How to apply for MSME Loan

How to Apply for MSME Loan / SME Loan

MSME Loan Schemes: MSME or Ministry of Micro, Small and Medium Enterprises is a branch of the Government of India. This body is responsible for the administration and formulation of rules, regulations, and laws in this sector. Presently the function of this body is in the hands of Nitin Gadkari (Cabinet Minister) and Pratab Chandra Sarangi (Minister of State).

MSME provides schemes relating to the developing enterprises and the needy in this sector. If you are looking for availing the schemes or taking MSME loan then you got to the right place. In this article, we are going to provide you with complete information on the MSME loan. The topic covered in this article are features, eligibility, services and how to apply for the MSME loans.

Key features of MSME loan

The key features of MSME loans:

  1. The base price of the MSME loan is Rs 50000 and the value can be up to 2 crores. There is a various loan scheme for small, micro and medium enterprises.
  2. Applying a loan is a lengthy and offline process. The MSME and SME loans can be applied online which makes the loan approval procedure easier and faster. The loan approval can be done in one day.
  3. The document verification and submission for MSME and SME loans have shifted to online. As it is an online process you can get the loan in 3 days of application.
  4. In the case of MSME and SME loans, there is no requirement of asset security.
  5. The interest rates for MSME loans are fair and are related to enterprise ability to do it.
  6. The repayment time of the loans is flexible. The tenure of the loan starts from 1 month to 36 months. You can pay monthly or biweekly of your loan installments.
  7. There are no repayment charges for MSME loans.
  8. There is not hidden to MSME loans.
msme-loan
msme-loan

MSME WebPortal:

1. MSME Samadhaan –

http://samadhaan.msme.gov.in/

2. MSME Sambandh –

https://sambandh.msme.gov.in/PPP_Index.aspx

3. MSME SAMPARK –

It is a digital platform for job seekers & Recruiters.

http://sampark.msme.gov.in/

4. Entrepreneurship and Skill Development Programs –

https://msme.gov.in/entrepreneurship-and-skill-development-programs

5. Infrastructure Development Programs –

https://msme.gov.in/schemes/infrastructure-development-program

6. PMEGP e-Portal –

https://www.kviconline.gov.in/pmegpeportal/pmegphome/index.jsp

7. My MSME –

http://my.msme.gov.in/MyMsme/Reg/Home.aspx

8. Udyog Aadhaar (Online Registration for MSME)-

https://udyogaadhaar.gov.in/UA/UAM_Registration.aspx

9. MSME Databank –

http://www.msmedatabank.in/

10.  MSME Grievance Monitoring System-

https://igms.msme.gov.in/

The benefit of MSME loans are:

  1. The MSME loans allow you to give a boost to your business. The time taken between planning and execution is very less. This will allow your enterprise to grow faster.
  2. As there is no asset security is required for getting loan thus your property are safe if the loan gets default.

MSME Services

The services offered by MSMEs are:

  • Industrial Motivation Campaign (IMC) of one and two days:

This service helps in identifying and motivating existing entrepreneurs. IMC for one day refers to Cluster, Spv or Factory/Industry.

  • Entrepreneurship Awareness Programme (EAP) of Two Weeks:

It helps in nurturing the skills of youth on industrial activity to establish enterprises. It also provides information on product design, quality control etc.

  • Entrepreneurship- cum -Skill Development Programme (E-SDP) of Six Weeks:

It helps in the development of entrepreneurship by product design, testing and quality control etc. it also helps in skill development of people through practical, theory and demonstration of product.

  • Management Development Programme (MDP) of One Week:

It helps in improving the decision-making abilities for higher profitability and productivity. It offers training courses of industrial management, human resource management etc.

  • Skill Development Programme (SDP) of Six Months

 

MSME Loan Eligibility

The following criteria must be fulfilled if you are applying for an MSME loan:

  1. The enterprise must be working for more than 6 months by the time of application.
  2. The enterprise must have a turnover of Rs. 90000 or more for the last three months by the time of application.
  3. The enterprise must not fall under blacklisted for SBA finance.
  4. The location of your enterprise must be in a positive location.
  5. The owner of the enterprise must fall in the age segment of 25 years to 50 years.
  6. Some banks also ask you to maintain your credit score to 750 without any default.

How to download the MSME Loan application?

To download a loan application form, follow the steps below:

  1. Visit the official website of the bank or financial institution from which you want the MSME loan.
  2. Go to the download section of the website.
  3. Look for the MSME loan form and download it.

How to apply for MSME loan?

How to apply for MSME Loan
How to apply for MSME Loan

 

Follow the steps below to apply for MSME loan:

  1. Submitting the application form:

The application form can be submitted both online and offline. Fill up all the information in the application form and submit it.

  1. Uploading documents:

Upload the digital copies of the documents asked by the financial institutions. Some of the banks generally ask for the hard copy of the documents for verification.

  1. Sanctioning of the loan

Within three days the loan application gets approved and disbursal.

The offline procedure for loan application is a lengthy one and more secured than the online one.

 

Apply for MSME Loan: https://sbi.co.in/web/business/sme/sme-loans
https://www.idbibank.in/msme-banking.asp

Documents needed for MSME Loan application

The documents needed for applying for MSME loans are:

  1. Last 12 months bank statement.
  2. Business registration proof
  3. Proprietor PAN card proof
  4. Proprietor AADHAR card proof
  5. Partnership deed copy if any
  6. Company PAN card copy

Additional information

The schemes offered by MSME are:

  1. Prime Ministers Employment Generation Programme, PMEGP

In this PMEGP scheme, the acceptable amount for the manufacturing sector is RS. 25 lakhs and for service/business sector it is Rs. 10 lakhs. The subsidy offered under this scheme for general category is 15% in Urban area and 25% in the rural area. For special category (SC/ST/OBC etc.) is 25% in the urban area and 35% in the rural area.

  1. Credit Guarantee Trust Fund for Micro & Small Enterprises (CGTSME)

This CGTSME scheme offers a loan value up to Rs. 100 lakhs if the individual MSE pays the guarantee fee to the bank.

  1. Interest Subsidy Eligibility Certificate (ISEC)

The interest rate for the credit amount is 4 % per annum working capital.

  1. Market Promotion & Development Scheme (MPDA)

This scheme is for the khadi industry. The main focus of the scheme is to increase the earning of artisans.

  1. Revamped Scheme of Fund for Regeneration of Traditional Industries (SFURTI)

The main objective of this SFURTI scheme is to arrange the artisans and traditional industries, sustained development of these industries and its artisans. It also focuses on the enhancement of the marketability of the product. These can be done by clustering the industry. It provides facility and advance tools to the artisans. It also provides training to the artisan to improve their skills.

This scheme has 3 types of intervention:

  • Soft intervention: It has a ceiling of Rs. 25 lakhs with a scheme funding of 100%.
  • Hard intervention: It has a scheme funding of 75%.
  • Thematic intervention

The cluster of artisans is classified as

  • Heritage cluster: 8 crores
  • Major cluster: 3 crores
  • Mini cluster: 1.5 crores

  1. Coir Vikas Yojana (CVY)

This scheme offers skill development of young artisans for up-gradation, modernization and establishment of a new unit under CITUS. CVY also include the Mahila coir yojana.

  1. Coir Industry Technology Upgradation Scheme (CITUS)

This scheme offers financial assistance of 25% of the cost of the plant and machinery acquired by the industry for modernization, up-gradation and establishment of a new unit. The limit of the assistance is Rs. 2.5 crores.

  1. Skill Upgradation and Mahila Coir Yojana (MCY)

Under this scheme, the trainee is given a stipend of Rs. 3000 per month while the training agency gets Rs. 400 per head as training charges.

  1. Pradhan Mantri Suraksha Bima Yojana (PMSBY)

This PMSBY scheme provides insurance cover for a period of 1-year which can be renewed. The insurance is given to coir worker for death or disability due to accidents.

  1. Financial Support to MSMEs in ZED Certification Scheme

Under this scheme, the Government of India provides a subsidy of 80%, 60% and 50% for Micro, Small and Medium Enterprises respectively. There is an additional subsidy of 5% for SC/ST/women owners. The scheme includes services like Assessment & Rating, Re-rating, Gap analysis and Hand holding.

  1. Scheme for Promoting Innovation, Rural Industry & Entrepreneurship (ASPIRE)

This ASPIRE scheme focuses on creating new job opportunities and reducing employment. It also promotes entrepreneurship in India.

  1. National Manufacturing Competitiveness Programme (NMCP)

The different type of scheme offered under this programme are:

  • Credit Linked Capital Subsidy for Technology Upgradation (CLCSS):

This scheme offers 15% of capital subsidy for upgrading the technology of MSMEs.

  • Marketing Support/Assistance to MSMEs:

This scheme provides financial assistance for reimbursement of 75% of the one-time registration fee and 75% of recurring fee.

  • Design Clinic for Design Expertise to MSMEs:

This scheme provides financial assistance of Rs. 60000 for every seminar and 75% assistance up to Rs. 3.75 lakhs for every workshop. This assistance is provided to make new strategies for designing.

  • Technology and Quality Upgradation Support for MSMEs:

This scheme focuses on using energy technologies in manufacturing sectors for reducing the production cost and clean production. This scheme provides assistance of up for awareness (75%) and a total cost of Rs. 75000 per programme. It provides financial assistance of up to 50% for setting up Carbon Credit Aggregation Centres to a maximum cost of Rs. 1.5 lakhs. It also provides a 75% subsidy for licensing the product standards to the international and national level. The amount for standardizing is Rs. 1.5 lakhs for maintaining national standards and 2 lakhs for maintaining international standards.

  • Enabling Manufacturing Sector through QMS&QTT:

This scheme focuses to increase the competitiveness among the manufacturing sector. It provides financial assistance of Rs. 79000 per programme for QMS/QTT awareness programme, Rs. 2.5 lakh per unit for implementing QMS and QTT and also for conducting C watch study.

The investment for micro, small and medium enterprises in the manufacturing sector mentioned by the Government of India are:

  • Microenterprise: The investment in this enterprise must not exceed 25 lakh rupees.
  • Small enterprise: The investment in this enterprise must not exceed 5 crores rupees.
  • Medium enterprise: The investment in this enterprise must not exceed 10 crore rupees

The investment for micro, small and medium enterprises in the service sector mentioned by the Government of India are:

  • Microenterprise: The investment in this enterprise must not exceed 10 lakh rupees.
  • Small enterprise: The investment in this enterprise must not exceed 2 crores rupees.
  • Medium enterprise: The investment in this enterprise must not exceed 5 crore rupees

Conclusion

MSME loan is provided by all the banks and the majority of the financial institutions in India. The interest rates for this loan are relatively similar in all the public banks. However, you must go through the details information of the loan before applying. The value of the MSME loan varies from bank to bank.

The information given in this article has been taken from the official website of the ministry of small, micro and medium enterprises. The shifting on MSME loan application procedure to online has given a boost for people to take the loan in the manufacturing and service sectors.

Official Website: https://msme.gov.in/

Ministry of Micro, Small and Medium Enterprises-MSME

Room No 356 A, Udyog Bhawan, Rafi Marg, New Delhi – 110011
For queries related to MSME : 011-23063288 or 011-23063643.