MSME (Micro Small Medium Enterprise) or SME (Small Medium Enterprise) loan is a credit facility provided to small scale businesses. The MSME loan scheme offers you the opportunity to improve the financial status of your business alongside purchasing advanced equipment, machinery, stock, paying salaries to employees etc. Moreover, opting for this loan can help you enlarge your business.
MSME (Micro Small Medium Enterprise) loan is ideal for business entrepreneurs running small or medium scale enterprises. According to the MSMED or Micro, Small and Medium Enterprises Development Act of 2006, the Indian Government launched the MSME enterprises that are usually involved in developing, manufacturing and processing goods or services.
MSME loan interest rates offered by the top Indian banks are given in the table below:
|Name of the Bank||Interest Rates (Per Annum)|
|HDFC Bank||11.90% – 21.35% p.a.|
|State Bank of India (SBI)||7.65% p.a. onwards|
|ICICI Bank||13% p.a. onwards|
|Axis Bank||14.25% – 18.50% p.a.|
|Central Bank of India||11.25% p.a. onwards|
|Indian Bank||9.75% p.a. onwards|
|Syndicate Bank||Up to bank|
|UCO Bank||8.85% p.a. onwards|
|United Bank of India||10.25% – 16.25% p.a.|
|Punjab National Bank||Up to bank|
Indian Government have launched some MSME loan schemes to provide financial support to the small scale businesses ruined during COVID-19. The names of those schemes are:
The following are the steps to apply for MSME loans:
The vital features of MSME or Micro Small Medium Enterprises loan are discussed below:
The favourable factors that will make you go for this loan are:
Financial institutions or loan providers have given some necessary eligibility conditions for individuals or companies to follow before taking MSME loans. They are:
You need to submit the following documents for an MSME loan:
Follow these steps to register as an MSME:
Go to Udyog Aadhaar Memorandum (UAM) portal.
Scroll down and click on ‘For New Entrepreneurs who are not Registered yet as MSME or those with EM-II’ option.
A registration form will open. Fill it out.
Scroll down. Click on ‘Validate & Generate OTP’.
An executive will go through the details and approve your application.
If your application gets approved, you will receive a certificate for MSME registration.
The Indian Government declared an updated definition of MSME on May 13 2022. Following is the newly organised definition:
|Investment||Does not surpass Rs. 50 crore||Lesser than Rs. 10 crore||Lower than Rs. 1 crore|
|Turnover (Total Sales)||Can be up to Rs. 250 crore||Maximum limit is Rs. 50 crore||Lesser than Rs. 5 crore|
MSME loan has been an incredible helping hand, particularly for small enterprises. It provides them with adequate financial support for improving production, thereby enhancing the business. But before taking any decision, always make a proper plan and follow the necessary criteria mentioned above.
Ans: Unfortunately, yes. The salaried individuals desiring to set up a new business must submit their previous year’s GST returns.
Ans: You don’t have to bear any charges for MSME registration fees alongside taking an MSME certificate.
Ans: The maximum validity period for a Micro Small Medium Enterprise (MSME) certificate is 5 years.
Ans: Self-employed individuals, business entrepreneurs, Micro, Small and Medium-scale Enterprises, partnership businesses, LLP, and sole-proprietorship organisations are eligible to take this loan.
Ans: Although it is not compulsory, having a credit rating facility can help borrowers get the advantage of lesser processing charges, reasonable interest rates, etc.
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