MSME Loan / SME Loan

Whether you need an SME business loan or an MSME business loan, get the required funding to meet your operational needs with ease.

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In recent years, the country’s booming economy has provided momentum to the rise of several SMEs (small and medium-sized enterprises) and MSMEs (Micro, Small, and Medium Enterprises). Moreover, it has become quite easy to obtain an MSME/SME loan to meet your business’s working capital requirements.

You can use an MSME/SME business loan for several purposes. Bajaj Markets offers loans that can support:

Upgrading your company’s infrastructure
Buying and repairing factory machinery
Purchasing raw materials
Setting up or expanding your business

Read on to learn about SME/MSME business loans, their features, the application process, interest rates and more.

Key Features of SME/MSME Business Loans

Quick Online Processing

You can apply for SME funding online on our platform and get it approved in just a few minutes.

Zero Collateral

Most MSME loans for new businesses are unsecured and do not require you to pledge collateral.

High Loan Limit

The SME funding options offered on Bajaj Markets come with a high loan limit of ₹50 Lakhs.

Long Repayment Tenure

Repay SME finance within a flexible repayment tenure of 12 to 72 months.

How to Apply for MSME Loan Scheme

The registration process to get MSME or SME finance can be carried out online with ease. Just follow the below-mentioned steps to register your firm for the MSME loan scheme:

Step 1: Log in to udyogaadhaar.gov.in for MSME Registration and select one of these 2 options:

Entrepreneurs who are not registered as MSME or with EM-I
Entrepreneurs who have the Udyog Aadhaar Memorandum (UAM) or are registered as EM-II

Step 2: Fill in the details in the registration form on the website
Step 3: Provide details such as your Aadhaar number, industry type, address, bank account details, etc
Step 4: Provide self-attested certificates along with the application form and enter the OTP received on your registered mobile number
Step 5: Wait to receive your registration information once your information gets submitted

MSME/SME Loan Fees and Interest Rates

On Bajaj Markets, you can get MSME/SME Loan at an affordable MSME loan interest rate, starting at 12%. In addition, nominal charges are levied as processing fees or penalties if the applicant decides to prepay or foreclose the loan.

Interest Rate	12% onwards*
Processing Fee	About 2%-3% of the loan amount*
Loan tenure	12-72 Months
Pre-closure Charges	Nil
Loan Amount	Upto ₹50 Lakhs*

Disclaimer: Aforementioned loan specifics can vary at the lender’s discretion.

MSME/SME Loan Interest Rates by Top Banks/NBFCs

You may refer to the following table to get an idea of the interest rates levied by our various lending partners on business loans for MSMEs/SMEs.

Our Partners	Interest Rate Range	Max Loan Amount/ Tenure	Avail Loan
Ambit Finvest	20% onwards	36 months	Apply Now
AYE Finance	28% onwards	36 months	Apply Now
FlexiLoans	12% onwards	36 months	Apply Now
IIFL Finance	18% onwards	60 months	Apply Now
InCred	20% onwards	48 months	Apply Now
Indifi	16% onwards	36 months	Apply Now
KreditBee	15% onwards	9 months	Apply Now
Lendingkart Finance Limited	15% onwards	36 months	Apply Now
Protium Finance Limited	1.25% p.m. onwards	72 months	Apply Now

Disclaimer: Aforementioned loan specifics can vary at the lender’s discretion.

Eligibility Criteria for MSME/SME Loans

While different lenders have different eligibility criteria, you must fulfil the following general criteria to be eligible for an MSME/SME business loan from any bank/NBFC:

You must be an Indian citizen
You must be between 24 and 70 years of age
You must have a minimum credit score of 685
The business must have been successfully running for a minimum of 3 years
The business must have filed IT returns for at least the last year
You must not have any past record of loan default in your or your business’
Eligible entities for an MSME loan scheme are partnership firms, proprietorships, limited companies, Hindu Undivided Families, women entrepreneurs, self-employed professionals, private limited companies, limited liability partnerships, and cooperative societies

Documents Required for MSME/SME Loans

You must submit the following documents to the lender when applying for an MSME/SME loan for your business:

Identity Proof: Aadhaar card, passport, voter ID, PAN card, etc.
Address Proof: Electricity bill, telephone bill, passport, Aadhaar card, driving license, etc.
Business Proof: Certificate of business, ITR filings for the previous financial year, profit and loss statements for the past 3 years, etc.
2 passport-size photographs

Dos and Don'ts Before Applying for MSME/SME Loan

Check out some do’s and don’ts you must consider while applying for an MSME/SME loan.

Dos	Don’ts
Most lenders rely on the borrower’s credit rating for loan approvals. Check your CIBIL score before applying for an MSME or SME loan.	Do not apply with multiple lenders, as it reduces your CIBIL score considerably. The lender might see this as high financial reliance, which might lower your chances of loan approval in addition to your CIBIL score.
Ensure all the required documentation is in place before starting the loan application process.	Avoid delaying your loan repayments for existing debts even if you take the MSME loan for new business debt consolidation. This will affect your credit score negatively.
Make sure the MSME loan requirements are assessed before applying for the loan. Try not to overestimate or underestimate your MSME loan requirements as you will waste your time and money in both cases.	Be aware of fraudulent lenders that may charge you huge fees for MSME loan approval. A genuine lender will never ask you for an upfront fee and will typically charge you a percentage of the disbursed loan amount.

Smart Ways of Using MSME/SME Loan

MSME/SME loans are offered to startup owners, small business owners, and women entrepreneurs on a short-term basis. The duration of MSM/SME loans is not the same everywhere and differs from one lender to another.

Lack of timely finance is one of the biggest setbacks for the growth of MSMEs in India. With MSME/SME loans, it is easy to avail instant financing for the business. An MSME loan for new businesses or established enterprises can offer the financial support to carry out numerous business operations with ease.

Here are five smart ways to utilise the funds of an MSME/SME business loan:

1. Inventory Management: Inventory management is a critical part of a small business, as its profits depend on the sale volumes. The MSME/SME loan funds can help secure your inventory supply chain, manage seasonal dips, or purchase new product samples for business sales.

2. Purchasing Plants & Machinery: MSME/SME loans can fund the purchase of new equipment required for the business. Since investment in plants and machinery requires heavy funding, applying for an MSME/SME loan can aid such expenses without straining the company’s capital fund.

3. Working Capital Management: If a company cannot finance its day-to-day expenses, the production of wares and services will eventually suffer. A business owner can apply for MSME/SME loans and use the funds to ensure the company runs smoothly while repaying short-term debt and expenses that might arise soon.

4. Consolidate Your Business Debt: MSME/SME loans allow you to consolidate smaller debts and turn them into a single EMI. This helps reduce the strain caused by the monthly budget and helps align the debt repayment and the invoicing schedule.

5. Invest in Marketing: With an effective marketing strategy, a business can reinforce the trust and loyalty of its existing customers and acquire new customers in existing or new markets. However, marketing is a costly affair and requires investments in marketing campaigns. An MSM/SME loan can help finance these campaigns for your business.

MSME/SME Loan News Update

Rajasthan's Chief Minister, Shri Ashok Gehlot, Inaugurates India MSME Week

Shri Ashok Gehlot, Honourable Chief Minister of Rajasthan, recently inaugurated India MSME Week in Jaipur. Scheduled to be commenced on July 21, 2023, the event is aimed at encouraging entrepreneurs as well as investors to venture into investments in small and medium-scale industries.

The 'India MSME Week' is being organised in association with the Rajasthan Industries and Commerce Department. The event will provide entrepreneurs ample opportunities to invest in Rajasthan while making the most of various ongoing government schemes. The state government is hopeful that with the opening of new avenues of investments and industries, there will be a robust increase in employment possibilities in the area, further benefiting the people of the state.

- Jul 10, 2023

The FY 2023–24 Union Budget includes an additional ₹9,000 Crore in corpus support for the CGTMSE Scheme to Modernise the Programme

Under this revamped scheme, the applicants can opt for a Hybrid security product where collateral coverage is offered partially. The scheme does not provide financial assistance to enterprises from the training and education industry.

- May 02, 2023

India's MSME Sector has a $530 Billion Credit Gap out of a Total $819 Billion Demand, According to a Report.

A recent report from Avendus Capital, an investment banking company, revealed a massive credit gap in India’s MSME sector. According to the report, there are over 64 million MSMEs in the country, of which only around 14% have access to formal credit facilities. Of the total demand for debt amounting to $1,544 billion, 47% was deemed to be addressable. The reasons for this include a lack of financial viability and a preference for informal lending sources.

Introduced in July 2000, the CGTMSE offers a credit guarantee to banks that extend financing to MSMEs. The scheme initially had an outlay of ₹2,500 Crore from both the Indian government and the Small Industries Development Bank of India (SIDBI). Later, this was enhanced to ₹5,000 Crore.Of the remaining 53% of the debt demand, amounting to $819 billion, formal lending institutions only fulfilled around $289 billion. The resultant credit gap amounts to a massive $530 billion.

- April 03, 2023

Assam emerging as MSME investment hub: study

A study showed that Assam is fast surfacing as a hub for investment in the micro, small, and medium enterprises (MSME) sector in the North East region of India. However, it is also suggested that this sector needs a boost in terms of financing and technological inputs to grow and multiply even further.

The study, published by the Export Promotion Council (EPC) of the MSME Ministry and BillMart Fintech, states that a large chunk of investment from the private sector is being directed to the sectors of food processing, organic, horticulture, petroleum, and MSME units. Additionally, the report also states that these sectors contribute significantly to the generation of jobs and boost sustainable livelihood and growth.

Among the MSMEs located in the North East, a dearth of access to financing and credit was found to be a major issue, with Assam housing 61.48% of the total MSMEs in the region (67,000 industries – 88% micro-units and 11.5% small and medium enterprises).

The study goes on to state that in 2018-19 alone, the state of Assam received investments to the tune of Rs. 1,162,202.6 million for new projects, of which Rs. 1,153,351.6 million was spent on projects that were completed. In the year 2020-21, the state received Rs. 6,902.3 million for investment purposes, of which projects worth Rs. 33,986.6 million were completed.

The government of Assam has also formulated a plan to link these MSMEs to financiers – those who will provide affordable credit, as well as a range of services pertaining to marketability and financial accountability.

- May 23, 2022

MSME loan relief till month-end

The Emergency Line of Credit Scheme (ECLGS)worth ₹3 crores is unlikely to be extended beyond October 2020, by the government to the MSME sector. The scope for the ECLGS scheme was broadened by the government on August 1st. The government chose to double up on the upper ceiling of the loans outstanding while also adding loans specifically for chartered accountants, lawyers, and doctors to the scheme. Reportedly, the amount that has been sanctioned off so far is just about 65% of the target amount, yet the scheme is not likely to continue providing support to micro, medium, and small enterprises, if there are no takers.-

As per the new definitions, any firm with an investment of less than ₹1 Crore and turnover of less than ₹5 Crores will fall under the micro category. Businesses with less than ₹10 Crore investment and turnover of less than ₹50 Crores will be considered under the small category.

Enterprises with an investment of less than ₹50 Crores and turnover of less than ₹250 Crores will fall under the medium category.

The Atma Nirbhar Bharat Abhiyan package of ₹20 Lakh Crores was introduced to revive the Indian economy by providing funds to help farmers, migrant workers, etc. and revive the industrial sector.

The campaign also aims to address issues faced by businesses and MSMEs, and the steps announced will boost liquidity, empower entrepreneurs, and strengthen their competitive spirit.

The government of India has proposed to offer collateral-free loans as a relief for MSMEs which the Centre will fully guarantee. A principal repayment moratorium for 12 months, along with the interest rate capping, will be applicable with a no-guarantee fee.

You can avail of an MSME loan through Bajaj Markets if you are a self-employed professional or non-professional, including a trader, retailer or proprietor.

The process of applying for an MSME loan is quite simple and easy. You can apply online by visiting the official Bajaj Markets website. Login or register using your mobile number and OTP, fill out the application form and submit all the required documents to complete the process.

It is not necessary, but it is always advisable to get your company registered as an MSME (if it satisfies the requisite criteria), for it will help your business scale up and save you from inconveniences like taxes, permissions, employee-related issues, and other legal issues.

You can easily apply for the booster scheme for MSMEs on the Udyog Aadhaar website. Just fill in the application form and provide the requisite details like Aadhaar number, industry type, address, bank account details, etc. You will be given a registration number once your application is successfully submitted.