The evolution of the modern day technology is an encouraging factor for every business which has created the consequences for the dire requirement of different kinds of modern and advanced machinery and equipment for the growth and development by increasing the productivity to its optimum levels. This need for the new modern machinery and equipment which is necessary to enhance the capacity of production and service units of the businesses has created the demand for the requirement of equipment and machinery loans from lenders like banks and NBFCs.If you have recently started a small or medium-sized enterprise, you might be looking for new machines, better computers, advanced software, or hardware updates. So the obvious question comes that what are the documents required for machinery loan?
Required documents list for Machinery Loans:
The primary requirement of machinery loan documents are:
Proof of Identity:
Proof of identity of the business owner in form of Aadhaar card, pan card, voters’ identity card passport etc. If the business is a partnership firm or a limited liability partnership firm then these documents will be required for all the partners along with the pan card and partnership deed of the company.
In case of a private limited or a limited company these documents are required for all the directors along with the pan card of the company, memorandum of association (MOA), articles of association (AOA), letter of incorporation (LOI) and share holding pattern.
Proof of Business and Residential Addresses:
The proof of address of the proprietor or all the partners or directors of the business. The proof of address for machinery loan documents can be either passport or driving license or Aadhar card etc. along with the ownership proof of the residential address or business place in form of latest property tax receipt of the municipal corporation or municipality or panchayat under which the residential or business address is situated.
Latest colour photograph of the business owner or partners or the directors are also very much essential part of machinery loan documents.
KYC documents of all the directors or partners or owner of the business must be affixed with a duly filled KYC form might be requested as per the policies of the lending bank or NBFC.
Proof of Business Registration:
The proof of business registration in form of trade licences or certificate of enlistment under which municipal corporation or municipality or panchayat the business is enlisted and professional tax certificate from the state government along with the Udyam Aadhaar registration Certificate are very much required as machinery loan documents to establish the vintage of the business.
Proof of Income:
The proof of income includes the bank statements of all the bank accounts of the past six months or one year of business as machinery loan documents for which the machinery loan is taken.
Apart from bank statements the Income Tax Returns with all financials and audit report certified by the qualified chartered accountant are also very much essential as machinery loan documents. Moreover the GST Registration Certificate along with GST returns for the last one year is also asked as the machinery loan documents.
Proof of Existing Facilities:
The sanction letters and the loan account statements or the statements of the loan accounts of all the lending banks and NBFCs are also very much required to calculate the financial eligibility of the entity.
Original Quotation of the Machinery:
The original and valid quotation price of the machinery that is to be purchased by using machinery loan finance is also the major part of the documents.
In general these are the considered to be the standard machinery loan documents that are asked by the lending institutions like banks and NBFCs for the application for a machinery loan provided if there are no other complications like unavailability of the documents due to compliance issues of the financial documents or lack of identity and address proofs or business registration proofs.
Read more:
- How to get business loan?
- Cash Credit loan eligibility
