Apply For MSME Loan Online

MSME stands for Micro, Small, and Medium Enterprise. An MSME loan, also known as an SME Loan (Small and Medium Enterprise Loan), is a financial facility provided to small business owners, startups, and entrepreneurs to meet their business-related financial requirements. These loans are aimed at supporting the growth and development of businesses by providing necessary financial assistance.

The tenure of an MSME loan typically depends on the loan amount and the fulfillment of the eligibility criteria. The interest rate on MSME loans is determined based on various factors such as:

• Loan amount
• Repayment period
• Business classification under MSME
• Applicant’s profile and creditworthiness
• Financial background
• Repayment capacity

MSME loans are offered by the Government of India, as well as by banks and Non-Banking Financial Companies (NBFCs). However, only those applicants who meet the prescribed eligibility criteria can avail of these loans.

Applying for an MSME loan has become easier with online application facilities, making it convenient for businesses to access the funds they need for growth and expansion.

New Definition of Enterprises Under MSME

From 1st July onwards, the government has revised the definition of enterprises under MSME. You can check below to see which MSME classification your business falls under.

Enterprise	Turnover	Investment
Micro	Up to ₹2.5 crore	Up to ₹10 crore
Small	Up to ₹25 crore	Up to ₹100 crore
Medium	Up to ₹125 crore	Up to ₹500 crore

Interest Rate For MSME Loan

Bank/NBFC	Interest Rate (per annum)
HDFC Bank	10.75% to 22.50% p.a.
SBI (Mudra Loan)	10.10% p.a. onwards
Bajaj Finserv	14% to 30% p.a.
Lendingkart Finance	1.25% per month onwards
Axis Bank	Ceiling rate of 18% p.a.
ICICI Bank	Up to Repo Rate + 6.0%
Kotak Mahindra Bank	Starting from 16% p.a.
Punjab National Bank (Mudra Loan)	RLLR + 1.40%
Corporation Bank	10.30%
Bank of India	Approximately 9.70% p.a.
IDFC First	13% to 23% p.a.
HDB Finance	8% to 26% p.a.
Fullerton Finance	17%
Flexiloans	Starting at 1% per month
RBL Bank	Starting from 17.50% p.a

Note: The interest rates, fees, and charges listed above are subject to change according to the direction of the bank, NBFC, and RBI. GST and sales tax are charged separately for the above charges.

Document Required For MSME Loan Apply in 2020

Below we mention the documents that you should require to apply for an MSME loan:

1. Proof of Identity (KYC Documents)

These documents establish the identity of the applicant (proprietor/partner/director):

• Aadhaar Card - A primary identification document widely accepted across all financial institutions.
• Voter ID Card - To verify nationality and voter registration.
• Passport - Valid proof of identity and address; useful for proprietors with international trade links.
• Driving License - Accepted by most lenders as valid ID proof.
• PAN Card (Personal and Business) - Mandatory for tax purposes and verifying applicant/business identity.

2. Proof of Address

You need to provide documents showing your residential and business address. Accepted documents include:

• Utility Bills (Electricity, Water, Telephone) - Bills not older than 2-3 months.
• Passport - If address is mentioned.
• Ration Card - Commonly used by proprietors in rural/semi-urban areas.
• Rent Agreement (if the business premise is rented) - Valid legal agreement with landlord's ownership proof.
• Property Tax Receipt - For owned business premises.

3. Business Registration Proof

To confirm the legal existence of your business, you may submit:

• Udyam Registration Certificate (Udyog Aadhar before 2020) - Mandatory for MSME classification.
• Certificate of Incorporation - For Private Limited or LLPs.
• Partnership Deed - If the business is a partnership firm.
• GST Registration Certificate - Required if your business is GST-registered.
• Shop and Establishment Act License - Proves business legality at the local level.

4. Bank Statements

Submit recent bank account statements (6 to 12 months) from your business account:

• Should show regular transactions (income & expenses)
• Helps assess your cash flow, working capital cycle, and repayment ability.

5. Financial Documents / Income Proof

The financial health of your business is evaluated through:

• Income Tax Returns (ITRs) - Usually for the last 2-3 years.
• Profit & Loss Statement and Balance Sheet - Audited by a Chartered Accountant (CA), especially for larger loans.
• Cash Flow Projections - Sometimes needed for project-based loans.
• Sales and Purchase Invoices - To verify ongoing business activity.

6. Ownership or Lease Documents

To verify the location and rights of business premises:

• Sale Deed or Ownership Document - If a property is self-owned
• Rent Agreement with Landlord’s NOC - If premises are rented.
• Municipal Tax Receipt - For property ownership validation.

7. Loan-Specific Documents

Depending on the type and purpose of the MSME loan, banks/NBFCs may ask for:

• Completed Loan Application Form - Accurate personal and business details must be filled in.
• Photographs (passport-size) - Usually 2 recent photos of the applicant.
• Quotation or Proforma Invoice - For loans intended to buy machinery or equipment.
• Project Report or Business Plan - Especially for startups or new projects, outlining objectives, market analysis, and ROI.
• Collateral Documents - If applying for a secured MSME loan.

Types of Schemes Under MSME Loans

There are several schemes available under the MSME loan category, designed to support and promote small businesses in India. These schemes are launched and supported by the Government of India and financial institutions. The key MSME loan schemes are mentioned below:

1. Mudra Loan Scheme

The MUDRA Loan stands for Micro Units Development and Refinance Agency Loan. It falls under the Pradhan Mantri Mudra Yojana (PMMY), which aims to provide financial support to micro and small enterprises. This scheme is categorized into three segments based on the loan amount:

• Shishu Loan - For loan amounts up to ₹50,000
• Kishore Loan - For loan amounts above ₹50,000 and up to ₹5,00,000
• Tarun Loan - For loan amounts above ₹5,00,000 and up to ₹10,00,000

These categories are designed to support businesses at various stages of growth from the startup phase to expansion.

2. CGTMSE Scheme

The Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) scheme provides collateral-free loans to new and existing micro and small enterprises. It was launched by the Government of India in collaboration with SIDBI (Small Industries Development Bank of India).

• Loans under this scheme are offered up to ₹1 crore.

It helps businesses obtain credit without needing to provide any security or third-party guarantees.

This scheme aims to encourage lenders to provide financial support to small businesses that may not have access to collateral.

3. PMEGP Scheme

The Prime Minister’s Employment Generation Programme (PMEGP) is a credit-linked subsidy scheme. It combines elements of the Prime Minister’s Rojgar Yojana (PMRY) and the Rural Employment Generation Programme (REGP). Launched in 2008, the scheme is aimed at providing employment opportunities to unemployed youth and traditional artisans by assisting them in setting up micro-enterprises.

• Eligible applicants can receive a subsidy on loans for starting new ventures.
• The scheme is implemented by the Khadi and Village Industries Commission (KVIC), District Industries Centres (DICs), and Coir Board.

These MSME loan schemes are designed to boost entrepreneurship, generate employment, and promote inclusive economic growth across urban and rural areas.

For any queries, simply fill out the form, and one of our registration executives will contact you within 5 minutes through our Udyam Helpline Number.

For any assistance, feel free to contact our executive through the enquiry form.

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