What are MSME Loan eligibility criteria in India? Do they differ from one state to another?
MSME – Micro, Small & Medium Enterprises a term introduced by the Indian Government in 2006 in agreement with the MSMED – Micro, Small & Medium Enterprises Development. These enterprises are considered as the backbone of the Indian Economy and the Government of India has come up with numerous opportunities from financial to training, from set up to follow up and supporting such industries. To know more refer to – https://www.msme.gov.in/know-about-msme
Government of India’s Definition for MSME:
Courtesy: Gazette notification in this link – https://msme.gov.in/sites/default/files/MSME_gazette_of_india.pdf
MSME Loan Eligibility criteria in India
Every business has financial obligations, almost 85% of the businesses are looking for a business loan either from a government bank, private bank or NBFC’s.
Before going ahead to find a loan consultant to help you, just do research to understand what is the stance of your business to acquire a MSME Loan. Try to learn the MSME loan eligibility criteria in India, all the more understand the major differences between a startup and an MSME and a large corporation.
Many a times we get Startup’s coming forward to apply for MSME loans and this will not work in their favour. Startups believe that government has announced a scheme for MSME’s and they will qualify. It doesn’t work that way.
Before applying check for MSME Loan eligibility criteria
| Nationality | Indian |
| Number of years in Business | 3+ years |
| CIBIL Score | 685 or higher the better |
| Tax | To be filed on time |
| Bank Account | Maintain a Minimum daily balance |
| Discipline | No cheque bounces, No EMI’s deferred |
| Reason | An apt reason for business loan |
These are the basic factors considered by banks in approving business loans.
You will require to submit the following documents once you are eligible:
1. KYC documents – Aadhar Card, Driving License, Passport, Voter’s Id or any Identification proof (Original & Photocopies)
2. PAN Card
3. Business Documents proving Ownership (MSME Certificate)
4. All Financial Documents relating to business
If you are looking to successfully acquire an MSME Loan, Prudent Capital can assist you through this daunting process, we offer end-to-end services in helping you secure your business loan.
You are just a click away from checking your eligibility for an MSME Loan in India
FAQ’s
1. How soon can I get an MSME Loan approved?
a. Loans can be approved as fast as in 7 business days subject to all documents being intact and compliant. The speed of approval depends on the financial strength of business, collateral provided, experience of the promoter in the business amongst other factors.
2. Can I qualify for an MSME loan with 2 years vintage?
a. Yes, you can qualify for an MSME loan with two-year vintage subject to financial parameters being strong.
3. Can I secure an MSME loan with government banks?
a. Yes, PSU banks are active in sanctioning MSME loans. Once we appropriately present the nature of the entity, scheme under which the loan is requested and the eligibility, Public Sector Banks will be quick to sanction the loans.