KYC Documents – What You Have and What is Needed

KYC Documents – What You Have and What is Needed

Getting a business loan in India requires a lot of meticulous planning on a small business owner’s part. One aspect of this planning is getting the KYC documents in order. Here we have compiled a list of documents that you generally need when applying for a business loan.

A Checklist of Documents Required to Apply for Business Loans

  • For Identity Proof: Driving License / PAN Card / Passport / Voters ID Card
  • For Address Proof: Utility Bills (telephone, electricity, broadband) / Passport / Trade License / Rental Agreement / GST Certificate
  • For Financial Checks:Business related bank statements(generally, of preceding 2 years)
  • For Tax Compliance: Latest ITR (you may also be asked for the computation of Balance Sheet, income & Profit & Loss account for the last 2 years)
  • A Proof of Continuation
  • Other mandatory documents include, Sole Proprietorship Declaration, Certified Copy of Memorandum & Articles of Association
  • Audited financials for the last 3 years

Furthermore, the Business Loan Application Form is a mandatory document which is to be filled when applying for a loan with a bank.
However, if you apply for a loan with a non-banking financial company such as Lendingkart Finance, you can get a business loan approval without having to submit copies upon copies of your KYC documents. Simply register on the Lendingkart website or use the Lendingkart app on your smartphone to submit your business loan application.

The process offered by Lendingkart Finance is completely online, where you are required to submit minimal documentation.For example, when applying for a Lendingkart business loan, simply upload the following digital copies –

  • Proof of Registration
  • Any one of photo KYC documents
  • ITR Statement
  • Bank and GST statements

A Lendingkart business loan allows you to maintain the cash flow, upgrade business facilities and equipment and invest in business expansion. Lendingkart offers customised interest rates and flexible EMI options to make it easy for you to grow your MSME.

Visit us at www.lendingkart.com to know more.

Lendingkart Instant Business Loans App – Loans Under 5 Minutes

Lendingkart Instant Business Loans

 

Business loans for startups are a difficult thing to achieve. For existing businesses, the story is different. A business can apply for a working capital loan based on its age and turnover. Banks have been the usual go-to option for people and businesses for getting financial aid. Alternative digital lenders or NBFCs have become the better choice for businesses now. Lendingkart, as a digital lender, offers short term working capital loans to existing small businesses. One can apply for a business loan through the website or the Lendingkart Instant Business Loans app on Google Playstore.

 

Requirements for Applying for a Business Loan on Lendingkart Instant Business Loans App

One must bear in mind that this app is for running businesses. The following borrowers can apply for a working capital loan –

  1. Businesses more than 3 months old
  2. Business that are seeking a supplementary short-term loan for managing sudden emergencies

The business should have an annual turnover of at least INR 3 lakhs.

 

How to Apply for a Business Loan through Lendingkart Instant Business Loans App

The app available on Google Playstore is simple to understand. You can use this link to visit the website and download the app. Or you can just search for ‘Lendingkart’ on Playstore to get the following results.

Lendingkart Instant Business Loans in Playstore Search on phone

Use the highlighted result above to get to the following screen.

Playstore Page - Install Lendingkart Instant Business Loans

Tap on ‘Install’ to get started.

The app will access your Google account to verify your identity. It will require access to Photos/Media/Files, SMS, Contacts and Phone. Camera, WIFI and internet data access for video proof.

Open the application from the Playstore page or by selecting the LK icon in the app drawer.

Lendingkart Instant Business Loans Installed

Basic Information

In the first screen, tap on ‘Get Started’ and enter your registered mobile number in the following screen. You will receive an OTP through SMS to verify your phone number.

Lendingkart Instant Business Loans Getting Started and OTP Verification

Please note the following three details required to apply for a loan successfully.

  1. Details of your business (Type, Date of establishment, turnover, industry etc.)
  2. PAN Number
  3. Working bank account (use the one meant for your business)

In the ‘About Your Business’ screen, enter the details as asked in the following fields.
Lendingkart Instant Business Loans About your Business

For Registration type, you can choose any one of the following options.

  1. Proprietorship
  2. Partnership
  3. Ltd.
  4. One-person company
  5. LLP
  6. Limited company
  7. Not registered

Lendingkart Instant Business Loans - Registration Types

In ‘How old is your business’, 6 options are available. From ‘Planning to start’ to ‘More than 5 years’.

You can choose the industry type of your company from the following list.

Lendingkart Instant Business Loans - Industry type

Choose the annual turnover of your company, the acting owner of the company and the PIN code of the business address. Enter the details carefully as you cannot edit these later. Click ‘Confirm’.

Lendingkart Instant Business Loans - Details

If your business doesn’t meet the basic eligibility criteria of being 3 months’ old or having 3 lakhs annual turnover, you might encounter the following screen.

Lendingkart Instant Business Loans - Ineligibility Business Vintage TO

Credit Eligibility Information

If the application proceeds to the PAN details screen, enter the PAN details of the owner. In case there are multiple owners, you must enter the name and PAN numbers of multiple people.

Lendingkart Instant Business Loans - PAN Details
Press the ‘Confirm’ button and please wait till the application verifies your PAN details. This process hardly takes any time. The following screen has a progress bar.

Lendingkart Instant Business Loans - PAN verification

Based on your credit history and credit score, you might encounter either of the following screens.
Lendingkart Instant Business Loans - Post PAN Verification

Pre-approved Loan Offer and Bank Information

In case you reach the ‘Pre-approved Loan Offer’ page, you can view details of the loan amount and terms and conditions applicable. You can also choose the option of ‘Proceed for Higher Loan’. In that case, it will be a longer process that we will cover in another article.

Lendingkart Instant Business Loans - Pre-approved Loan details

After agreeing to the ‘Pre-approved Loan Offer’, your loan processing will be initiated.
Post that, you will come across the following screens. Use the ‘OK. Let’s Complete’ button.

Lendingkart Instant Business Loans - Post offer acceptance

Add a bank account where you need the loan, along with the current business and home address.

Lendingkart Instant Business Loans - Adding Bank Account and Address

 

References and Personal Identity Information

Thereafter, add two references of people you know and trust. You can pick them from your Contacts list if you want.

Lendingkart Instant Business Loans - Adding References
Lastly, you need to record a 5 second video of yourself holding your PAN Card. Try to keep yourself in the outline of the window.

Lendingkart Instant Business Loans - Selfie video

Lendingkart Instant Business Loan App Process Completion

From here, you can go to the ‘Dashboard’ to view the details of your application.
In case your company is a ‘Pvt. Ltd.’, you must complete an online application form. ‘OK. Go to Application Form’.

Lendingkart Instant Business Loans - Online Application for Pvt. Ltd.

Important Points regarding Lendingkart Instant Business Loans App

There are a few things to keep in mind when using the application on your phone. Please ensure –

  1. Your phone camera and mic work
  2. The phone has internet access, through WIFI or through 3G/4G
  3. The bank account you provided has business transactions
  4. Your email address works, and you can access your emails
  5. You use your primary mobile number for registration
  6. You follow the instructions on the screens perfectly

While using the Lendingkart Instant Business Loans app, it helps if you –

  1. Use a current account as your bank account
  2. Provide as detailed information about owners as possible
  3. Provide detailed contact addresses to receive the agreement
  4. Connect your bank account (it is much faster that way and secure as well!)

Need more help while applying through the app? Stuck in the middle of the process? You can always reach the team at this number – 07949066222.

Working Capital Management for Small Business Owners

Working Capital Management for Small Business Owners

Any business can have different sources of income and efficient management of the same can work wonders in the running of the business. While startup capital and fixed assets are typically long term, for the day-to-day running of any business, an efficient cash flow structure is necessary. In the light of the same, working capital becomes quite crucial for small business owners.

What is Working Capital Management all about

Working capital management is the relationship between a company’s short term assets and short term liabilities. In simpler terms, it is the way in which a company handles its income generation and expenses. For example, if your company deals in a lot of paperwork and you need prints of documents every second hour, that is an active expense happening almost every day. Getting an office printer would make the expenses considerably less, over the course of time.

Efficient working capital management ensures that any company can run smoothly while being able to repay maturing short-term debt and expenses that might rise in the near future. In working capital management, the most basic tasks revolve around managing inventories, accounts receivable and payable and cash. Inventories in our example can be ink cartridges, blank paper that can be used in the future. While your sales on credit can be a part of accounts receivable, if the printer was bought through a loan, the EMI would be part of the accounts payable. Cash is pretty self-explanatory and is basically used for expenses that can’t happen on credit or are quite diminutive.

Ways in which Working Capital is used

The importance of cash for companies can never be expressed in enough words. Cash in hand is majorly used for three purposes, namely – Speculation, Precaution and Transaction. All the three are quite pivotal in deciding the growth of a small business.

Speculation

Speculation is the scenario where having appropriate cash in hand can aid in taking benefits of special opportunities related to purchase. Suppose a small business is dealing in fireworks. They would normally have stock left from the past year Diwali in their inventory. Let’s presume the business is paying a monthly fee of INR 20000 for storing its stock in a warehouse. The annual fees come to INR 2.4 lakhs. During September, the business gets an offer to receive an amount of new stock (equal to the old stock) at a seasonal discounted price of INR 1.8 lakhs. Here, the cost of the new inventory is less than the carrying costs of the old stock. But it is actually more profitable for the business since the old stock has a depleted value now along with the carrying cost of 2.4 lakhs. The business will do much better if it purchases the new stock at a discount and disposes the old inventory at a discount to small retailers. That way, the business will be ready for the festive months ahead with a new stock that has a much higher chance of being sold out fast.

Precaution

Precaution is when a business holds cash in hand to safeguard against unforeseen situations. Let’s consider our old example of the small business selling fireworks. Speculating on a booming sale in the festive months ahead, the business had bought in new stock on credit, hoping to settle the dues after the sales are done. But due to some state-wide problems, people didn’t celebrate as much and thus, didn’t buy much fireworks. But the business still has to honor its promise of repaying the dues, so it uses the cash in hand to do that.

Transaction

Transaction is perhaps the simplest of the reasons why small businesses should have access to cash in hand. Every small item needed in a day-to-day operation of a business can’t be settled through online transactions. Cash in hand is required for sundry purchases that are then added up at the month end for the expenses.

Tips to Improve upon Aspects of Working Capital

Accounts receivables, cash in hand, inventories, marketable securities and prepayments are current assets that will become cash within 12 months and likewise, account payables, wages to be paid and unearned revenues are current liabilities that need to be settled within 12 months of time. Good working capital management involves keeping the current assets consistently higher than the current liabilities to avoid financial complications or operational problems. Here are some small tips that can help you manage your working capital in your company more effectively. Keeping an eye on these can allow your small business to prosper –

1. Take advantage of float – Float or floating capital is basically the difference between book balance and bank balance. Let’s suppose you have dues of INR 3 lakhs to settle by the 31st of October. However, only INR 1 lakh is supposed to be paid by the 5th of October. Considering that you have INR 3 lakhs cash in hand by September 27, you could use INR 2 lakhs as a short-term deposit if you have no other assured profitable short-term business venture that can pay within a month. The return could be less than INR 1000, but it’s better than nothing. If you like investments, you can check the market and invest in equities for a short term for getting better returns, but this is a riskier approach

2. JIT Inventory – Just-In-Time inventory allows a business to cut down on costs involved in storing stock. Materials are purchased and received in time for the production line or for sales. Though this is quite difficult to achieve, if your relationship with the supplier is good, you can manage this effectively

3. Sales on Credit – Here, your sales play a crucial role. The goal is to shorten the amount of time your customers can take to pay their bills. You could offer a period of 30 days till their bill is due and offer a promotion of 3% discount if the same bill is cleared in maybe, 10 days or less. This allows you to sell more in a short time and pushes your customers to pay earlier to get a discount of 3%

4. Alternative Funding – This method can include availing working capital from banks, NBFCs, asset-based lenders, crowdfunding. In most cases, a genuine business idea, long term efficiency and good revenue generation can get you access to alternative funding rather quickly

5. Timely payments to suppliers – This is the easiest and simplest rule to follow. It goes without saying that if you pay your suppliers their dues on time, you can negotiate better deals and get discounts on your purchases

6. Group Purchase – As a small business, you might not always have access to funds to buy stock at a discounted quantity, or you might not have the available storage to accommodate a bulk of material that you get at a discount. It is always a good idea to look for other small businesses in the state or region who do the same trade as you and pool in resources to get the stock from your supplier. That way, you don’t have to spend a lot and still get to avail the discount

7. Learn the benefits of e-procurement – If you are into electronics, electrical equipment, garments, gift items and the like, you can look into sites like mytradebox.com where you could find interesting items with heavy discounts on bulk orders. These can help you source items quickly at very affordable rates

Working Capital Management and your Small Business

Small businesses aren’t much different from regular, established business giants. They just have a smaller market footprint. While larger businesses have to deal with multiple rules and regulations that they have set for themselves, as a small business owner, you will be much more flexible in making changes to the processes that are followed in your business. Taking working capital management seriously and handling the details through which your cash flows are dealt will definitely make your business a more profitable one. This, combined with social media, ecommerce and data science can work wonders for your small business. But those are topics that will have their own articles. Follow our Lendingkart blog to be regularly updated about the same.

Small Business Loans – The Working Capital Angle

Ever since I started off in a retail lending team at HDFC Bank and even now, as a decision-maker in one of the leading fintech lenders of the nation, I have always been asked by clients about the kind of business loan that would be the best for every situation. Simply put, there is no single loan that comes with a ‘one-size-fits-all’ feature. But when it comes to which business loan can be used in many situations, if not all, I could lead you through my insights and let you decide for yourself why working capital loans offer the best advantages. The current market scenario is rife with financial options to help in the smooth running of any business, small or big. These options could include multiple banks and NBFCs or even new age fintech firms like us, the Lendingkart Group. Though the sources are a dime a dozen, availing business finance through official channels is always bound by regulations and people resort to borrowing from friends and family or the local moneylender. Continue reading

Small Business Loans – Why and Why Not

When it comes to financials that concern your organization’s growth and prosperity, you would never want to take a chance, would you? Additionally, when it comes to your personal life, you’d always want a steady flow of income and a safety net to secure your and your family’s future as well. This brings us to a rather peculiar scenario of growth prospects. Addressing the elephant in the room, we would need to look at the importance of business loans and the ways in which one should be using them best. Business loans, if taken at the right point of time can further an organization’s reach and scope in a broad manner. On the flipside, taking a business loan without having a plan for progress in mind can be more of a liability than an asset. So, what points should you focus on, as a small business owner, before going in for a working capital loan? There are a few key questions that you should ask yourself before you decide on a business loan – Continue reading