How to get a Loan for Business?
MSME stands for micro, small and medium enterprises, sometimes it is also shortened to SME for small and medium enterprises. But, in essence, MSME and SME Loans are the same and are offered to businesses that fall under these two categories. Mostly, these loans are given to startup owners, small business owners and women entrepreneurs on a short-term basis. The duration of MSME / SME loans varies from lender to lender. As MSME loans are unsecured MSME / SME Loanss, there are some minimum eligibility requirements in order to reduce the risk for lenders.
Classification of Business Loans
Micro Business
Investment in Plant and Machinery or Equipment: Not more than Rs.1 crore and Annual Turnover ; not more than Rs. 5 crore
Small Business
Investment in Plant and Machinery or Equipment: Not more than Rs.10 crore and Annual Turnover ; not more than Rs. 50 crore
Medium Business
Investment in Plant and Machinery or Equipment: Not more than Rs.50 crore and Annual Turnover ; not more than Rs. 250 crore
Benefits of MSME Loans for New & Exisiting Business
- Small businesses are the backbone of the economy
- 1% less on overdraft
- Small businesses are the backbone of the economy
- Collateral free & cheap loan in credit linked guarantee scheme
- Up to 50 % off on patents
- Protection of delay in the payments & Dues
- Reimbursement of expenditure for registration and expenditure
- Easier & cheaper licenses
- Collateral free & cheap loan in credit linked guarantee scheme
Eligibility Criteria for MSME / SME Loans
Debt Counsellor has kept the eligibility requirements to the bare essentials in order to process MSME / SME loans faster. We do not require too many documents or unnecessary paperwork that can hold-up the loan approval process.
- An established business that has been in operations for more than 6 months.
- A minimum turnover of ₹ 90,000 or more in the 3 months preceding your loan application.
- The business should not fall under blacklisted / excluded list for SBA finance.
- The physical location of your enterprises should not be in the negative location list.
- Trusts, NGOs and charitable institutions are not eligible for small business loans.
Do You Have Any Questions?
Have a question in your mind, we have your answers ready. Please check the below FAQ's!
What is the advantage of MSME loans by Debt Counsellor?
We offer MSME loans with quick turnaround time and personalized loan terms.
What is the difference between MSME loans and SME loans?
There is no difference. MSME stands for micro, small and medium enterprises whereas SME stands for small and medium enterprises. MSME loans are sometimes termed as SME loans.
What is the turnaround for MSME loans by Debt Counsellor?
If all your documents are in order, we offer a turnaround time of 1 to 3 working days.
What are the documents required for getting a quick MSME loan?
You need proof of business registration, 12-month bank statements, PAN card details, GST and IT filings and KYC info in digital format.
How can I repay my MSME business loan faster?
You can repay your business loan two-times faster by opting for bi-weekly installments.
What determines my sanctioned loan limit and how can I increase it?
Your credit rating and the financial health of your business i.e. revenues and profit margins are a deciding factor in determining the loan amount. You can increase it by improving the credit rating through the settlement of sundry debts and optimizing operating expenses.
How can I utilize an MSME loan fully?
You can diversify the use of MSME loan funds, utilizing them for working capital optimization, inventory management and purchase of equipment.
How to renew my MSME loan after repayment/prepayment?
You can renew your loan for the same sanctioned amount by paying the processing fee (2% of the principal amount).