MSME loan: Features, Benefits and Eligibility Criteria

According to recent reports, the MSME sector is likely to contribute up to 25% to India’s GDP by the end of 2022. The MSME sector has already shown significant growth and today contributes about 45% to the country’s manufacturing output and about 40% to exports, both directly and indirectly.

However, MSMEs, owing to their small size, face a lot of challenges on their path towards growth. Finding good labour and retaining them over time, sourcing working capital, and getting easy access to funding options are some of the persistent worries that MSMEs need to tackle in order to increase revenue. A customised financing solution like an MSME loan helps micro, small and medium businesses like yours to meet these challenges head-on and beat competition. Read on to know more.

MSME loan: An overview

As the head of a small business, you have numerous duties to tackle. Time is of utmost importance and even a slight delay can result in missing a profitable market opportunity. In order to finance your needs urgently to prosper within the business environment, you will need access to timely finance, which is offered by MSME loans. These loans are meant for micro, small, and medium enterprises, and thus ensure you can qualify for it easily and get the finance you need for business growth fast, all at a competitive rate of interest.

Lenders offer faster sanctions and add more flexibility to the application process for an MSME Loan Scheme. A tailor-made loan, this MSME loan is processed and disbursed to you within 24 hours. This short turnaround time and a hefty sanction of up to Rs.30 lakh allows you to fund a range of business needs, without wasting time or effort.

Moreover, as you do not need to pledge collateral for this loan, your business assets are safe, and you save on time spent by the lender to assess the security too. As a business owner, you may also be concerned about how affordable the loan is. You can rest assured that the MSME loan interest rate charged by Bajaj Finserv is nominal, so you can fuel your business’ working capital, growth and marketing strategies, new hires and machinery purchase without a worry.

MSME loan eligibility criteria

An MSME loan is a customised financial offering, which is reflected in the convenient terms of eligibility. Usually, lenders require you to be between 25 and 55 years old with a business vintage of at least 3 years. Apart from this, you need to show your business’ Income Tax returns for at least the past one year. This loan is offered to partnerships, limited liability partnerships, private limited companies and more as well as self-employed professionals and non-professionals ranging from doctors and architects to traders and proprietors.

Once you qualify for the MSME loan, check the list of cities prescribed by your lender to see if you qualify basis your residence. Once you do, apply for the loan by filling an online application. You will also need to submit minimal documents for verification like your KYC documents and passport size photograph, certificate of business existence, and savings account statements or relevant financial reports.

How to benefit from an MSME loan

You can use the funds from this sanction to pay for a range of business needs.

  • Buy, repair or lease machinery to increase efficiency and output
  • Upgrade the existing office or factory space
  • Apply for export licences and create robust supply chain management
  • Hire skilled task force to improve the quality of production or services
  • Execute expansion plans to service more clients in different locations
  • Diversify into allied goods or services to increase revenue
  • Upgrade office software or invest in new software and computers
  • Fuel your working capital and meet seasonal slumps
  • Spend on digital sales, digital marketing and advertising
  • Participate in trade shows and networking conferences

Another way that you can benefit from the MSME loan is to access it via the Flexi Loan facility offered by NBFCs. Here you can withdraw from your sanction as per your requirement multiple times, in parts. You stand to save more as interest is charged only on the amount you use. So, you can use the loan to meet unexpected or frequent business expenses, without increasing your cost. Moreover, you can choose to repay the loan as interest-only EMIs and then repay the principal at the end of the tenor. This way you can save up to 45% on EMIs and manage your cash flow more efficiently.

As you can see, you can benefit from MSME loans in numerous ways. To get instant approval in a hassle-free manner, check your pre-approved offer now and choose a customised deal to scale up your business!

Please note: This article is branded content.