What documents can I use as Proof of Business when I apply for an SME loan?

proof of business

If you’ve never applied for a business loan before, you may have some questions about the process – how it works, do you qualify, how long will it take, what is a credit score, what documents will you need, which lender do you apply with, among others.

Here, we’re addressing your question about documents – what supporting loan documents can you use to establish your proof of business?

Why is Proof of Business needed when I apply for an SME loan?

When you apply for an SME loan with a formal lender, whether a digital lender or a legacy bank, they will conduct a thorough assessment of you and your business. This helps the lender assess the risk involved in lending to you and whether you will be able to run your day-to-day business operations and keep up with your monthly EMI obligations if they were to lend to you.

Reviewing your Proof of Business documents does four things:

  1. It lets the lender know you are a responsible entrepreneur who runs their business according to the law.
  2. It helps them verify your financial and tax history, ensuring you pay all your taxes on time and follow the appropriate tax guidelines for your employees and buyers as well.
  3. It helps them determine your business vintage (how long your business has been registered and operational). The longer you’ve been registered more creditworthy your business becomes to the lender.
  4. It allows the lender to verify critical information about your business, like the name of the company, your business constitution, the address of your business, etc.

What documents can I use to establish Proof of Business?

Here are some of the most commonly used and accepted legal documents that you can use to establish your Proof of Business:

If you are a GST-registered business, you can give the lender a copy of your GST Certificate.

If you are not registered under GST, you can use the following documents:

  1. Shop and Establishment Certificate, also known as a Gumasta Certificate in some states across India.
  2. Renewed industry trade licenses, like FSSAI license, factory license, drug license, etc. issued by a municipal, state, or central authority.
  3. Importer – Exporter Code (IEC)
  4. Udhyam (MSME) Certificate is also accepted if you have a Current Account. If you want to submit this document, you will also have to submit proof of your Current Account opening date.

CreditEnable Tip:
Most lenders, including CreditEnable’s lender partners, do not accept hand-written trade licenses. In this case, you should apply for an Udhyam (MSME) registration instead.

Want to get your GST certificate? Here are the steps to follow.

What are the benefits of being a registered business?

When you register your business, you create a legal entity this is separate from yourself. Here are some of the benefits of registering your business:

  1. A registered business can get an SME loan with a formal lender.
  2. Your business is now a legal entity that will be treated separately from your personal identity. Therefore, some of the things you can now do are buy/rent property in its name, initiate legal action in its name, you are not personally financially liable for it, etc.
  3. Only registered businesses can operate Current Accounts or Cash/Credit Accounts as you need to provide Proof of Business to the lender to open them. These accounts come with certain features specially designed to benefit businesses, and therefore your business would be saving a lot of money if you had one.

Why do I need a current account for my business?


You can use many municipal, state, or central legal documents to establish your Proof of Business. In addition to this document, the lender will also ask you to submit your personal and business KYC documents, a Proof of Business Address document, your bank account statements for the last 12-months, and where applicable, your audited financials, ITRs, GSTR-3Bs, etc.

All these documents help the lenders check your business vintage and eligibility for the SME loan, assess your business, and make their lending decision. To speed up the underwriting process, many lenders, including all CreditEnable lender partners, now accept digital copies of the documents. This makes it more convenient for the borrower to submit the paperwork and allows the lender to feed the data into their proprietary assessment algorithms that aid their lending decision. 

Business Loans. Enabled Simply.