MSME LOAN
Choose from a Term Loan or Revolving Line of Credit.
- Amount to suit various business needs
- Flexible tenure for easy repayment
- Competitive interest rates
- Transparent processing
Grow with MSME business loan effortlessly
MSME that meet the following criteria are eligible for Business Loan
MSME Loan Eligibility
- Minimum operational history of 1 year
- Business registration certificate (Govt.)
Required Documents For MSME Loan
- Business Registration Proof
- KYC documents of the applicant and the business entity
- Bank statement for the last 9 months
If You Are Looking For MSME Loan, You Can Avail
50K to 50 Lacs
Amount to suit various business needs
12 to 36 Months
Flexible Tenure for easy repayment
1.5% to 2.5%
Competitive Interest Rates
No Hidden Charges
Transparent Processing
Get upto 50 lacs with Quick Disbursal
We work with specific segments and use our understanding to make loan better
Quick & Simple
Minimum documentation. No collaterals
Multiple Lenders
One application. Multiple lenders. Increased chances of loan approval
Best Fit
Specific loan products. For specific business needs
Flexible & Transparent
Choice of loan tenure & repayment modes. No hidden charges
About MSME Loan
New Definition Of MSME
Under the new definition, the distinction between manufacturing and services enterprises has been eliminated. Under the new definition of MSMEs, the investment criteria for such enterprises have been revised upwards, while an additional criterion of turnover has been introduced.
MSME – Merged Criteria: Investment and Annual Turnover
Sector/Enterprise Type
Manufacturing & Services Sector, Both
Micro Enterprise
Investment less than Rs. 1 crore
- Turnover less than Rs. 5 crore
Small Enterprise
Investment less than Rs. 10 crore
Turnover up to Rs. 50 crore
Medium Enterprise
Investment less than Rs. 20 crore
Turnover up to Rs. 100 crore
Key Takeaways of New MSME Definition introduced in 'Atmanirbhar Bharat Abhiyan‘ Scheme 2020 by Indian Government.
Collateral Free MSME Loan
MSME Loan worth of Rs. 3 lakh crore
Moratorium period offered is 12 months
Manufacturing and Service MSMEs shall be considered as same entities
Repayment Tenure of 48 months
100% Credit Guarantee
To benefit approx. 45 lakh units
About MSME Loan
Every small business enterprise requires financial help at some point. The majority of the Micro, Small, and Medium Enterprises (MSME) generally need financial assistance when they are growing horizontally or vertically. This requirement can be for raw material purchase, infrastructure development, or fulfilling operating expenses. It is at the discretion of the business from where they decide to borrow money, as per their needs and priorities.
However, businesses also have the option of obtaining funds from different borrowing instruments. MSME loan are unsecured loans offered by various financial institutions to meet business-related expenditures on credit. It is to be noted that, such loan come with explicit eligibility criteria to reduce the risk ratio for the lenders. RBI and the Indian government define such msme loan as, the MSME loan offered to businesses for support in terms of infrastructure, finance, and other sectors.
MSME loan are also referred to as SME (small and medium enterprise) loans. Usually, these msme loan are granted to small business owners, startup owners, and women entrepreneurs with subjective loan tenure. Here are some of the salient features, benefits, eligibility, and smart usage of MSME loan funds.
Features of MSME/SME Business Loan
MSME loan can offer funds for many crucial functions that are responsible for the development of a company. For instance, they can save their time by filling an online application form and confirming their requirements. They need not follow a long approval procedure while loan application on digital platforms.
Here are some attractive features offered by digital lending platforms to its applicants:
- Online Application:
Digital lenders follow a fast track procedure and try to eliminate every possible delay factor in the msme loan application and approval process. Online loan generally get approved within a few working days, provided eligibility criteria are fulfilled.
- Amount and Tenure of MSME Loan:
Business owners can avail a msme loan up to 50 lakhs. Also, the majority of digital lending platforms adopt a flexible approach when it comes to repayment of MSME loan. They generally follow tenure of 12 to36 months, to allow the businesses to repay it as per their preferred schedule.
- Hidden Charges:
Availing MSME loan from digital lenders don’t come with any hidden or extra charges.
- Flexible Repayment Option:
Digital lenders offer ample of time and repayment options to its MSME/SME applicants. The MSME loan tenure range from 1-36 months. Applicants also have an option to repay in EMIs or bi-weekly or monthly installments.
MSME / SME Loan Fees & Interest Rates
| Customized Interest Rates | Starting @1.5% PM |
| Processing Fees | 2-3% |
| Loan Tenure | up to 3 years |
| Pre-closure Charges | 4% |
| Eligibility Criteria | > 5L Turnover in last 6 Months |
| Loan Amount | ₹ 50,000 – ₹ 50 Lakhs |
| Installments | Monthly |
Benefits of MSME/SME Loan
What are the benefits of MSME loan application from a digital lender? Keep reading to know more about it.
- Competitive Interest Rates:
The best part about applying MSME/SME loan is the competitive interest rates. Digital lenders follow an online msme loan process that is both time-saving and resource-saving. In this turn, it helps them in saving costs and offering competitive interest rates for MSMEs.
- No Collateral:
MSME/SME loan are unsecured loans. In other words, applicants need not pledge any asset to secure the MSME loan.
- Quick Funding:
Applicants can expect MSME loan sanction within a couple of days. Fund disbursal will also be done at a rapid rate. What more can they ask for? They need not wait for weeks or months to get their msme loan applications sanctioned.
- Complete Control:
MSME/SME are unsecured loans for the applicant who meet certain eligibility criteria. The applicants do not lose their ownership and control over their assets. They can use these assets to grow their business further.
- Better Capital Management
Loan applicants can expect peace of mind by applying for MSME/SME loan from digital lenders. They can invest the funds in plant and machinery or streamline their cash flows and working capital.
- Enhance Goodwill
Every business needs the right boost to grow and succeed. MSME/SME loan are the perfect medium that can help such enterprises grow at the appropriate time. This will enhance their credibility and goodwill in the market. This will open more avenues for business finance and investments.
Eligibility Criteria for MSME/SME Loan
The digital lending platforms don’t believe in burdening the loan applicants with complex eligibility criteria. Generally, businesses are eligible to get a business loan if:
The manufacturing unit is operational for the last one years
IT returns are filed on time for the last two years
GST returns are filed for the last 12 months on time
Documents Required For MSME / SME Loans
| Documents | Proprietorship | Partnership | Pvt. Ltd. / LLP / One Person Company |
|---|---|---|---|
| Bank statement (12 months) | Yes | Yes | Yes |
| Business registration proof | Yes | Yes | Yes |
| Proprietor(s) PAN Card Copy | Yes | Yes | Yes |
| Proprietor(s) Aadhar Card Copy | Yes | Yes | Yes |
| Partnership Deed Copy | No | Yes | No |
| Company PAN Card Copy | No | Yes | Yes |
Procedure to Apply MSME Loan
Here are the three easy steps to get an MSME/SME loan
- Application:
- Documents:
- Sanction:
Applicants who wish to secure a MSME loan can fill in an online application form giving details about their fund requirements
The next step is to upload relevant documents like bank statements, PAN Card copy, Adhaar Card copy, Business Registration Certificate, GST Filing, Drug License, Trade License, TIN, and VAT Registration.
Applicants can expect a MSME loan application approval the moment all their documents and other submissions are verified.
Why should Enterprises go for MSME loan?
Do you know that the MSME sector is one of the largest sources of industrial output and employment in India? Around 40% of the total country’s exports and 45% of the total industrial production comes from this section. Therefore, the MSME sector has always showcased a high demand for business finance.
Inability to secure finance at the right time is one of the biggest issues faced by various small and medium scale enterprises in the country. However, (NBFC<) non-banking financial companies are a promising alternative for the manufacturers who wish to secure business finance immediately. The online submissions for MSME loan process have made very easy and short.
They can utilize these funds wisely in the following activities:
Manufacturers can utilize their business loan funds to purchase new machinery or upgrade the existing ones. This will have a direct impact on their profit ratios and growth chart.
If an enterprise is confident of its plant and machinery, and installed technology, the best way to utilize MSME loan funds is the procurement of raw material. The high-quality raw material will ensure equal grade final products and ultimately high profits.
WCM is a business strategy formulated to ensure that the company grows by utilizing its assets and liabilities in the best possible manner. Manufacturers can effectively utilise their loan funds to expand their business operations without exhausting their existing capital funds. This can be a fruitful option for the manufacturers who have the latest manufacturing equipment and aim to vertically or horizontally expand their operations.
Manufacturers can also use MSME loan funds to market their products and services on a larger-scale. This will open many new growth avenues for their enterprises.
MSMEs can utilize the loan amount to hire new employees and train the existing workforce. Training the employees regarding the latest industrial advancement can prove to be fruitful in gaining a competitive edge in the industry.
Do’s and Don’ts while Applying for Online MSME loan
Here are some simple tips that will increase the chances of securing an MSME/SME loan for the applicant, by reducing the risk of rejection.
Do’s
The applicant must cross-check all the compulsory documents required for this process
Applicants should check their credit score as some digital lenders consider it at the time of sanctioning the MSME loan amount.
Calculating the actual MSME loan requirements in advance will be a wise move for the applicants.
Applicants should also have a viable business plan for the right allocation of loan funds.
Don’ts
Applicants should be aware of the fraudulent lenders available online. They charge an upfront fee for approving the MSME loan online. However, any reputed digital lending platform will never ask for an upfront fee, instead, it will charge a minimal percentage after loan disbursal.
Applying for MSME loan online from multiple lenders can harm an applicant’s credit score.
Applicants must ensure that all their pending debts are cleared before applying for MSME loan.
Many small business enterprises face issues due to low access to funds that hampers the growth of their business. Indifi is a leading digital lending platform that offers MSME loan to the manufacturers sans any collateral and at the most affordable interest rates. They offers loan with flexible repayment schedules and without any hidden charges. All this makes the repayment process quite convenient for the applicants.
Who is eligible to apply for an MSME loan?
MSME Loan are prone to financial risks, so only those who meet the eligibility criteria can get them. However, in most cases, small and medium-sized business owners can get their loan applications approved easily.
In general, businesses from both the manufacturing and service sectors are eligible to apply for MSME loan. But, the limitations are different. For instance, micro, small, and medium-sized businesses belonging to the manufacturing industry can get up to Rs. 25 Lakhs, Rs. 5 Crore, and Rs. 10 crore, respectively.
Similarly, the micro, small, and medium-sized businesses belonging to the service sector are eligible to get up to Rs. 10 Lakhs, Rs. 2 Crores, and Rs. 5 Crores, respectively.
How to calculate MSME loan EMI?
If you are a small business owner who wants to borrow money for funding your start-up or organization, learning to estimate the EMI you will pay every month can be beneficial for you. You have several ways to calculate MSME loan EMIs. The most common formula used is:
E = P * r * (1+r) n / (1 + r) n-1Here, ‘E’ is the EMI amount you must pay every month, ‘P’ is the principal amount of the loan, ‘r’ is the interest rate, and ‘n’ is the repayment tenure.
How to use an MSME loan calculator?
Most online business loan emi calculator calculates MSME loan EMIs by using the standard formula. So, to use any standard online business loan calculator, you will need to provide the following values: the principal amount, the interest rate, and the tenure.
Suppose you have borrowed Rs. 1 Lakh at an interest rate of 3% per annum, with a repayment time of three years. You can calculate the EMI amount you must pay each month using an online business loan calculator, You can also check the total amount you will be paying.
Also, the online loan calculators can show you the total amount you will be paying to the lender.
Why use an MSME loan calculator?
Besides helping you estimate the monthly EMI amount, most online business loan calculators come with many other benefits.
- You do not need to calculate the EMI amount manually
- Visually Appealing
- Helpful for Financial Planning
Most people these days refrain from using pen and paper for calculations. If you are one of those people, online business loan calculators can save your time as you do not have to calculate the EMIs by yourself. Also, you can get the advantages of fast and accurate calculations.
Most online business loan emi calculators are visually appealing as they consist of different charts and diagrams, such as pie charts, bar graphs, etc.
One of the reasons why people use an online business loan emi calculator is that it helps them make tough financial decisions involving large sums of money.
These are just a few advantages of using an online business loan calculator to estimate the amount of money you will be paying every month as EMI for repaying your business loan.
There are many ways to calculate MSME loan EMIs. So, whenever you borrow money for funding your small business or start-up organization, do not forget to estimate the EMI you will be paying every month. It will help you make better financial decisions. You can do it easily using online business loan calculator.
MSME Loan Frequently Asked Questions
- What is the difference between SME and MSME Loan?
- Which documents are required to get an MSME loan?
- What is the maximum term limit for MSME loan?
- How should the loan funds be optimally utilized?
- What is the interest rate for a MSME loan?
- What is the processing fee for MSME loan?
- What determines my sanctioned loan amount?
Both terms are the same. SME stands for small and medium enterprises. Whereas, MSME stands for micro, small and medium enterprises
Documents like Bank Statements for the last 9 months, PAN Card copy, Adhaar Card copy, Business Registration Certificate, GST Filing, Drug License, Trade License, TIN, and VAT Registration are required for this purpose.
The maximum term limit for the MSME loan is 36 months.
An enterprise can divide the funds wisely in raw material procurement, working capital optimisation, and inventory management.
The interest rate starts from Rs. 50 per day or 1.5% per month, evaluated on a reducing balance.
One time processing fee for a business loan is around 2% of the sanctioned loan amount.
Your credit rating, business profits, and revenues will determine your final loan amount.