In modern times, an Aadhaar card has become a unique personal identification document for every individual, which is seamlessly integrated across various financial and identification services. For instance, in acquiring a business loan from a financial institution, the Aadhaar card plays a crucial role in minimizing the paperwork and performing the KYC verification. It is a satisfactory document for validating the identity and citizenship of the borrower.

Whether it is for starting a business or ensuring a regular influx of capital to deal with various operational costs, an entrepreneur can easily apply for a business loan with the help of an Aadhaar card, one of the critical business loan documents. One can easily acquire substantial funds for scaling their enterprise using an Aadhaar card and get pre-approved offers at an affordable business loan interest rate without pledging any collateral.

Read on to know more about the Aadhaar card helping take a business loan.

Over the years, the Aadhaar card has emerged as a crucial personal identification document for an individual while acquiring services from the public and the private sector. Issued by the government of India through the Unique Identification Authority of India (UIDAI), an Aadhaar card contains a unique 12-digit identification number that acts as a proof of identity and citizenship. Whether it is opening a bank account, availing subsidies, or obtaining monetary funds from financial institutions, an Aadhaar card is considered a vital part of the country’s economic system due to the following seamless integrations:

  • Aadhaar card has been linked to the Permanent Account Number (PAN) of an individual, which helps in filing ITR returns
  • Aadhaar card has been linked to an active mobile number of an individual for verification purposes using an OTP system
  • An aadhaar card has been linked to an individual’s bank accounts for transferring funds of government-led schemes and different loans. 
  • An Aadhaar card has been linked to Ration Card and Voter ID for availing subsidies and voting transparency during elections.

Benefits of Aadhaar card for a business loan

  • An aadhaar card is a single document that validates an individual’s age, name, photograph, and citizenship. Thus, it helps you speed up the loan approval and disbursal procedure in case of an unsecured business loan.
  • The alphanumeric code of an Aadhaar card is distinct for each individual. It is generated based on the individual’s demographic data (date of birth, residence address) and biometric data (fingerprints and iris scan). Due to linkage with the bank account, it helps in depositing the money without any fraudulent activities.  
  • A solid proof of identity, an Aadhaar card helps in online KYC verification of a person during background checks in case of a business loan. One can provide the UID number to the lender and get the loan approved instantly as the lender can validate the financial and personal details through it.
  • Another key benefit of an Aadhaar card is that it has reduced a lot of paperwork that used to be a part of loan processes. Earlier, the people were asked to submit various documents as there were many inconsistencies in the name and address of the borrower, which caused a lot of delays in loan approval. 
  • While the loan amount depends upon the eligibility and requirements of the borrower, the additional business loan documents you need to submit along with an Aadhaar card are bank statements, income documents, and proof of business existence.
  • With the introduction of the Aadhaar card, one can quickly obtain a business loan from financial institutions by filing the loan request online and the relevant documents. This has eliminated the unnecessary interference of middlemen who used to make extra money in the process.

How to apply for a Business loan with an Aadhaar card

  • Log on to the official website and navigate to the business/ SME loan tab. 
  • Enter the required loan amount for a business along with your nature of employment (salaried professional/ self-employed).
  • Next, enter an active mobile number for verification purposes.
  • Then, the candidate will be required to fill in the personal, professional, and bank details.
  • In the next step, the candidate should submit the necessary documents of proof. Make sure to upload the soft copy of the Aadhaar card for a smooth verification and quick approval process.
  • After previewing the details for a final time for any modifications or corrections, click on the ‘Submit button.
  • Upon successful submission, a loan acceptance message will be sent to the mobile number and a loan status tracking ID. 
  • Subsequently, the loan amount will be disbursed in your bank account linked with the Aadhaar card upon approval by the loan department.