MSME stands for Micro, Small and Medium Enterprises. MSMEs are classified into 2 categories; one is manufacturing enterprise engaged in manufacturing or production of goods and second is service enterprise engaged in providing services. MSME loans are business loans offered to the MSMEs or Micro, Small and Medium enterprises or to the SMEs or Small and Medium Enterprises in the form of SME loans. These loans are offered for the advancement of business and other activities like purchase of machinery and raw material, to meet the working capital requirements, and to invest in fixed assets. MSME loans are usually offered to small business owners, women entrepreneurs, and start-ups. Eligible enterprises for this scheme are Sole Proprietorship, Partnership Firms, Manufacturing or service-based micro and small enterprises excluding Retail traders, educational institutions, training institutions, agriculture & Self Help Groups. Under MSME loans many lender offer the loan amount according the status of the organization. Based on the Investment and Annual Turnover business are classified into 3 types: Micro(Investment < Rs 1 crore and Turnover < Rs 5 crore), Small(Investment < Rs 10 crore and Turnover < Rs 50 crore), and Medium(Investment < Rs 20 crore and Turnover < Rs 100 crore).
Q).What are the main factors that effects business loan?
Income Tax Returns(ITR):Banks consider borrowers who have filed ITRs of 2 years or more as eligible to get a business loan. Banks evaluate your monthly income and repayment capacity based on details submitted in the ITRs
Investment / Turnover:Banks define companies into different categories based on the investment and revenue that a business enterprise has earned from the sale of goods and services to customers.
Credit & Payment History:In order to sanction a loan banks do follow the credit history/ CIBIL score of every applicant. Positive payment history and better CIBIL score help to get the maximum loan amount at low interest rates.
Applicant Age: Banks consider borrowers with age of 18 years to 65 years.
Q).What is the maximum limit of MSME loan that I can get?
The maximum loan amount depending on various eligibility factors, and it is varies from lender to lender. Banks provide maximum 100 Cr.
Q).What kind of business comes under MSME?
Manufacturing Enterprises: The enterprises dealing with the manufacturing and production of goods.
Service Enterprises: The enterprises dealing with providing or rendering of services.
Q).What are the age limit for MSME loan?
Applicant should be at-least 18 years old and not more than 65 years of age
Q). What is the maximum tenure for MSME loan?
The maximum home loan tenure offered by all major lenders is 5 years.
Q). Is there any turnover limit for MSME?
The turnover limit for MSME is ₹ 5 Cr for micro enterprise, ₹ 5 Cr to ₹ 75 Cr for small enterprise, and for medium enterprise it is ₹ 7.50 Cr to ₹ 250 Cr.
Q).What is the maximum turnover limit to get MSME Loan?
Max ₹ 250 Cr p.a for both manufacturing and service Enterprises.