Procedure For Getting MSME Loan

An SME/MSME loan is usually provided to help entrepreneurs start small businesses or to help small business owners improve their existing business. Getting a small business loan is a simple and low-cost way to borrow for commercial ventures and plug in the gaps of finance by covering a variety of expenses without facing any delays. You can get an SME Loan without collateral, which means you are not required to pledge any of your valuable assets as security. SME/MSME business loans are an ideal source of hassle-free finance for your enterprise.

SME/MSME Loan Procedure

The following are the steps to apply for a SME/MSME loan

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.

Type of Loan Options for SMEs

business loan can be used for various purposes depending on the type of business and the purpose of utilizing the loan amount. Hence, there could be a variety of uses that one could put the money to use.

  • Working Capital Loan

A working capital loan is an unsecured loan that is intended only for small businesses for meeting their daily operational needs. In the case of loss or stagnation in business, a working capital loan becomes a necessity for some businesses.

  • Term Loan

This a popular SME loan option can be availed by individuals who are looking for financial assistance for their business. Term loans are long-term loans that are beneficial for business expansion and to purchase immovable assets like machinery, building or land. Being a long term loan these loans usually last between one and ten years, but may also extend up to 30 years in some cases.

  • Top-Up Loan

Top-up loans come with low-interest rate loans. A top-up loan will be given only if you have an existing loan facility from the same bank or financial institution that allows a loan borrower to borrow a certain amount of money that is then added over and above your current loan.

  • Machinery Loan

Getting the latest machineries for your business would ensure that you are able to build your business the way you want to. This loan can be used to purchase new machineries or upgrade existing machineries for your business. Being one of the most important kinds of loans for business, a machinery loan is quite easy to avail.

  • Invoice Financing

 With this type of business loan, you use your outstanding invoices to get a cash advance from a lender. The unpaid invoices act as collateral for the advance. Invoice financing is a great option if a business owner has improper cash flow all of whom pay at different times. You can use the advance to cover payroll, rent, and other operating expenses.

Benefits of MSME/SME Loan

  • Investing in your firm’s infrastructure
  • Meet working capital requirements for your business
  • Purchasing a new plant, machinery or latest technology
  • Pay for several overheads like accounting fees, advertising, rent, repairs, etc.

Eligibility Criteria

MSME – Merged Criteria: Investment and Annua

SME Eligibility Criteria

The Type of Sector/Enterprise

Small Enterprise

Medium Enterprise

Manufacturing & Services Sector

 

Investment less than Rs. 10 crore

Turnover of up to Rs. 50 crore

Investment less than Rs. 50 crore

Turnover of up to Rs. 250 crore

To avail the benefits of a business loan, you need to fulfill the following eligibility criteria

  • You must be a citizen of India to be eligible for a loan.
  • You must be a self-employed individual.
  • Self-employed individuals between 26 - 66 years are eligible and can apply for a Loan.
  • Your business must be at least 3 years.

You take the help of a business loan eligibility calculator to understand the criteria of the lender. Once you check your business loan eligibility, you will be asked to submit relevant documents at the time of application.

Documents Required

The following are the documents required to apply for an SME/MSME loan

  • Identity Proof such as Personal KYC, PAN Card, Aadhar Card
  • Address proof like Electricity bill, Telephone bill, Passport, Aadhar Card, Driving License
  • Last 6 months Current Account Bank Statement
  • Business Proof such as the certificate of business existence, Income tax filings, profit and loss bank statements for the past 3 years, etc.
  • GST Registration Certificate

Interest Rates & Charges on Loan

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

By getting a business loan at Finserv MARKETS, you can get the finance needed to purchase the equipment for your business. You can avail loans available on Finserv MARKETS at attractive interest rates for undertaking various business operations, such as an expansion of your business, acquisition of other companies, buying high-value and getting new machinery or equipment, etc.

The Bajaj Finserv Business Loans available on Finserv MARKETS are collateral-free, which means you do not have to put your personal or business assets on the line to get the finance for your business. If you are an existing customer at Finserv MARKETS, you can also avail of exclusive pre-approved Business Loans. Apply for an MSME loan and get easy access to value-added services like a customized insurance plan and a financial fitness report that would help you gauge your control over your finances.

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