MSME Loan Eligibility criteria:
- Minimum 1 year of operational history
- Promoter age 22 and above
Documents Required for MSME Loan:
- Pan card
- Aadhaar card
- Passport size photos
- 1 year bank statement
- Last 3 years’ Income Tax Returns
- Factory Electricity Bills
- Home Electricity Bills
- CMA Reports of the last 7 years
- Project Reports
- Office Rental Agreement (if rented)
- GST Certificate
Why Should Enterprises go for MSME Business loan?
The MSME sector is one of the largest sources of industrial output and employment in India. Approximately 40% of the total country’s exports and 45% of the total industrial production come from this sector. Therefore, the MSME sector has always exhibited a high demand for business finance.
The inability to secure finance at the right time is one of the biggest challenges faced by various small and medium-scale enterprises in the country. However, non-banking financial companies (NBFCs) offer a promising alternative for manufacturers seeking immediate business financing. Online submissions have made the MSME loan process very easy and streamlined.
Different Ways to Utilize Funds from a Business Perspective:
- Purchase of plant and machinery to enhance production capacity and efficiency.
- Securing sufficient raw materials to meet production demands and maintain inventory levels.
- Optimizing working capital to ensure smooth business operations and cover short-term expenses.
- Implementing effective marketing strategies to expand market reach, attract new customers, and increase sales.
- Hiring and training qualified personnel to support business growth and enhance operational efficiency.
Do’s and Don’ts While Applying for MSME Loans Online:
Here are some simple tips that will increase the chances of securing an SME/MSME loan for the applicant by reducing the risk of rejection.
Do’s
- The applicant must carefully review and cross-check all the mandatory documents required for the MSME loan application process.
- Applicants should check their credit score as some digital lenders consider it while evaluating MSME loan applications.
- Calculating the actual MSME loan requirements in advance will be a prudent step for the applicants to ensure they borrow the appropriate amount.
- Applicants should have a well-structured and viable business plan that outlines the intended use of the loan funds and demonstrates the potential for business growth.
Don’ts
- Applicants should be vigilant against fraudulent lenders operating online. These lenders may demand upfront fees for approving MSME loans. However, reputable digital lending platforms will never ask for upfront fees; instead, they may charge a minimal processing fee after loan disbursement.
- Applying for MSME loans online from multiple lenders simultaneously can negatively impact an applicant’s credit score. It is advisable to apply to lenders selectively and strategically.
- Applicants must ensure that all their pending debts are cleared or paid before applying for an MSME loan. This demonstrates financial responsibility and increases the likelihood of loan approval.
Indifi: A Reliable Digital Lending Partner for MSMEs
Many small business enterprises face challenges due to limited access to funds, which hinders their growth potential. Indifi stands out as a leading digital lending platform that offers collateral-free MSME loans at competitive interest rates. They provide flexible repayment schedules and transparent terms, making the loan process convenient and accessible for applicants.
Eligibility To Apply for a MSME Loan
MSME loans are prone to financial risks, so they are only granted to businesses that meet the eligibility criteria. However, in most cases, small and medium-sized business owners can secure approval for their loan applications with relative ease.
Generally, businesses from both the manufacturing and service sectors are eligible to apply for MSME loans. However, the maximum loan amounts vary between the two sectors. For instance, micro, small, and medium-sized businesses in the manufacturing industry can receive up to Rs. 25 lakhs, Rs. 5 crores, and Rs. 10 crores, respectively.
Similarly, micro, small, and medium-sized businesses in the service sector are eligible to receive up to Rs. 10 lakhs, Rs. 2 crores, and Rs. 5 crores, respectively.