How does one get an Unsecured Business Loan for self-employed individuals?

Running a business is certainly not an easy task and fund management is the need of the hour. Ensure a regular financial flow to keep the business running smoothly through innovations and expansions. Taking a Business Loan helps when you are in a tough spot financially. For instance, if you own a small business but don’t have enough funds to purchase equipment, you can take a Business Loan to fund appliances, shop, consolidate debt, expand business, upgrade machines or spend on other emergencies etc.

Read on to know more.

Process of Business Loan application:

Self-employed individuals don't need to provide any security or collateral while applying for a Business Loan. The final Loan amount is decided based on the type of business and relationship with ICICI Bank. You can avail a collateral-free Loan of up to Rs 50 lakh at an interest rate starting from 15% per annum.

Follow the three steps to apply:

Step 1: Check the Business Loan eligibility criteria as below:

• Minimum age of 28 years and maximum of 65 years
• Current business should be active for at least 3 years and for doctors a minimum of 3 years of service
• Minimum profit after tax should be Rs 3 lakh for self-employed individuals.

Step 2: Loan application through ICICI Bank’s iMobile Pay app or Internet Banking. Select the amount you need and the Loan tenure.

Step 3: Post approval of the loan application, The Bank credits the amount into your Current Account.

If you have an existing Car Loan, Home Loan or a Current Account in any bank*, availing an ICICI Bank Business Loan becomes easier. The Bank offers instant Loan for self-employed professionals (Doctors, CA, Company Secretaries, Architects) and non-professionals (Traders, Retailers, Manufacturers, Vendors, Distributors & Wholesalers). 

In case you require additional monetary support, apply for a top-up on your Business Loan. Your existing Business Loans from other banks can also be transferred to ICICI Bank at a low interest rate. You can avail all other features offered by ICICI Bank after transferring the Loan.

Documents required:

● Duly filled Application Form along with passport size photographs

● ID Proofs: Aadhaar Card, Passport, PAN Card, Driving Licence, Voter ID Card, etc.

● Address Proofs: Aadhaar Card, Ration Card, Voter ID Card, Utility Bills (Phone Bill, Electricity Bill, etc.), PAN Card, etc.

● Income Proofs: Certified Profit and Loss Statements and ITR of last two years

● All other documents needed by the Bank.

The following documents are needed for income verification:

• Bank Statement

• GST Statement

• Audited Financials 

• ITR.

 KYC documents for entities.

Sole Proprietorship Firms:

In addition to the KYC documents including the PAN of the proprietor, submit any of the below two documents:

1) Registration Certificate

2) Certificate/Licence issued by the municipal authorities under Shop and Establishment Act

3) Sales and Income Tax Returns

4) CST/VAT/GST Certificate (provisional/final)

5) Certificate/Registration document issued by Sales Tax/Service Tax/Professional Tax authorities

6) IEC (Importer Exporter Code) issued to the proprietary concern by the office of DGFT/Licence/Certificate of Practice issued in the name of the proprietary concern by any professional body incorporated under a statute

7) Complete Income Tax Return (not just the acknowledgment) in the name of the Sole Proprietor reflecting the firm's income, duly authenticated/acknowledged by the Income Tax authorities

8) Utility bills such as electricity, water and landline telephone bills (not older than two months).

Partnership Firms:

1) Copy of Registration Certificate if the firm is registered

2) Copy of PAN of the Partnership firm

3) Copy of Partnership Deed

4) Power of Attorney granted to a partner of an employee of the firm to transact business on its behalf

5) Copies of Proof of Identity and Proof of Address along with PAN of the main partners and persons holding the PoA

6) Copy of Proof of Legal Name, telephone number of the firm and partners.

Limited Liability Partnership (LLP)

1) Copy of the Certificate of Incorporation (mentioning LLPIN) document and DPIN of the designated partners

2) Copy of the LLP agreement

3) Copy of PAN of LLP

4) Copies of Proof of Identity and Proof of Address along with PAN of the designated partners and persons holding the PoA

5) Copy of the Resolution to open an Account and list of authorised person/s with the specimen signatures to operate the Account, duly attested by the designated partners.

Companies:

1) Copy of Certificate of Incorporation (mentioning CIN)

2) Copy of Memorandum & Articles of Association

3) Copy of PAN of the Company

4) Resolution of the Board of Directors to open an Account and list of officials authorised to operate the Account

5) Identification of authorised signatories should be based on photographs and signature cards duly attested by the company

6) Copies of Proof of Identity and Proof of Address along with PAN Card of managers and officers of employees holding Power of Attorney to transact business on its behalf

7) List of Directors along with DIN and copy of Form 32 (if directors are different from AOA)

8) Certified true copy of Certificate of Commencement of Business (Public Limited

Company)

9) Copy of proof of the name of the company, principal place of business, mailing address of the company, telephone/fax number. (Telephone bill not older than two months).

Trusts/Association/Club/Society:

1) Certificate of Registration, if registered

2) Copy of PAN of Trust/Association/Club/Society

3) Power of Attorney granted to transact business on its behalf, if any

4) Any document listing the names and addresses of the trustees, sellers, beneficiaries and those holding Power of Attorney and other key officials involved in the day-to-day management of the trust to the satisfaction of the Bank

5) Resolution of the managing body of the foundation

6) Declaration of Trust/Bylaw of society/Bylaw of association/Bylaw of club

7) Attach the Proof of name and address of the founder, manager/director and the

beneficiaries, telephone/fax number, telephone bill and utility bill. (bills not older than two months).

HUF:

1) Copy of PAN of the HUF

2) Copy of Identity and Address proof of the Kartha.

Final note:

If the business has been running profitably for the past 3 years, a self-employed individual can avail a Business Loan at a lower interest rate. You need at least one-year’s liability relationship, i.e., Savings/Current Account or have an asset relationship, i.e., Loan (closed or active) in the past three years along with a good repayment track record. Hopefully, you now have answers to all the questions for availing a Business Loan. So, go ahead and apply now!