What documents are required to apply for a machinery loan?

When applying for a machinery loan, the loan provider requires several key documents to evaluate eligibility. These documents help establish identity, assess repayment capacity and risk profile through financial data, charge the machinery, and execute the loan contract. Some of them are:

Document Purpose

Loan Application Form This form is typically the starting point, including personal, business, and loan-related details.

Identity and Address Proof Documents like Aadhaar or Passport generally verify the applicant's identity and residence.
Financial Statements These usually include 2-3 years of financial data, offering a relatively clear view of repayment capacity. They may be bank statements, Income Tax Returns, pay slips.

Provisional Statements Generally prepared for the current year, they provide relatively updated financial information.

Business Registration Proof Documents like Goods and Services Tax (GST) or incorporation certificates usually confirm the business’s legal existence.

Collateral Documents These generally establish the value of assets offered using title deeds or other proofs.

Existing Loan Statements These usually include repayment history, offering a relatively complete view of current obligations.

Note: The above-mentioned documents may vary from one bank or NBFCs (Non-banking Financial Companies) to another, depending upon policies.