Documents Required for MSME Loan

Documents Required for MSME Loan

Features and Benefits of MSME Loan

Micro, Small and Medium Enterprise (MSME) loan is a type of business loan given by banks or lending institutions to SMEs, MSMEs and start-up enterprises. Let us tell you that many banks and loan institutions provide SME and MSME loans to their customers without collateral or any security.

What is MSME?

Let us tell you that Micro, Small and Medium Enterprise is called MSME in short. Let us tell you that recently the government has changed the definition of MSME. Let us tell you that in the new transformation of MSME, all the low-grade enterprises, micro, small and medium industries will come.

There are two sectors in MSME. Manufacturing & Service Sector

The sector in which the work of providing service is done is called the service sector and in which the work of product manufacturing is done is called manufacturing sector.

What is the Definition of MSME?

Following is the definition of MSME

Definition of Micro Industry

Industries with investment up to 1 crore and turnover up to 5 crores in both manufacturing and service sectors have been given the status of micro-enterprise.

Definition of Small Scale Industry

An enterprise with an investment of up to 10 crores and a turnover of 50 crores in both the manufacturing and service sectors is considered as a small business unit.

Definition of Medium Industry

Let us tell you that in both the manufacturing, service sectors, the business with investment of up to 30 crores and turnover of 100 crores is considered as medium enterprise.

What is MSME Loan?

What is MSME Loan? - Documents Required for MSME Loan

In order to ensure that the business of the Micro, Small and Medium Enterprise (MSME) sector is run properly, the government is trying to provide loans to MSME businessmen.

The loans given to MSMEs are called MSME loans. MSME loans can be taken from all government and private banks as well as NBFC companies.

How to get MSME loan?

  • Tell all of you that the way other loans are available, MSME loans are available in the same way. That is, applying for MSME industry loan also has to be done through proper channel by following a certain procedure. Before applying for the loan, make sure to check the eligibility and collect the necessary documents.
  • Now after this you have to apply for MSME loan. You can apply for MSME loan both online and offline.
  • How to apply for MSME loan depends entirely on the lending bank or NBFC. Businessmen should not face any problem in applying for loans, that is why the government has also given the option to apply online for all these MSME loans.

MSME Loan – Features, Fees and Interest Rate

Interest Rate Depends on Business Requirements
Loan Amount  There is No Minimum Loan Amount, While the Maximum Loan Amount is up to ₹1 Crore which can be increased as per the business requirements.
Pay Period  12 Months – 5 Years
Collateral Not Required for Unsecured Business Loan.
Processing Fee 0 to 4% of the Loan Amount
Foreclosure Fee 0 to 5% of the Outstanding Loan Amount
Part Payment Fee From 0 to 4%
Loan Cancellation Fees Vary From Bank to Bank
Subsidy The Subsidy is offered by selected lending institutions
Credit Facilities Working Capital Loan, Bill Discounting, Overdraft, Cash Credit, Letter of Credit, Bill Purchase, Merchant of Cash Advance etc.

Who gets the MSME loan – what is the eligibility?

First of all, it is necessary to check the eligibility to apply for MSME loan. Because without eligibility you cannot apply for any kind of loan. However, there is not much difference between normal loan and msme loan eligibility.

  • The applicant age of msme loan should be between 18 years – 75 years.
  • Your personal business should be at least 3 years old to take msme loan.
  • You should have CA certified / audited balance sheet.
  • The Nature of the business for which the loan is being applied for is Proprietorship / Partnership / Private Limited Company / Limited Company, you must have some or the other of these.

Documents Required for MSME Loan

  • Aadhar card
  • Identity certificate
  • Residence identity certificate
  • Age proof
  • Pan card
  • Bank statement of last 12 months
  • Business registration certificate
  • If your business is first then you have to provide balance sheet copy of last 2 years profit and loss.
  • GST Certificate
  • No Objection Certificate (NOC)

Under which scheme MSME loan is available?

The main objective of the MSME loan given by the government is to create an environment of self-employment in the country. Because of this, all such schemes. Under which MSME loans are given. Let us tell you that in whichever government loan schemes MSME loans are available, those schemes are as follows.

So now you have come to know that MSME loan can be obtained under all these schemes.

Also Read: The Ultimate Guide to MSME Registration Process [2020]

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