MSME sector is one of the key drivers in the Indian national economy that accelerates its growth. According to the Government of India, in 2020, it contributed about 45% of the country’s total industrial output and 40% to its exports. But still, there are many questions around the ease of doing MSME business and finances. Some of the prominent questions that have been around are – How to apply for an MSME loan? MSME loan Interest rate? MSME business loans Schemes?
Thus in this article, we try to answer all those questions and guide you through the process of application.
Reserve Bank of India defines an MSME loan as a form of credit extended to micro, small, medium businesses in need of financial help. MSME Loans are offered at competitive interest rates with flexible tenures. Some banks also provide these loans with a variety of collateral for the borrower to choose from.
Funds from MSME loans can be utilized for working capital requirements, improving cash flows, business expansion via increasing raw material inventory, purchasing equipment or expanding the workforce, buying equipment and machinery, and a lot more as per your business requirement.
Guide to Apply for MSME loan
Analyze Your Business Requirements
Before applying for an MSME business loan, it is imperative that one determines the exact business needs. This will help you plan out your clear financial goals, business requirements for the short term and long term, and why you are applying for an MSME Loan. Once you ascertain this, your loan proposal gets simplified. Businessmen need to pick their preferred loan type like a working capital loan, machinery loan, or a top-up loan according to their preferences.
Which bank is best for MSME loan?
Nowadays micro, small, and medium enterprises have the liberty to choose financiers from various options. Businessmen shall select that lender that offers his business the variation of terms and conditions while applying for an MSME loan. Business owners must analyze their lending partner’s interest rate, terms and policies, eligibility criteria, and the EMI amount. Businessperson shall apply for an MSME loan only after acquiring considerable information about the terms and conditions of the loan
Apply for MSME Loan Online
In today’s digital world Micro, Small, and Medium enterprises can also apply for MSME loans online. After proper research about the preferred financier business can apply for a loan online. The following are the documents that are required by the financial institutions while applying for loan online.
- Name of the Enterprise
- Date of Incorporation
- Registration number
- Business address
- Project report
- Aadhaar card
- PAN card
Submit Relevant Documents
Along with the duly filled application form business is also required to submit various documents for the verification process.
- Identity proof : Individual can submit their Aadhar card, PAN card, Driving liscense or any other Identity proof
- Address proof : One can send Electricity bill , ration card, lease agreement as his/her address proof
- Business proof : Businesses can provide registration certificate, memorandum of association (MOA) or articles of association as business proof
- Financial document of business : Business can provide their last year’s balance sheet, profit and loss statement , Income tax return (ITR) of the last to years and bank statement of last 6 months are also accepted as financial documents.
To get quicker approval keep the documents ready beforehand. Financial institutions require the borrowers to upload scanned copies of the documents while applying for loans online.
Receive your fund
You will receive your funds once all the documents are verified by the financial institution. The processing time for loan disbursement is different depending upon the financial institution’s policy.
If you have any queries regarding the MSME loan process or want to apply for MSME registration you can contact us at +91 7021672451 or you can write to us at firstname.lastname@example.org
How can we help you with?
Udyamregistration.org.in is a private consultant. We help small-scale business owners in getting MSME registration / Udyam registration / Udyog Aadhaar registration online, in a quick and easy way. We started with the simple idea that doing business in India should be easy.
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By making it easier to do business, we hope to unleash Entrepreneurship and help small businesses compete effectively. We help you to register your business anywhere in India to manage legal compliance at your fingertips.
During our journey, we have served Start-up’s and MSMEs across the length and breadth of India, starting from Leh to Tamil Nadu and Gujarat to Arunachal Pradesh.
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