income and business turnover:
- 1 to 3 years of ITRs are usually required
- It helps lenders assess your financial stability and repayment capacity
Why These Documents Matter
Each of these documents serves a key purpose:
- KYC proves your identity and legitimacy
- Business Registration shows your business is operational and compliant
- Bank Statements provide insight into your revenue and financial health
- ITRs help assess your income stability and repayment capacity
Having all these documents updated and organized increases your chances of faster approval and better loan terms.
💼 Need Help with the Loan Process?
At Shivafinz, we specialize in helping business owners and entrepreneurs secure the right loan products. Whether you’re applying for a secured or unsecured business loan, our experts guide you through eligibility checks, document preparation, and lender matching.
🔑 Final Thoughts
Documentation is the backbone of your business loan application. If you’re a proprietor applying for an unsecured business loan, make sure your paperwork is in order before submitting your application. It can significantly reduce delays and increase your chances of approval.
👉 For more expert tips and loan guidance, follow Shivafinz on Instagram, YouTube, and LinkedIn.