MSME refers to Micro, Small, and Medium Enterprises. Based on the yearly turnover of a business house, the size of the enterprise gets defined. These organisations always receive some advantages from the Government for investment and growth in the form of easily available and accessible loan options.
Since the industry is one of the cornerstones that keep the economy of a country moving and thriving, MSMEs are treated as one of the most potent sectors capable of turning the wheel of the fate of a country.
However, when it comes to eligibility for applying and getting the loans sanctioned for any MSME, there is a list of procedural specifications that are to be followed impeccably. You can also consult the best financial advisor in Delhi NCR to make sure that you are not missing out on any criteria or losing an opportunity for loaning.
What Is MSME?
As far as the definition of MSME is concerned, it is the turnover and investment limit of a company that defines the enterprise as a micro, medium, small, or a large one. In the pre-COVID era, the definition of MSME was different from the one that has been conceived by the Government of India in the light of the pandemic situation.
On 13th May 2020, the Government of India gave a fresh definition for MSME, keeping the pandemic scenario in mind. During hard times like these, the industry expects more support from the Government, and justifying the same, the Government of India has amended the definition of MSME to make the span of the MSME loan policy more inclusive.
According to the latest modification, manufacturing and service industry companies, having an annual turnover of less than 5 crores, and an investment amounting to less than 1 crore, would be defined as a part of the micro-scale industry. The small scale industries are the ones that have less than 10 crore of investment and 50 crores of annual turnovers. And for the medium scale industries, the margin of yearly turnover has been kept under 100 crore while the investment would border around 20 crores.
To know more about the specifications or how to get MSME loans, you may seek the financial consultancy of the market experts.
MSME loans are a special variety of loans extended to MSMEs to help them sustain the market competition and grow in terms of volume over time. The Government of India gives MSME loans to the enterprises to them the organizations thrive amidst any financial crisis or adversities. The financial institutions like nationalized banks, NBFCs, etc. offer loans on varying terms and rate of interests to the MSME sector. SIDBI MSME loans are a unique variety of loans granted to the small, micro, and medium scale enterprises on relaxed terms to kelp them grow.
Eligibility To Apply For MSME Loans
Applying for MSME loans is not a complex task if you have an expert by your side explaining the intricacies involved with the process. However, before you get to know about how to apply for MSME loans, check your eligibility. Whether or not your enterprise would qualify to apply for an MSME loan would depend on the following.
- You must submit a comprehensive business plan to apply for MSME loans. Evaluating the prospect of the proposed plan, the loan gets sanctioned
- You must have a registered business, and the business must have been operative for a while at the time of applying for the MSME loan
- Profit and loss statement is must to apply for MSME loans. These statements clearly show that well-managed business is, and based on this, the loan gets sanctioned. Consult the best financial advisor in Delhi NCRto know more in detail.
- Income Tax return file is a mandatory document to apply for MSME loans. A well managed ITR file with no dues is the best way to get MSME loans sanctioned.
- Credibility in the market is another pillar for getting MSME loans. If the loan seeker has a clear credit history, it represents a higher probability for the loan repayment in time that encourages the authorities to sanction the loan.
- Documents related to the collateral pledged for the loan is a must in case you are availing a collateral-based loan. However, collateral-free loansare available in plenty in the market these days. You can also opt for those to skip the complexities.
- All varieties of registration papers would be required at the time of applying for an MSME loan. So if you are planning to opt for one, get your documents ready prior hand.
- Keep your company’s bank statements clear and ready to apply for MSME loans.
If you have all of these available and ready with you, you can apply for MSME loans provided that your enterprise falls within the periphery of the MSME sector by definition.
Documents Required For Applying For MSME Loans
Once you have come to know about how to avail MSME loans, you must also be aware of the documents you need to submit at the time of applying for the loan. Here is a list of the documents that are required.
- A duly filled application form of the loan application
- Age Proof: Passport, Photo PAN card, Voter’s identity card
- Residence Proof: Passport, trade license, lease agreement, sales tax certificate and ration card, electricity, and telephone bills
- Identity Proof: Driving license, Passport, Voter’s identity card, PAN card
Also, make sure to take the advice of one of the top financial consultants in Delhi NCR to be sure of no flaws.
Applying for MSME loans is not a complicated task. If you have all the necessary documents available with you, your loan will be sanctioned effortlessly. The best you can do to make sure that you get over this process minus any hazard is to consult an expert to guide you through the process.
The best financial consultants offer top-notch services to make sure that your loan gets sanctioned without any hassle. With the Government of India supporting the MSME sector with its already announced 20 lakh crore package, applying for loans has become easier.