MSME Loan Introduction

In recent years, the country’s booming economy has given an impetus to the rise of several SMEs (Small and Medium-sized Enterprises) and MSMEs (Ministry of Micro, Small and Medium Enterprises). Moreover, it has now become extremely easy to avail an MSME business loan to meet your business’ working capital requirements. An MSME loan can be used for several purposes such as upgrading your Company’s infrastructure, buying and repairing factory machinery, purchasing raw materials, etc. With us, at Finserv MARKETS, you can easily avail MSME and SME business loans to set-up or expand your business.

Booster Scheme For MSME During Pandemic

The estimated 6.3 crore MSME units are considered as the backbone of the Indian economy. With the ongoing lockdown, the government introduced relief packages to support stressed MSMEs. The aim of providing these relief packages is to help meet the temporary liquidity mismatch due to the Pandemic crisis. This includes payment of statutory dues, salary/wages/electricity bills/rent etc.

Finance Minister of India, Nirmala Sitharaman announced the economic package to help the stressed MSMEs, sustain the disruptions caused by the Pandemic lockdown. The scheme offers:

  • Collateral-free loan package of about Rs. 6 lakh crore

  • Providing Rs. 3 lakh crore for small businesses

  • Rs. 30,000 crore lifeline to non-bank and housing finance companies (NBFCs).

The goal behind this economic package is to build a self-reliant India. The focus of “Atma Nirbhar Bharat Abhiyan” would be on land, labour, liquidity and law.

Features and Benefits of the Bajaj Finserv MSME loans

  • Quick online processing

    Finserv MARKETS offers online processing for all types of loans for small business. You can apply for a SME business loan online with us and get it approved under just 3 minutes. The online process not only saves time but also ensures that your request is processed instantly and the amount is disbursed into your bank account within 24 hours of approval.

  • Zero Collateral

    Most financial institutions demand a collateral against the loaned amount for a business loan. However, MSME loans at Finserv MARKETS are unsecured in nature and do not require the applicant to provide any form of collateral.

  • High Loan Limit

    Depending on the planned expansion scale, the range of the funds required for a particular business may vary. Therefore, the SME business loans offered at Finserv MARKETS come with a high loan limit of INR 30 lakhs.

  • Long repayment tenure

    It is necessary to have a comfortable loan repayment tenure so that the borrower does not default on his/her EMIs. At Finserv MARKETS, an applicant can enjoy a flexible repayment tenure of 12-60 months on his/her MSME business loan.

  • Value Added Services

    With MSME loans at Finserv MARKETS, you get easy access to value-added services such as financial fitness reports and customized insurance plans.

MSME Definition Revised

The booster scheme has brought a change in the definition of what constitutes an MSME. From now on, enterprises with an investment of less than Rs.1 crore and turnover less than Rs. 5 crore will be treated as micro, while businesses with less than Rs. 10 crore investment and Rs. 50 crore will be considered under the small category. The businesses that have an investment less than Rs. 20 crore and turnover less than Rs. 100 crore will fall under the medium category.

Existing MSME Classification

Criteria: Investment in Plant & Machinery or Equipment

Classification

Micro 

Small 

Medium

Mfg. Enterprises

Investment<Rs. 25 Lakhs

Investment<Rs. 5 crore

Investment<Rs. 10 crore

Services Enterprises

Investment<Rs. 10 crore

Investment<Rs. 2 crore

Investment<Rs. 5 crore

Revised MSME Classification

Composite Criteria: Investment and Annual Turnover

Classification

Micro 

Small 

Medium

Manufacturing & Services

Investment<Rs. 1 crore

Turnover<Rs. 5 crore

Investment<Rs. 10 crore Turnover<Rs. 50 crore

Investment<Rs. 20 crore

Turnover<Rs. 100 crore

Nirmala Sitharaman also stated that these changes will help businesses in the sector to expand and still reap benefits accorded to MSMEs by the government.

MSME Loan Eligibility

An applicant needs to fulfil the following MSME business loan eligibility when applying at Finserv MARKETS-

  • Applicant must be within the age-group of 25-55 years
  • The applicant’s business vintage must be more than 3 years
  • The applicant’s business should have filed for Income Tax Returns for at least the past 1 year
  • The applicant must have a minimum credit score of 750
  • The applicant must not have any past record of loan default in his/her name or in the name of the business.

Eligibility for Booster Scheme

The government with its “Atma Nirbhar Bharat Abhiyan” package revised the definition of Micro Small and Medium Enterprises (MSME). The changes are made in the favour of MSMEs, as many successful MSMEs fear to outgrow the size of what has been defined as an MSME and end up losing their entitled benefits. With the revised definitions, the MSMEs can think of expansion and still avail benefits.

  • Fund Based Working Capital Limits irrespective of sector/ constitution are eligible for the booster scheme. This facility should be given only to the going concern borrower as on the date of sanction.

  • Existing MSME units having credit limits with satisfactory credit record of at least two years are considered eligible for the scheme.

  • All standard accounts including (Special Mention Account) SMA-0, SMA-1 on the date of sanction irrespective of internal rating are eligible.

Types of Company that are eligible for MSME Loan Schemes

  • Partnership Firm

  • Proprietorships

  • Limited Company

  • Hindu Undivided Family 

  • Producer Company

  • One Person Company

  • Private Limited Company

  • Limited Liability Partnership

  • Any association of persons

  • Co-operative societies

Documents Required For MSME Loan

  • Identity Proof: Aadhar Card, Passport, Voter ID card, etc.

  • Address Proof: Electricity bill, Telephone bill, Passport, Aadhar Card, Driving License

  • Business Proof: Certificate of business existence, Income tax filings for the previous financial year, profit and loss statements for the past 3 years, etc.

  • 2 Passport-size photographs

MSME Loan Interest Rates and Charges

Finserv MARKETS offer affordable SME business loan interest rates, starting from 18%. In addition, nominal charges are levied as processing fees or penalties if the applicant decides to prepay or foreclose the loan.

How to Apply for Business loan for SMEs/MSMEs?

You can initiate the MSME loan process with these easy steps-

Step 1: Fill out the online application form at Finserv MARKETS by submitting your personal and business details

Step 2: Select the amount you want to avail as an MSME loan along with the preferred repayment tenure.

Step 3: Once you submit the online application, you can get it processed and approved under 3 minutes.

You can also check your SME loan EMI with Business Loan EMI Calculator.

How to Apply for MSME Loan Scheme 2020?

The registration process for MSME can be carried out online as well as offline. You can register for more than one industry with an individual registration.

Step 1: Log in to udyogaadhaar.gov.in for MSME Registration

Step 2: Fill in the details in the registration form available at the website

Step 3: Provide documents like your Aadhaar number, Industry name, Address, bank account details, etc.

Step 4: You can also provide self-certified certificates along with the application form.

Step 5: Once the details are filled and uploaded, you will receive the registration number for the same.

MSME Loan Interest Rates & Charges

  • The interest rate on loans for SME/MSME can be charged up to an interest rate of 9.25%

  • Non-banking financial companies (NBFCs) can charge up to 14% on loans.

  • The interest scheme will cover only existing borrowers with an outstanding credit limit of up to ₹25 crores as on 29 February, and having a turnover of up to ₹100 crores. 

  • Also, including the borrowers with up to 60 days past dues, and cover working capital and term loan facilities.

MSME Loan FAQ's

  • ✔️What is the new definition for MSME?

    While the previous order has now lapsed, the definition for MSMEs has changed to a combination of turnover and increase in the investment in plant and machinery. Any firm with an investment of less than Rs. 1 crore and turnover less than Rs. 5 crore will fall under the micro category, while businesses with less than Rs. 10 crore investment and turnover less than Rs. 50 crore will be considered under the small category. The enterprises with an investment less than Rs. 20 crore and turnover less than Rs. 100 crore will fall under the medium category.
  • ✔️What is the “Atma Nirbhar Bharat Abhiyan” scheme?

    The Atma Nirbhar Bharat Abhiyan package of Rs. 20 lakh crore was introduced to revive the Indian economy, to help farmers, migrant workers, etc. and to revive the industrial sector. The measures taken will go a long way in addressing issues faced by businesses and MSMEs. The steps announced will contribute to boost liquidity, empower the entrepreneurs and strengthen their competitive spirit of the MSME sectors.
  • ✔️What are the proposals aimed at offering relief to MSMEs?

    The government of India has proposed to offer collateral-free loans as a relief for MSMEs which will be fully guaranteed by the Centre. A principal repayment moratorium for 12 months along with the interest rate will be capped with no guarantee fee.
  • ✔️How to apply MSME loans during Pandemic?

    The process to apply for an MSME loan is quite simple and easy 1. Fill in the online application form of MSME loan. 2. Submit all the required documents to complete the process. 3. Once approved the loan amount will get disbursed in the bank within 24 hours.
  • ✔️Is company registration required for MSME?

    It is not necessary, but it is always safe to get your company registered as it will help your business scale up and save inconveniences like taxes, permissions, employee-related issues and other legal issues.
  • ✔️Who can avail MSME loan?

    Self-employed professionals and self-employed non-professionals like proprietors, retailers, traders and others can avail the SME/MSME Loan at Finserv MARKETS.
  • ✔️How to apply for the booster scheme for MSME?

    1. You can log in to the website at udyogaadhaar.gov.in 2. Provide documents like your personal Aadhaar number, Industry name, Address, bank account details, etc. 3. Once the details are filled and uploaded, a registration number will be provided to you.

Business Loan Reviews

Business Loan Reviews

3.9out of 5

3 reviews

Best Business Loan Ever

I am happy to have availed the business loan for SME at Finserv MARKETS. The application process was simple and documents required were minimal. I received the loan amount within 24 hours and that helped me to carry my business operations with ease.

Great Services

A friend of mine suggested me to avail business loan for MSME at Finserv MARKETS. I got the loan at a very reasonable interest rate and I couldn’t have asked for any better customer service.

Happy experience

I applied for the business loan for SME at Finserv MARKETS last year and was very happy with the swift process and the flexible EMI payments.