What to prepare before you ask an Indian bank for a loan

Turning up at a bank without the file assembled costs you two things: time, and the benefit of the doubt. Both are hard to win back.

This is the full set an Indian bank will ask for on a business loan, grouped the way a credit file is actually built. Nothing here is unusual — but assembled in advance it changes the conversation from an interrogation into an assessment.

A. Who you are — KYC and constitution

• Certificate of incorporation, MOA and AOA for a company; partnership deed for a firm; Udyam registration where applicable
• PAN of the entity and of every promoter, director or partner
• Aadhaar and address proof for each promoter
• Board resolution authorising the borrowing and naming who may sign
• Shareholding pattern and a list of group or associate concerns
• GST registration certificate; factory licence, trade licence, pollution clearance and similar, as your line of business requires

B. What you have done — financials

• Audited financial statements for three years — balance sheet, profit and loss, schedules, notes, and the auditor's report in full. Not just the two summary pages.
• Provisional figures for the current year, up to the most recent completed month
• Income tax returns for three years with computation and acknowledgement
• GST returns for twelve months — GSTR-3B and GSTR-1
• Bank statements for twelve months for every account the business operates, not only the one you like
• Existing loan sanction letters and repayment schedules, with a statement of account for each

C. What you intend to do — the proposal

CMA data

Credit Monitoring Arrangement data is the standard format Indian banks use to assess working capital and term loans. It runs to several linked statements — past and projected balance sheets, operating statements, a comparative analysis of current assets and liabilities, a fund flow, and the working capital assessment itself.

Two things matter more than the format. First, the projections must be defensible: a jump from ₹25 crore to ₹60 crore next year needs an order book, a new line, or a customer contract behind it. Second, the CMA must reconcile exactly to your audited past figures. Analysts check the historical columns against the balance sheet before they look at anything else, and a mismatch there ends the credibility of everything to the right of it.

Project report

For a term loan, on top of the CMA: what the money buys, quotations for the machinery or civil work, the implementation schedule, how the capacity translates into sales, what your own contribution is and where it is coming from, and a repayment schedule you can actually meet.

Working capital calculation

For a cash credit limit, the bank assesses your requirement from the operating cycle — how long money stays in stock and receivables before it comes back. Bring your own computation. Arriving without one means accepting theirs.

D. What secures it — security documents

• Title deeds for immovable property offered, with an encumbrance certificate and, usually, a lawyer's search report
• Valuation report from a valuer on the bank's panel
• List of plant and machinery with invoices and dates of purchase
• Insurance policies on the assets charged, with the bank noted as loss payee
• Personal net worth statements for guarantors, with supporting documents
• CERSAI and MCA charge search for anything already charged

Where you cannot offer collateral, ask whether the facility can be covered under CGTMSE. The guarantee ceiling was raised to ₹10 crore for guarantees approved from 1 April 2025, with coverage between 75% and 85% of the default depending on category — higher for women entrepreneurs. Many branch officials do not raise it unless you do.

E. Who you are to the system — credit standing

• CIBIL or other bureau report for the entity and for every promoter — pull these yourself first
• Explanation, in writing, for any overdue, settled or written-off entry
• Confirmation that no promoter appears on a wilful defaulter or caution list

A personal bureau score below 700 on any promoter will slow a business file down regardless of how the company is performing. Find out before the bank does, and fix what can be fixed — often it is a forgotten credit card or a co-signed loan nobody serviced.

The order to do it in

1. Pull your own bureau reports and twelve months of bank statements. Read them.
2. Reconcile GST, ITR and audited accounts. Close the gaps or be able to explain them.
3. Assemble KYC and constitution documents into one folder.
4. Prepare CMA data and, for a term loan, the project report.
5. Get valuation and title work started early — it is the step that always runs late.
6. Only then approach the bank.

A complete file does not guarantee sanction. But an incomplete one guarantees delay, and in lending, delay is usually how a yes turns into a no.