Who Can Apply for an MSME Loan?

MSME is an abbreviation for micro, small, and medium enterprises; it is also known as SME for small and medium enterprises.However, MSME and SME loans are essentially the same and are available to businesses that fall into these two categories.The duration of MSME/SME loans varies depending on various factors, including loan type lender.As some financial institutions offer collateral-free MSME loans, there are some minimum eligibility requirements in place to reduce the risk for lenders.

If you are looking to apply for a business loan, here you can find out all about MSME loan eligibility in India.

msme loan

Let’s start with why you should consider an MSME loan for your business:

  • Transition Quickly from Planning to Execution

Because of the lightning-fast turnaround time from NBFCs like Kinara Capital, you can move from planning to execution in days rather than weeks or months.With an MSME loan, you can quickly advance in product expansion, increase production, and expand your supply network.

  • Maintain Control of your Company

MSME/SME loans from NBFCs like Kinara Capital are unsecured, which protects your valuable assets in the event of loan default.Similarly, the lender doesn’t take control of the equipment purchased in exchange for investment, allowing you to maintain complete control over your valuable business at all times.

  • Improve your Company’s Capital Management

MSME/SME loans, specifically working capital loans, can be used for a variety of things.You can use them to expand your operations by purchasing plant and machinery or opening at a new location, or you can use them to streamline your working capital and general cash flow.These loans assist you in balancing your company capital through short-term investments that are easily repaid.

  • Increase your Market Credibility

You can give your business a much-needed boost and thus improve your profitability.This, in turn, will reflect in your books, generating goodwill and credibility for your company in the market.Credit rating agencies will take note of your improving prospects and raise your company’s credit rating accordingly, paving the way for more investment and business finance.

MSME Loan Eligibility

Your business needs to meet the below-mentioned eligibility criteria to apply for an MSME loan:

  • Business should be part of the manufacturing, trading or service sector.
  • The financial institution should be operational in your pin code.
  • Total monthly turnover 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 the chosen financial institution/bank

Entities that are eligible to apply for MSME loans include:

  • Individuals, SMEs, MSMEs, business owners, women entrepreneurs, self-employed professionals
  • Private or public limited companies, sole proprietorships, partnerships, and limited liability partnerships engaged solely in trading, services, or manufacturing are also eligible.

Documents Required for an MSME Loan

To complete the KYC process to avail of an MSME loan, you would require to submit some personal and business documents.Aadhaar Card, Udyam registration number, business registration proof, and 12 months’ bank statements are among the documents required.

Get the Required Financial Aid for Your Small Business

NBFCs like Kinara Capital provide MSME loans in less than 24 hours. No property collateral is required for these loans, and they offer multilingual customer services at your doorstep.You can visit their website and check their MSME loan eligibility criteria to apply for a business loan. It’s a quick and simple process that can be completed online. So, grow your small business with the required funding and achieve all your business goals without any hassle or financial roadblocks!

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