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MSME Loan for New Business - Check Eligibility & Interest Rate

  • 05-Mar-2022
MSME Loan for New Business - Check Eligibility & Interest Rate

What is MSME Loan? 

MSME Loans stands for Micro, Small, and Medium Enterprises. It is an unsecured loan provided by various financial institutions and NBFCs to help an applicant to buy and expand their business. It involves working capital requirements, purchasing raw materials, equipment, and machinery, Payment of salaries, rent, or any other daily expenses, investment in Fixed assets, other financial purposes, and management of cash flows. 

MSME unsecured business Loan Eligibility Criteria: 

Eligibility for MSME loan for a new business, an applicant can get such type of loan for the evolution of basic structure to meet the business necessities such as – purchase machinery and new equipment, or daily equipment capitals. Eligibility depends on several factors i.e., business turnover, repayment history, age of an individual, creditworthiness and total work experience, etc.  

  • The Minimum age of an individual is 22 years and the maximum is 60 years of age.
  • Business continuity of minimum 2 years.
  • Audit by registered Chartered Accountant for minimum 1 year.
  • Minimum Business turnover must be 90,000.
  • Partnership firms, Limited Liability Partnerships, Trusts, Private or Public companies, Proprietor concerns of an Individual.

Details of MSME Loans: 

  • MSME unsecured business Loan is very easy to get, the procedure is flexible and easy-going.
  • An applicant can get MSME Loan without pledging any security or collateral.
  • It aimed to help out small businesses or raise their production.
  • There is less paperwork and the disbursal of the loan amount is very fast.
  • MSME Loans have a low rate of interest.
  • Generally, there are no pledges for the long-term. MSME Loans are used by the business for short-term needs.

MSME Loan Interest Rate 

INTEREST RATE 8.50% Onwards 
LOAN AMOUNT  Up to 2 crores 


Compare MSME Loan Interest Rate offered by Top Banks 

Bank of India 8.00% 
Canara Bank 8.50% 
HDFC Bank Ltd. 8.50% 
Indian Bank 8.00% 
Axis Bank Ltd. 8.00% 
Punjab & Sind Bank 8.50% 
Bank of Maharashtra 8.50% 
Central Bank of India 8.00% 
Indian Overseas Bank 8.00% 
Bank of Baroda 8.50% 
UCO Bank 8.50% 
Punjab National Bank 8.50% 
Union Bank of India 8.50% 
State Bank of India 8.00% 
United Bank of India 8.00% 
Standard Chartered Bank 13.50% 
SIDBI (Small Industries Development Bank of India) 8.00% 

Also read: - Facts about business loans and their benefits

Documents Required of an individual 

  • 2 passport size – photographs
  • Aadhar Card + Passport
  • Copy of PAN Card
  • Permanent address proof and also if rented
  • Bank statement of salary account of last year.
  • Sanction letter and loan schedule
  • ITR with computation of income of last 3 years (if file)
  • Cheque in favor of the bank for processing fee
  • Property documents with MAP and Chain + ATS
  • Appointment letter and salary slip of last 3 months
  • Order in hand
  • Machine quotation

Purpose of MSME Loans 

 The borrower should get MSME Loan for various purposes when an applicant wants to: 

  • Expand their business.
  • Financing for advertising and marketing purposes.
  • Buying a factory
  • Purchasing raw materials to fulfill the capital requirements of the company.
  • To pay debts, employee wages, and bills.
  • Purchase land to start a new business.
  • Need money for the renovation of the firm.
  • Purchasing factory supplies such as machine equipment, etc.

How to Apply for an MSME Loan Online? 

Given below are the steps to apply for MSME Loan Online: -  

  1. Firstly, Select the appropriate schemes in accordance with your needs. When selected, visit the official website of your favored investment partner.
  2. Click and start filling in the application for the loan and all the required necessary details i.e., Name, Address, Contact number, Date of Birth, E-Mail ID, etc.
  3. Then, go to the next page and enter all the information about a business such as Business turnover, Nature of business, PAN number, Existing credit details, Bank account, and GST No.
  4. Make sure that all the filled information is correct to keep away from rejection.
  5. Then, submit the application form.
  6. Representatives will touch you soon for other formalities if principles match your profile.

Therefore, planning to get an MSME Loan to compare Bank's and NBFCs interest rates to get the best rates on loans. Apply through financeseva

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