Simple terms to do to get a loan, documents required to get a bank loan, small business loan program guidelines, to do to get a loan

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 Small and cottage industry entrepreneurs are generally afraid of going to banks. For this, these customers take loans from various private organizations or NGOs, where no documents are required. No collateral is even required.

Simple terms to do to get a loan, documents required to get a bank loan, small business loan program guidelines, to do to get a loan,

External and internal environment of modern banking system is very nice and organized. Due to this reason, the simple small and cottage industry entrepreneurs of the village feel hesitant to go to the bank branch for banking services.

Many of them think that getting a bank loan requires a lot of documents, mortgage of house or land, guarantor and many other things are required. Is it really so? What documents are actually required to get a loan from the bank and why are they required in this article.

Here is a fair idea of ​​where and how these documents can be found. Basically, various documents are required to get a loan from the bank for four reasons. These four reasons are-

1. Obligations of regulatory bodies

2. Verification of debt repayment capacity

3. For determination of loan amount and

4. To take legal action if necessary to recover the debt

First of all, the documents or certificates required according to the prevailing laws of the country include national identity card, business certificate or trade license, tax identification number or income tax certificate etc. According to the Election Commission Act, the National Identity Card is available from the Election Commission only after the age of 18 years as a Bangladeshi citizen. According to the City Corporation Ordinance-1983, trade license or business registration certificate is required for any type of legitimate business and independent profession.

Trading without a trade license is considered illegal and the regulatory body can punish it with fines at any time. Therefore, before starting the business, a trade license can be obtained by filling the form prescribed by the local city corporation, municipality or union council and depositing the required fee. Apart from this, Income Tax Identification Number or TIN certificate can be obtained from National Board of Revenue or NBR by applying online in case of taxable income.

Secondly, the bank asks for some necessary documents to determine whether a customer can repay the loan on time or how much the customer can repay. Since small entrepreneurs do not prepare financial statements of their business, it becomes a bit difficult for the banker to verify the customer's capacity. Then the bank collects the customer's sales and profit information to get an idea about the customer's business. Many times, bankers make these information from the accounts of small entrepreneurs or purchase and sale receipts. It is prepared by talking to the customer. So if the customer's business financial statement, income-expenditure statement and cash flow statement is not prepared by the customer before taking the loan, then the bank officials prepare it and take the customer's signature on it. Apart from this, if the customer has a loan in any other bank, the bank also collects his statement and installment payment information. Because, the past record of loan repayment gives an idea about the loan repayment mindset of the customer.

Thirdly, consumers often apply for loans without properly assessing their loan requirements. In such a situation, some information is needed to determine the loan amount based on Bangladesh Bank's policies and various loan measurement criteria. These data include the customer's investment plan, current inventory levels, debtor and creditor details including the amount owed, whether there is seasonality in the business, etc. are taken into consideration. While preparing the list of goods and debtors, the existence of canceled or overdue goods and customs arrears must also be taken into consideration. Such goods and duties are excluded from the dues account.

Fourth, bank loans mean the risk of non-payment. This risk can be created for two reasons. For example, many times the customer does not repay the loan despite being able to afford it.

Also due to business losses, you can lose the ability to repay the loan. In such situations, debt collection is attempted by placing the borrower under supervision. Failing that, legal action is taken. Certain documents are required to take legal action. Because of this, the bank executes some legal documents before giving the loan.

Meanwhile, various banks of the country provide unsecured loans of up to one crore taka to small entrepreneurs. In this case, two guarantors are required. So the borrower has to fix the guarantor as per the bank policy.

So don't hesitate to open a business account in any bank branch near you and keep doing transactions, then apply for a loan after six months or a year. If necessary, take the assistance of the bank officer. Grow your business with loans and boost the economic activity of the country.

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