An MSME loan in India is offered by a number of banks and financial institutes – NBFCs and online lenders. The eligibility criteria and documents required for loan may differ from one lender to another. However, the steps for how to apply for MSME loan are almost the same for every lender. In this blog, we shall discuss the tips to avail an MSME loan in a hassle-free manner.

What is an MSME Loan?

What is an MSME Loan?

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An MSME loan is a credit facility extended by financial institutions to the MSMEs in India. The money availed under this facility can be used for growth and expansion purpose. The MSME owner can use the loan to buy inventory, expand the business, increase working capital, and invest more capital in the business.

Tips to get MSME Loan

MSME loan

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An MSME loan in India is offered by many banks, NBFCs, and online lenders in India. Every lender has different MSME loan eligibility criteria and documents required. However, with almost every loan lender’s online presence, the MSME loan procedure is the same. Let’s take a look at few tips to avail a loan easily.

Check CIBIL Score

MSME loan

Also Read: How to check cibil score for a business loan?

A CIBIL score is the most prerequisite MSME loan requirement. Every loan lender checks the CIBIL score of the borrower. The loan lender further checks the MSME loan application only of the borrower’s CIBIL score falls between the required thresholds. In case the CIBIL score is low, the application is rejected right there.

So, the first step for a loan is to check your CIBIL score. It is important to work towards improving CIBIL to get a loan application approved. Also, if your CIBIL score is high, the lender would also offer loan at the low interest rate.

Search MSME Loan Lender

MSME loan

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There are many loan lender in India. You need to search for the one that offers MSME loan schemes as per your requirement. You can avail MSME loan without collateral or with collateral. So, it is important to look for the lender who offers the type of loan that you require.

With finding the right lender, you are also required to find the lender that offers loan to the lender to the borrower who has CIBIL score that you have.

Meet Eligibility

MSME loan

Also Read: business loan eligibility criteria for an Nbfc business loan

After shortlisting a few loan lenders, you next have to check their MSME loan eligibility. As said earlier, every lender has their own set of eligibility requirements. You are required to check the same and only finalize the one who has the eligibility criteria that you can fulfill.

The general eligibility criteria list include 2 years of business vintage, ITR of more than INR 2.5 lakhs, business turnover of more than INR 10 lakhs, and you must own either your house or business premise.

Collect Documents

MSME loan

Also read: the a-z guide to all documents required for a business loan

As with the eligibility, the required loan documents also differ. And you must know the required documents. If you have all the documents at the place you can apply for a loan. However, if you do not have all the documents, either arrange them or find another lender who requires fewer documents.

Apply for Loan

MSME loan

Also read: how to get a business loan?

After you have found the lender and meets his eligibility and document, the next step is to apply for a loan. Now that most of the lenders have an online presence, you just have to visit his website. And then fill the application form online and upload the soft copies of the documents, preferably PDFs.

Apply for Machinery Loan

The lender will next process your application and approve it if you meet their eligibility.

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