Why must I submit a colour copy of my PAN when I apply for an SME loan?


When you’re applying for an SME loan, your PAN card is one of the required supporting documents you need to submit along with your loan application for the lender to be able to assess your credit requirements.

As credit experts, the CreditEnable team has seen it all – from customers sending low-resolution digital copies of their documents to only sending half of one document and half of another! A lender (and CreditEnable’s credit team) can only begin assessing your loan eligibility once they have all your required documentation. The longer you take to submit your documents, the longer it will take to get your SME loan.

So, let’s talk about PAN cards- are they required, and why do you need to share them with your lender when you apply for an SME loan.

What is a PAN card?

Your Permanent Account Number, also known as PAN, is a ten-digit unique alphanumeric identification number issued by the Income Tax Department. Every individual and corporate taxpayer doing business in India is required to have a PAN. When you apply for an SME loan, you need to provide a colour copy of your PAN card to your lender.

Which type of businesses need a PAN card to do business in India?

The following types of entities need a business PAN card to do business in India:

  1. Company
  2. Partnership firm
  3. Association of persons
  4. Limited Liability Partnership (LLP)
  5. Body of Individuals
  6. Trust
  7. Incorporation
  8. Limited company
  9. Private firm
  10. Association
  11. Foreign institutional investor
  12. Hedge fund

Remember, if you are an individual or a corporation (whether you are an Indian or a foreign entity) doing business in India, you must have a PAN card.

Learn more about business PAN cards.

Why is a colour copy of my PAN required when I apply for an SME loan?

When you apply for an SME loan, you need to submit numerous supporting documents along with your loan application. Your individual and business PAN cards are on that list.

While you can submit black and white copies of all your other documentation, lenders will only accept colour copies of your PAN cards. This is because, from a security point of view, there are features on the colour PAN card which the lenders use to verify the authenticity of your ID. The lender cannot verify your ID as authentic using a black-and-white copy, and they, therefore, cannot process your SME loan application any further.

So, to help the lender process and assess your SME loan request faster, make sure to submit a colour copy of your PAN card when you apply for a loan.

Apply for an SME loan now.

Why is my PAN required when I apply for an SME loan?

According to the latest government regulations, your PAN has to be linked to your Aadhaar, creating a unified identity for you from a tax perspective. 

In addition to being linked to your Aadhaar, it is also linked to your bank accounts and your tax profile. Using your PAN information, a credit bureau, like CIBIL TransUnion or Experian, accesses your financial history to generate your credit report. Therefore, your PAN is also linked to your credit bureau profile. 

When you apply for an SME loan, lenders use your bureau report, in addition to other factors, including your financial history, business sector, type of business, etc., to determine how creditworthy an SME you are.

If you’re a young business or you’re still building a credit history, lenders will also check your individual bureau report to determine your creditworthiness.

So, your PAN is crucial in determining your personal and business creditworthiness.


Chances are, you already have a PAN card for yourself and your business (if your business falls into one of the categories mentioned above). When you’re applying for an SME loan, all you need to do is remember to submit a colour copy of your PAN cards so that the lender can easily verify your information and access your credit report.

If you apply for an SME loan using CreditEnable’s technology platform, our credit experts guide you through the loan underwriting process so that you get your SME loan quick and on favourable terms. We’re committed to making the SME loan process easier and educating our customers about small details like a colour copy of a document so that you can get the business funds you need quickly.

There are other things you can do to ensure your business is eligible for an SME loan. Find out what they are here.

Start your loan application with CreditEnable now.

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