MSME stands for micro, small and medium enterprises that are involved in manufacturing or processing of commodities. MSMEs are the heart of the Indian economy. They contribute up to 24.6 percent to the service sector GDP of our country and are the second largest employer in India, after agriculture.
In this cutthroat economy, many businesses are disappearing, owing to the lack of funds to support themselves. MSME loans are financial aid that can help these firms to thrive in today’s competitive scenario.
Eligibility to Apply for MSME loans:
There are some basic eligibility criteria put down by loan providers to avail MSME loans. Individuals as well as companies must have these following qualifications to apply for a loan:
- The individual applying for the loan must be at least 22 years old and have a maximum age of 65 years
- The concerned individual must have a business experience of 5 years and should be engaged in the concerned business for at least 3 years before applying for the loan
- The business the said individual is handling must have a basic income of at least Rs. 2 lakhs per year and a turnover of Rs. 10 lakhs per year
- The business should have generated consistent profits for at least two years
- Private companies, private companies involved in trading, manufacturing or service sectors and sole enterprises are all eligible for the SME loan
- All the eligible businesses must be registered as an MSME in the Udyaan portal and have a MSME registration certificate
How to Apply for an MSME Loan?
After checking your eligibility criteria and registering as an MSME, you need to follow a few simple steps to apply for the MSME loan.
- Login to the website of your loan provider and fill in the necessary application form with the required details pertaining to your business
- Shortly after you fill the fill and submit the form, a designated representative will contact you to help you understand the options that best fit your requirements
- Next, you have to submit the required documents online for verification and eligibility validation. You can simply scan the documents and upload them online
- Another way you can choose to submit is the offline method. You can request the loan provider to collect physical copies of the documents
- Once you submit the documents, online or offline, they are sent to the relevant team for verification
- After the verification is done and your loan is approved, the loan provider will share an agreement with you
- Read through the agreement thoroughly before signing your consent
- After the agreement is signed, you will receive your funds in a matter of 48 hours
What documents should you submit while applying for an MSME loan?
You must submit the following documents for verification while applying for the loan:
- PAN card of the individual and the company registered as MSME
- A proof of address of the applicant and the business
- Bank and income statements along with Form 16
- Income tax returns of the company for the past two years
- Audited financial statements that display the profit of the company for the last two years
Related Articles: Document Required for Applying Personal Loan
A MSME loan can go a long way in helping small businesses stand on their own and make a mark. Follow the right steps that can help you reach your goal.