MSME Loan for New and Existing Businesses
Micro, Small and Medium Enterprises or MSME Loans, are designed to support the growth and development of small enterprises. The loans are meant to provide the necessary funds for business expansion, operational expenses and other financial needs.
MSME Loans are crucial for boosting entrepreneurship and innovation, which are vital for economic growth. By providing financial assistance, MSME Loans help small businesses overcome financial barriers, allowing them to invest in technology, infrastructure and human resources, which eventually leads to increase in productivity and competitiveness.
MSME Loan Highlights
| Feature | Details |
|---|---|
| Interest Rate | Interest Rates 9% p.a. onwards |
| Loan Amount | No Minimum Limit to borrow & Maximum of up to Rs. 2 crores (Unsecured Business Loan), which can exceed as per business requirements |
| Repayment Tenure | From 12 months to 5 years, may exceed, as per the business requirements |
| Collateral/Security | Not required for unsecured business loans |
| Processing Fee | Nil to 4% of the sanctioned loan amount |
| Foreclosure Charges | From Nil to 5% of the outstanding principal amount |
| Part-payment Charges | From Nil to 4% of the outstanding principal amount |
| Subsidy | Offered by selected financial Institutions |
| Credit Facilities | Working Capital Loan, Bill discounting, Overdraft, Term Loan, Cash Credit, Letter of Credit, Bill of Purchase, Merchant Cash Advance, Loans under Govt. Schemes, etc. |
Table of Contents
MSME Loan: Revolutionising MSME Financing, Bridging Growth and Opportunity
In today’s dynamic economic environment, MSMEs are the lifeblood of innovation, resilience, and employment. Yet, access to tailored financial solutions remains a critical challenge for this sector. At OneNDF, we’re reimagining how MSMEs access capital by blending cutting-edge technology with deep financial expertise.
Our approach goes beyond loans; it’s about empowerment. From collateral-free financing to government-backed initiatives like MUDRA Yojana and CGTMSE, we provide a comprehensive suite of credit solutions tailored to unique business needs. Our seamless digital platform, equipped with features like instant eligibility checks and EMI calculators, ensures that MSMEs can focus on growth while we handle the complexity of financing.
This isn’t just lending—it’s creating opportunities, fostering innovation, and driving India’s economic engine forward. For entrepreneurs who dare to dream big, OneNDF is the partner you can trust to make it a reality.
MSME Loans are crucial for boosting entrepreneurship and innovation, which are vital for economic growth. By providing financial assistance, MSME Loans help small businesses overcome financial barriers, allowing them to invest in technology, infrastructure and human resources, which eventually leads to increase in productivity and competitiveness.
MSME Loan Existing Business/ New Business
Micro, Small and Medium Enterprises can use MSME loans for both new and existing business. Here are some things to consider while applying for an MSME Loan:
- Eligibility: To be eligible for an MSME loan, you must meet the lender’s eligibility criteria and submit the required documents.
- Loan amount: The loan amount can range from as low as Rs. 50,000 to a few crores.
- Interest rate: The interest rate for MSME loans starts at 9% per annum onwards.
- Repayment tenure: The repayment tenure for MSME loans can be up to 15 years.
- CIBIL score: A minimum CIBIL score of 700 (Approx) is typically considered for MSME loan applications.
- Application process: To apply for an MSME loan, you can visit your preferred bank’s website, fill in the required details, and submit the application form and documents.
MSME Business Loan Interest Rates
The interest rates on MSME loans start at 9% p.a. onwards. The loan amount sanctioned ranges from as low as Rs. 50,000 and can go up to a few crores. The loan tenure can range up to 15 years and processing fee is subject to the lender.
A Comparison between Different Bank Interest Rates (For unsecured business loan)
| Bank/ NBFCs | Interest Rate | Tenure | Processing Fee | Apply Now |
|---|---|---|---|---|
| SBI Bank Business Loan | 14% p.a. onwards | 1-4 years | Up to 2% of loan amount | Apply Now |
| IndusInd Bank Business Loan | 16% p.a. onwards | 1-4 years | Up to 2% of loan amount | Apply Now |
| SMFG Business Loan | 17% – 21% p.a. onwards | 1-4 years | Up to 2% of loan amount | Apply Now |
| Bank of Baroda Business Loan | 17% p.a. onwards | 1-4 years | Up to 2% of loan amount | Apply Now |
| HDFC Business Loan | 14% – 18% p.a. | 1-4 years | Up to 2% of loan amount | Apply Now |
| ICICI Bank Business Loan | 16% – 18% p.a. | 1-4 years | Up to 2% of loan amount | Apply Now |
| Axis Bank Business Loan | 15% – 18% p.a. | 1-4 years | Up to 2% of loan amount | Apply Now |
| Standard Chartered Bank Business Loan | 15% p.a. onwards | 1-4 years | Up to 2% of loan amount | Apply Now |
| Deutsche Bank Business Loan | 16% p.a. onwards | 1-4 years | Up to 2% of loan amount | Apply Now |
| Kotak Mahindra Bank Business Loan | 15% p.a. onwards | 1-4 years | Up to 2% of loan amount | Apply Now |
| RBL Bank Business Loan | 15% p.a. onwards | 1-4 years | Up to 2% of loan amount | Apply Now |
| IDFC First Bank Business Loan | 15% p.a. onwards | 1-4 years | Up to 2% of loan amount | Apply Now |
| Aditya Birla Finance Ltd Business Loan | 17%-18% p.a. onwards | 1-4 years | Up to 2% of loan amount | Apply Now |
| Yes Bank Business Loan | 16% p.a. onwards | 1-4 years | Up to 2% of loan amount | Apply Now |
| Tata Capital Business Loan | 16% p.a. onwards | 1-4 years | Up to 2% of loan amount | Apply Now |
| Hero Fincorp Ltd Business Loan | 16% p.a. onwards | 1-4 years | Up to 2% of loan amount | Apply Now |
| Bajaj Finserv Business Loan | 16% p.a. onwards | 1-4 years | Up to 2% of loan amount | Apply Now |
| NeoGrowth Business Loan | 16% p.a. onwards | 1-4 years | Up to 2% of loan amount | Apply Now |
| U Gro Business Loan | 16% p.a. onwards | 1-4 years | Up to 2% of loan amount | Apply Now |
Eligible Entities that can apply for MSME Loans
The following entities are eligible to apply for MSME loans:
- Individuals, startups, MSMEs, Business Owners, Women Entrepreneurs and self-employed professionals.
- People from SC/ST/OBC categories
- Private or Public Limited Companies
- Sole Proprietorships
- Partnership Firms
- Limited Liability Partnerships (LLPs)
The entities must be involved in the trading, services or manufacturing sectors.
MSME Loan Schemes initiated by the Govt. of India
Here are some popular MSME schemes offered by financial institutions and initiated by the Government of India are mentioned below:
- Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE)
- Credit Linked Capital Subsidy Scheme (CLCSS)
- Credit Guarantee Scheme
- MUDRA Yojana under PMMY
- National Small Industries Corporation Subsidy (NSIC)
- The Prime Minister Employment Generation Programme (PMEGP)
- Prime Minister’s Rozgar Yojana (PMRY)
- PSB Loans in 59 Minutes
- Stand-up India
- Start-up India
Documents required for getting MSME Loan
These are the documents that are required to avail for msme loan:
- Identity Proof: PAN Card, Aadhaar Card, Passport, Voter ID or Driving License
- Address Proof: Passport, Ration Card or Aadhaar Card
- Financial Statements: Balance Sheets, Tax Returns and Financial statements
- Business Registration Documents: Udyam Registration Certificate, Trade Licence or Lease Agreement
- Business Plan: A Business Plan is required to assess the business, industry and long-term growth prospects.
- Bank Statements: Latest bank statements for the last 6 months.
- Income Returns: Latest ITR 3/5/6 in .xml format or ITR 4 in pdf format.
Other Documents that may be required include:
- KYC details of the business and its promoter, painter or proprietor
- Details of any related parties
- Existing loan details
- Company profile with details
- Group financials and balance sheets.
- Business review with month-wise sales, production and raw material details
Eligibility Criteria for Online MSME Loan
These are the criterion for msme loan:
- Minimum 21 years at the time of application and Maximum 65 years at the time of loan maturity.
- Minimum Business Vintage of 1 year
- Annual Business Turnover: As defined by the lender, may vary across different banks.
- Good repayment history with financial stability
- No previous loan default with any financial institution
- Decent Credit Score and creditworthiness of the applicant shall be considered by the lenders.
Also Read: Business Loan eligibility criteria in India
Features and Benefits of MSME Loan
Here are some of the features and benefits of MSME Loan:
- Navigating the Business: Navigating a business in the Indian economic landscape can be difficult. Surplus funds may arise from seasonal demand fluctuations and other factors, while at other times, every cent can be crucial. When that situation occurs, funds will need to be allocated immediately.
- Complete Control: A small enterprise must also tackle the financial needs of the company while conducting operations. Securing finance is challenging, and alternative funding sources like angel investors and venture capitalists provide capital while aiming to gain partial control of the company in exchange. A small business owner might hesitate to give up control of their business. MSME loans are specially tailored to address the needs of small enterprises. They provide a great source of funding for entrepreneurs seeking to maintain control and avoid liquidation.
- Lowered interest rates: In a business context, the greater the amount of money one possesses; the more advantageously one can handle the risks that arise. Thanks to their attractive interest rates, MSME loans guarantee that only a small portion is used for loan repayment, leaving more funds accessible for additional business needs.
- No Strings Attached: MSME loans do not require companies to provide collateral to qualify. The essence of small enterprises is that they are ‘asset light’ and cannot afford to use their equipment as security. Small businesses are unable to commit their essential resources to banks for cash, as this could negatively affect their productivity if issues arise. Consequently, MSME loans prove to be an excellent source of funding when required.
- Short-term commitment: MSME loans are mainly utilised for short-term requirements by small businesses. his arrangement provides a certain amount of flexibility to the borrower, as there is no long-term commitment required on their part. A short-term commitment also allows the management room to manage the cash flow and efficiently allocate available resources. MSME loans come with great benefits for small businesses, like no collateral, fast processing cycle and online account access, that meet the exact needs of small business at any stage of their growth.
MSME Business Loan EMI Calculator
The Business Loan EMI Calculator is a web-based tool that allows you to compute your loan EMI prior to applying for a business loan or any other type of loan. To compute your business loan EMI, you can use the online EMI calculator by entering fundamental loan information, including loan amount, repayment duration, and interest rate. The Loan EMI is calculated automatically based on the information provided by the applicant. The precise EMI will be determined by the lender when the loan is approved.
Do's and Don'ts when applying for an MSME Loan online
| Do’s | Don’ts |
|---|---|
| Understand your business needs, as it is required for the expansion of operations, working capital, or inventory. | Do not apply to multiple lenders simultaneously as each application generates a hard inquiry on your credit report, which impacts your credit score. |
| Evaluate your eligibility as it will help you to focus on lenders who are more likely to approve your application. | Monitor your credit score on regular intervals and take steps to improve if it is needed. |
| Prepare a Solid Business Plan as lenders are more likely to approve loans when they see a well-thought-out business plan. | Fudging numbers or providing false information can lead to severe consequences, including loan rejection and legal action. |
| Keep your financial records in order, which includes income statements, balance sheets, and tax returns. | Missing payments not only negatively impact your credit score but can also result in additional interest and fees. |
Factors affecting MSME Loan Interest Rates
The interest rates for MSME/SME loans provided by financial institutions depend on several factors outlined below:
- The applicant’s age, earnings, credit rating, financial background/stability, credit reliability, and ability to repay.
- Requested loan amount and repayment period
- Business vintage, yearly revenue, and profitability.
- Company’s credit score, type/nature/length/volume of business, etc
How to Apply for MSME Business Loan through OneNDF
You can apply for MSME Business Loan from OneNDF website by following the steps mentioned below:
- Step 1: Visit OneNDF’s website to start the process of applying for the loan online. If you are a new user, click on sign up, in case of existing user click on sign in.
- Step 2: You can register by entering your mobile number and clicking on ‘Next’
- Step 3: You would receive an OTP, through which you can authenticate your identity.
- Step 4: Once authenticated with your OTP, you can upload your documents and apply for a MSME Business Loan at attractive interest rates as per your requirements.
- Step 5: Once the loan application form is submitted, the platform connects you with the best lender available as per your requirements. It helps you get a MSME Business Loan at a competitive interest rate.
FAQs
MSME stands for Micro, Small and Medium Enterprises.
The new MSME registration process is entirely electronic, paperless and self-declaratory.
Step 1: Submit an online Udyam Registration application through the Udyam Registration Portal.
Step 2: Following the completion of the registration process, the business will be given a “Udyam Registration Certificate”.
Step 3: Following the completion of the registration process, the business will be given a “Udyam Registration Certificate”
MSME stands for Micro, Small and Medium Enterprises. It was introduced by the Government of India in agreement with the Micro, Small and Medium Enterprises Development Act of 2006. As per this act, MSMEs are the enterprises involved in the processing, production, and preservation of goods and commodities.
MSME Classification includes those dealing with manufacturing such as leather goods, farming equipment, bicycle components, among others.
To be eligible for a Mudra Loan, here are the following criteria:
- Must an Indian citizen
- Have a business plan for a non-farm income generating activity.
- Have a credit need of up to Rs. 10 Lakh
- Not to be defaulter to any bank or financial institution
- Have a satisfactory credit track record
- Have a valid Aadhaar and PAN.
- Have a bank account with any Scheduled Commercial Bank that is least 6 months old.
- Not to appear in any defaulter lists or CFR.
- Visit http://udyamregistration.gov.in
- Click on the “Print Udyam Certificate” option under the print/verify menu
- Log in using your 16-digit Udyam registration number and mobile number
- Choose OTP delivery method and validate OTP
- Once logged in, click on “print” to download your certificate
The limits for Micro, Small and Medium Enterprises are as follows:
Micro Enterprise: Investment in plant and machinery or equipment is up to Rs. 1 crore and turnover is up to Rs 5 crore
Small Enterprise: Investment in plant and machinery or equipment is up to Rs 10 crore and turnover is up to Rs 50 crore
Medium Enterprise: Investment in plant and machinery or equipment is up to Rs 50 crore and turnover is up to Rs 250 crore
It is a loan obtainable by any MSME business to expand and purchase their business. It would help them in purchasing machinery and equipment, meeting working capital requirements, payment of rent, salaries and other daily or monthly expenses, management of cash flows and any other financial provision for operational purposes.
The interest rates on MSME loans start at 8.85% p.a. The loan amount sanctioned ranges from as low as Rs. 50,000 and can go up to few crores. Based on the sanctioned loan amount, the loan repayment tenure can go up to 15 years.
The MSME registration is free of cost and obtaining an MSME certificate is also absolutely free.
According to the Ministry of MSMEs, there are over 63 million Micro, Small and Medium Enterprises in India. The MSME sector is a major contributor to India’s GDP growth, employment and exports.
Yes, last year’s GST return is necessary for existing MSMEs and salaried professionals who want to start their new business.
MSMEs contribute around 30% to India’s GDP. This sector is crucial for economic growth as it supports various industries and services, creates jobs, and encourages entrepreneurial initiatives.
To apply for an MSME loan online in 59 minutes, you can visit psbloansin59minutes.com, an initiative by the Government of India that approves business loans in 59 minutes after application form submission.
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