Why Your Business Needs To Have A CRISIL SME Rating

As most of us are aware, a good credit record is of utmost importance, not just for individuals but for businesses too. It is imperative that all owners of a business maintain a good credit record and their SME too has a healthy credit rating.

But first, what’s a credit rating?

A Credit Rating is a measure of your company’s creditworthiness as given to your company by an authorized agency like CRISIL (formerly Credit Rating Information Services of India Limited) post submission of a rating request. CRISIL evaluates the documents submitted to them and interacts with the company management before giving the business a rating known called the CRISIL SME Rating. A CRISIL SME Rating makes the loan approval process easier while also giving your business credibility among other benefits. You can visit he CRISIL website and click on SME Rating or click here to learn more.

What is the application process to obtain a CRISIL SME Rating?

If you are like the umpteen number of business owners who delay applying for a credit rating because of the daunting paperwork, read on. We’re here to break down the process and help you with the paperwork involved.

Listed below are the documents required for a CRISIL SME Rating as per the official website:

Documents Required

  • Authority letter to sign CRISIL SME Rating application
  • Documents supporting registration (memorandum and articles of associations, partnership agreements, registration documents)
  • Documents supporting name change and legal structure
  • Brief write-up on history of the company
  • Documents supporting changes in capital (if applicable).
  • Copy of income tax, sales tax, excise and wealth tax returns, if filed
  • Copy of the audited accounts for the last three years (where accounts for the last year have not been audited, provisional accounts duly certified by a Chartered Accountant, along with two years audited accounts, are to be submitted)
  • Copy of insurance policies of assets
  • Certified net worth statements of all directors/ partners/proprietor
  • Copy of the project report containing a brief project profile, cost of project, source/means of finance in case of new project/expansion
  • Details of subsidy and tax concession available, if any
  • Quality certificates, export awards won, membership of any associations, etc
  • Any other information that would enable us to understand your business better

Information Required

  • Name of the applicant unit and address:

a. Address of Registered Office

b. Address of Factory

c. Address for Communication

d. Name, Designation and details (tel. no & mobile no) of contact person

(all the above addresses must include District, State, Pin Code, Telephone No./Fax No. and email address)

  • Constitution: Proprietorship/ Partnership/ Private Limited Co./ Limited Co./ Co-op. Society.
  • Date of establishment/ incorporation
  • Industry Information

a. Industry segment

b. Sub-segment of industry

c. Products

Details of Promoters:

a. Name(s) of Proprietor/ Partners/ Directors

b. Age

c. Father/Husband’s Name

d. Shareholding (percentage) in Company

e. Residential Address

f. Net worth in Rupees (lakhs) along with CA certified statement

g. Qualification

h. Nature of Experience with No of years

i. Responsibilities in Firm/ Company:

j. Responsibilities in other Businesses

(Passport size photos of all the promoters to be enclosed)

  • Details of Associate Concerns:

a. Name

b. Nature of Business

c. Sales, Net worth, and Debt as on March 31 of the last FY

  • Details of existing borrowing/banking arrangements:

a. Name of Financial Inst./ Bank/ Lenders

b. Nature of assistance/ loan/ limit availed

c. Amount in Rupees (lakhs)

d. Self declaration regarding conduct of the account

  • Production capacity:

a. Name of Product

b. Units

c. Installed Capacity

d. Actual Production

  • Customers’ Reference: (please list 5 top customers of your firm/ company)

a. Name of the customer

b. Percentage in total sales

c. Location

d. Name and details (tel. no./ mobile no.) of contact person of customers

  • Suppliers’ Reference: (please list 5 top suppliers of your firm/ company)

a. Name of the supplier

b. Percentage in total purchases

c. Location

d. Name and details (tel. no./ mobile no.) of contact person of suppliers

Additional Information Required:

  • Details of present orders in hand
  • Percentage of total imports and exports in the business
  • Specific information from the promoters
  • Vision of top management

a. Future plans for expansion/ diversification

b. Marketing arrangements

c. Details litigation against the company/ firm, if any

Now that you have the information required for a CRISIL SME Rating request submission, you can go ahead and apply for your rating today. Don’t let the lack of a credit rating come in the way of the smooth functioning of your company!