KYC is one of the most important documentation to procure small business loans. The applicants are required to submit identity proof as well as residential proof. Certain documents such as passports and voter identity cards act as both identity and residential proofs. Aadhaar card is another addition to the KYC list of documents. This means that you can use Aadhaar card a standalone document to apply for loans.
What is Aadhaar?
Aadhaar is a 12-digit unique identification number issued by the Unique Identification Authority of India (UDAI). It captures an individual’s demographic (name, birth date, gender, and address) and biometric information (iris scan and fingerprints). While there are a host of other identity and address documents like PAN card, driving license, electricity bill, etc. that individuals can furnish as proofs, none of them captures information in detail as Aadhaar card. By submitting Aadhaar number in banks, financial institutions, telecom companies, real estate companies, government schemes and anywhere else where identification is mandatory, the individual does not have to provide any other id or address proof.
It is mandatory for the Indian citizens to link their Aadhaar number with all bank accounts (personal and business), mobile numbers, ration card, PAN, voter identity card and even LPG connections.
The relevance of Aadhaar in Business Loans
Aadhaar acts a standalone KYC document for a business loan for SME. Since Aadhaar contains all information that business loan providers including banks and digital lending platforms seek during verification of the applicant, the processing of loan application becomes quicker. The lending institutions do not have to spend much time doing a background check on your profile.
Online lending platforms such as FlexiLoans approve and disburse quick business loans in as less as 48 hours. You can upload the Aadhaar and other supporting documents online, post which FlexiLoans verifies your application using innovative technology and a mix of algorithms. If you submit Aadhaar number as proof, the verification process is even faster, and the loan amount can be credited to your bank account within no time.
Given the benefits that Aadhaar offers in securing small business loans, it is advisable to apply for Aadhaar card now. And, if you already do have, then make sure it is linked to your bank account, mobile numbers and other documents so that there is no delay in availing quick business loans!