Features of MSME Loan
- With a digital application process, financial institutions can provide collateral-free MSME loans in just 24 hours.
- Multi-lingual customer support is available throughout the process with doorstep customer service.
- Small businesses can also apply loans to meet a range of business expenses and to expand their operations.
- Business people can apply for MSME Loan starting with a quick
Benefits
MSME/SME loans offer various benefits to small business entrepreneurs, including:
- They can support the development and extension of business operations by adding machinery, equipment, and other necessities
- They can be easily availed of and, in Banks’ or financial institutions’ cases are issued without providing any form of security or collateral.
- Banks or financial institutions’ MSME loans are fast and flexible and require minimal documentation.
- Banks or financial institutions provide easy and hassle-free repayment options.
- Banks or financial institutions’ MSME loans have a short turnaround time. You may get your loan amount in just 24 hours after approval.
- Our MSME loans make allowances, evaluating the creditworthiness of a business by considering various factors instead of relying solely on credit history or score.
MSME Loan Interest Rates
MSME loan interest rates can vary depending on the purpose and tenure of the loan, as well as the lender’s policy and the borrower’s credit history. Financial institutions’ interest rates start at 21% per annum and are calculated on a reducing rate basis, meaning you can pay interest of only 1% monthly. Interest is calculated on a reducing rate basis means that as your outstanding loan amount goes down with repayments, so will your interest outgo. Above the long term, this will reduce your EMI payment and make repayment easy and affordable.
To avail of an MSME loan from financial institutions, the first step is to ensure that you meet the essential eligibility criteria. To qualify for an MSME loan from financial institutions, you need to meet the following requirements:
- Your business must be part of the manufacturing, trading, or services sector.
- Total monthly turnover of your business should be greater than Rs. 50,000 and less than Rs. 2 crores.
- The business should fall under the list of sectors and sub-sectors serviced by Banks or financial institutions.
- Your business must run more than 2 years.
Documents Required for MSME/SME Loan
Traditional lenders like banks have a long and tedious application process and require extensive documentation for issuing an MSME loan apply. This is large because such lenders are risk-averse and consider small businesses to be high-risk borrowers who are more likely to default. This is even more so when it comes to unsecured loans or loans that don’t require any collateral. On the other hand, financial institutions have proprietary data-led back-end processes to determine creditworthiness and can offer a quick and straightforward loan process requiring minimal documentation. To apply for a business loan from Financial institutions, you will need the following documents:
- Applicant, co-applicant, and business KYC documents (ID and address proof) Applicant’s PAN card and other proof related documents.
- Business registration document
- Last 12 months’ bank statements
