MSME Business Loan- MSME business loan in 59 minutes

MSME Business Loan i.e. Micro, Small and Medium Enterprise Loan is a business loan that can be used by micro, small and medium entrepreneurs to manage their business. Business loan is given by banks and financial institutions to micro to medium-level entrepreneurs as per their time to time needs.

Entrepreneurs take business loan from banks and financial institutions as per their convenience and sometimes handle their faltering business and sometimes fulfill the technical and other needs required to grow their business. This type of loan is very beneficial for entrepreneurs.

MSME business loan is very useful in times of need

Often there are ups and downs in business. Sometimes such situations also arise that the businessman needs financial help. To fulfill these needs, help is needed from banks. For this, a system has been developed which is called MSME Business Loan.

Under this, the businessman easily gets money to fulfill his needs and can easily run his business on track. At the same time, the financial institutions that give loans to business men also get business. Overall, the objective of this MSME business loan is to increase earnings by taking the business forward and contribute to the country’s economy.

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Which needs are fulfilled?

With MSME business loan, the entrepreneur can fulfill the business needs of his business. With this loan, the entrepreneur can fulfill his working capital, capital expenditure and other needs.

Why was there a need for the MSME loan system?

The government has created the MSME system to promote micro, small and medium entrepreneurs to end the rising unemployment in the country and increase self-reliance. Strengthening the country’s economy with this system was also one of the basic objectives. To create this system, the Micro, Small and Medium Enterprises Development Bill-2005 was introduced in the Parliament on May 12, 2005 by the then government.

After being passed by the Parliament, the then President signed this proposal and made it the MSME-2006 Act. But it was most popular after 2014 and the entrepreneurs took the most advantage of it after the Corona period when the whole world was hit by the Great Depression and after that people needed money to set up their own businesses.

There are two types of enterprise sectors under MSME. The first of these is

1. Service sector: Under this, there are entrepreneurial sectors that run their business by providing services.

2. The second is the entrepreneurial sector doing manufacturing: This type of sector includes the sectors that manufacture or produce something in the business.

Required documents for MSME business loan

The applicant needs some documents to take MSME business loan. These are the same documents which are used while taking any type of loan, some of them are as follows:-

• Aadhar card
• Identity certificate issued by the government, voter ID, passport, driving license etc.
• Government identity certificate of your residence. Land registry, deed etc.
• Age related certificate High school certificate, Aadhar card, voter ID, PAN card etc.
• PAN card
• One year bank statement of the bank account related to your business.
• Registration certificate of your business.
• If your business is already running, then copy of two years balance sheet.
• GST certificate
• No objection certificate i.e. NOC from departments related to your business.
• Other documents required by your preferred bank and financial institutions, check them first.
• If you make them available on time when asked, your loan will be passed quickly.

What are the schemes for MSME loan?

During the great depression of the Corona epidemic, unemployment is increasing and business has slowed down. The objective of the government is to promote self-employment instead of jobs and to rescue the struggling business from the crisis and make it afresh.

For this, the government is promoting MSME business loan. Some of the schemes under which this type of loan is given by the government are as follows:-

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• Mahila Udyam Yojana
• PMEGP i.e. Prime Minister Employment Generation Program
• Pradhan Mantri Mudra Loan
• Micro Credit Plan
• Equipment Finance Plan
• Mudra Card
• CGTMSE
• Credit Guarantee Fund

MSME loan can be taken under all these schemes. If someone wants to get a loan to expand the business, then many financial institutions provide a loan of Rs 10 lakh without any mortgage as soon as possible.

Some special features of MSME loan

There are some special features of MSME business loan, from which entrepreneurs can get special benefits. Some of these special points are as follows:-

1. Interest rate: The most special point of MSME business loan is that the interest rate of this type of loan is different and the interest rate is charged by banking and non-banking institutions as per the business requirements.

2. Loan amount: There is no minimum limit of interest amount in this type of loan, while its maximum amount is up to one crore rupees which can also increase as per the business requirements.

3. Mode of payment and period: The mode of payment is very easy. Also, the period of payment is fixed from one year to 5 years, but this period can also be reduced or increased with the mutual consent of both the parties.

4. Subsidy: In this type of loan, subsidy is offered by some selected institutions. The applicant has to investigate about this.

5. Fee: Many types of fees are definitely charged in this type of loan. For example, processing fee is charged from 0 to 4 percent of the loan amount. Foreclosure fee ranges from 0 to 5 percent of the outstanding loan amount. Part payment fee ranges from 0 to 4 percent.

6. Credit facilities: Facilities like working capital loan, bill discounting, overdraft, cash credit, letter of credit, bill purchase, merchant of cash advance etc. are available.

7. Registration in MSME is completely free and once registered, your registration is valid for five years.

8. To get MSME business loan, the applicant’s CIBIL score should be very good. The better your CIBIL score, the sooner you will get the loan. Therefore, the applicant has to keep his CIBIL score good. Your CIBIL score should not be less than 750.

9. If you have taken any loan earlier, then its payment record should also be good, otherwise there may be a problem in getting your application approved.

10. Apart from this, if you have not made any mistake in the payment of any kind of loan taken earlier, then your loan will not be approved.

How to apply for MSME business loan?

To apply for MSME business loan, the applicant has to check various loan options according to the needs of the business. After this, you have to choose the option of your need.

Step 1

First of all you have to go to the official website of MSME and then click on Business Loan on the home page and follow the procedure given for business loan.

Step 2

After choosing the option of your need, you have to fill all the necessary information. In this, you have to fill the loan amount. You have to tell the employment status at present. You have to tell the annual turnover of your business. You have to write the name of the city in which you live. You have to give details of how many years your business has been running. You will also have to give your mobile number.

Step 3

After this, you have to tick the given box to agree to the terms and further click on Unlock Best Offers.

Step 4

Apart from this, you will have to provide the type of company, nature of business, what kind of business it is and what it is related to. Details of total annual profit. Bank account number. If you have taken any other loan, then its EMI. You will have to provide many details including your full name, gender, residential address with pin code, PAN card number, date of birth, email ID.

Step 5

After submitting all the information, the bank officer will contact you on the mobile phone provided by you and meet you to complete the further process.

Step 6

After this, when your loan is approved, you will be informed and the approved loan amount will be transferred to your account within the stipulated working days.

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