If you are an owner of a small scale industry and need funds for expanding your business, meeting working capital requirements or simply surviving a tough economic environment, you can take a business loan for small scale industries. Nowadays, you can carry out the application process for a small scale industry business loan entirely online. What’s more, you will need to submit very few documents during the same. This article will tell you every other thing you will need to know about business loans for small scale industries.
What is a Small Scale Industries Loan?
Very simply put, a small scale industry loan is an unsecured form of credit that you can take from a lender to accomplish various business objectives. You can use the loan money to scale up your business operations, meet the working capital requirements, survive a tough economic time or to simply consolidate high interest debt. If you apply for a small scale industry loan from Bajaj MARKETS, you can get it at an interest rate starting at just 12% per annum.
What’s more, you can repay it over 60 months so that your equated monthly instalment (EMI) outflow does not disturb your monthly budget. Another benefit of a small scale industry business loan is that you can avail funding of up to ₹50 lakh as one. Another notable feature of a small scale industry business loan is that you will have to pay a processing fee not more than 3% of the loan amount. What’s more, you can foreclose a small scale industry business loan at no additional cost.
Eligibility Criteria for Small Scale Industry Business Loan
The eligibility criteria you must meet and the documents you will need to submit for a small scale industry business loan are as follows:
Nationality |
Indian |
Employment Type |
Self-Employed |
Business Experience |
3 years |
CIBIL Score |
650 or more |
Documents Required for Small Scale Industry Business Loan
The documents that you will need to submit while applying for a small scale industry business loan are as follows:
Know Your Customer (KYC) Documents |
Aadhaar card/PAN card/Ration card/driving licence, and proof of current address (in case you are living in a rented property) |
Business Ownership Proof |
Any kind of licences and registrations in the name of your business. |
Income Proof |
Audited profit and loss statements/Income Tax Returns of at least the past 3 years/Bank statements of at least the past 2 years. |
How to Register a Small Scale Business?
You can register your small scale business online through the official website of the state your establishment is set up in. Alternatively, you can register your venture by downloading the PDF copy of the application form through the official website of your state, duly filling it, attaching the required documents and submitting the bundle in duplicate to the National Small Industries Corporation (NSIC), Zonal or Branch office nearest to your unit.
Note that registering your small scale business is a two part process. Firstly, you will need to acquire a provisional Small Scale Industry (SSI) certificate, which will be valid for only 5 years. Then, you will need to get the permanent Small Scale Industry certificate, which will be valid for as long as your venture exists. Here is a rundown of the steps involved in registering a small scale industry for you:
Step 1: Get a provisional SSI certificate. You must obtain this when your business is in a preoperative stage so that you can avail business loans and funding for the initial working capital requirement. The documents you will need to submit to get this provisional certificate are:
Passport-size photographs of the proprietor or directors of your business, depending upon the case.
A copy of the partnership deed in case your business is a partnership firm.
A copy of the Memorandum of Association (MoA) and Article of Association if your business is a private limited company. Additionally, you will need to submit a copy of the company resolution.
Proof of legal possession of the premises in which your unit has been set up, such as a sale deed or a rental agreement.
Step 2: Start producing the product your business intends on making in your facility. You will mandatorily need to complete this step if you want the permanent certificate.
Step 3: Apply for the permanent SSI registration either online or through the Zonal office/Branch office or the NSIC branch closest to your unit.
Before you do so, you will need to satisfy the following conditions:
Your unit should have all the relevant clearances.
Your unit should not violate any geographical or environmental restrictions.
Your unit should not be a subsidiary.
As far as the required documents are concerned, you will need to submit the exact same documents that you did while applying for the provisional certificate. But, in addition to that, you will need to submit the bills of the machinery and raw materials you have purchased. You will also need to submit affidavits and relevant clearance certificates along with them. Note that they will depend on the state you have set up your unit in.
SSI Registration Benefits
Some of the benefits of registering your small scale industry are:
You can easily get finance for business expansion as a registered small business owner.
Registering your small business also helps you save tax in the form of rebates, which will help you reduce the cost of running your company.
It allows you to be an active participant in government tenders and get bulk orders to scale up your business.
Permanent registration as an SSI enterprise helps you to acquire government licences and certificates to build your credibility in the industry.
Features and Benefits of Running Small Scale Business
Some of the features and benefits of you running a small scale business are:
Sole or Partnership Ownership: Either you are the sole proprietor of the company or have a few selected individuals as partners in your firm.
Management: You are directly involved in the day to day business operations of your company and hence you have greater control over your business.
Labour Intensive: Even though you might employ technology, the industry relies heavily on labour and hence your business labour-intensive and hence it is not very dependent on technology.
Small Market Area: The focus of your business is to meet the demand in the particular region and is more localised, rather than operating on a large scale.
Flexibility: You can easily adapt to a dynamic business situation, since you run a comparatively smaller enterprise.
Resources: You can efficiently utilise the resources available to you in your town or area and save on transportation costs. As a result of which, you will be able to maximise profits.
Funding Your Small Scale Business
Whether you are striving to get your company running, want to upgrade the machinery or even start a new business, you have several funding options to choose from. It is not just the small scale industries loan scheme from the Government that can come to your rescue and help you fulfil your dreams. As an alternative, you can always apply for a small business loan from Bajaj MARKETS. You can get business loans from lending partners of Bajaj MARKETS at competitive interest rates and with flexible loan repayment tenure, which can be as high as 5 years.
