India’s small-scale business segment contributes approximately 40% to the country’s GDP (Gross Domestic Product). Also known as the SME (Small and Medium Scale Enterprises) sector, it is a key source of employment and income. Stiff competition in this sector requires entrepreneurs to scale-up, innovate and upgrade their existing setups. Business expansion is key to succeed as an SME in India.
Businesses operating in this sector thus require external financing in the form of small scale industries loans. They can avail these loans from both government and private financial institutions. Such funds are commonly utilised to meet daily operations, expand the business, and fulfil such other requirements.
The government also extends these advances through loan schemes for small scale industries like:
PMMY (Pradhan Mantri Mudra Yojana)
CGSMSE (Credit Guarantee Scheme for Micro and Small Enterprises)
SMILE (SIDBI Make in India Loan for Enterprises)
Additionally, private lenders also facilitate the financing of small-scale industries through various loans. For instance, Bajaj Finserv offers SME and MSME loans of up to Rs.45 lakh to help businesses meet their financing requirements with ease.
Avail an industrial loan for small scale businesses to fulfil multiple funding requirements like:
Expanding the firm’s infrastructure.
Installing new equipment and machinery.
Fulfilling working capital requirements.
Meeting operational expenses like overhead payments, inventory purchase, and more.
Eligibility requirements vary depending on the Central Government small scale industries loan scheme availed. Check out the basic eligibility requirements to look for when availing such advances.
Business type – The business should fall under microenterprise category engaged in either manufacturing, trading or services industries. The loan is also available for professionals like doctors, engineers, CAs, etc.
Residential status – He/she should be a resident of India.
Age requirement – The borrower must also meet the age requirement laid down by the concerned financial institution.
Business status – Meet the business vintage requirement for a minimum of 3 years to avail a small scale industries loan from NBFCs like Bajaj Finserv.
Credit score– Fulfil the minimum credit score requirement of 750 with zero payments defaulted, for improved chances of loan approval. Also, fulfil the documentation requirements of the lender for faster processing of your loan application.
Keep the following documents handy before applying:
KYC documents including proof of identity and proof of address, like Aadhaar card, voter ID card, PAN card, etc.
Financial documents like profit and loss statement, balance sheet, tax returns and audit reports, etc.
Bank account statements.
Submit any other necessary documents required by your lender to avail the loan.
Complete the small scale industries loan procedure given below to apply:
Fill up the online application form on the lender’s website. For offline application, obtain the form from your nearest branch to apply.
Submit all documents required to your financial institution.
Receive approval on your application.
Once approved, the loan is disbursed to your bank account shortly. With lenders like Bajaj Finserv, the disbursal time is reduced to 24 hours, which helps fulfil immediate funding requirements.
Compare various lenders before applying to enjoy the best offers. Choose a suitable lender offering competitive interest rates along with attractive features and benefits for convenient and affordable repayment.
Additional Read: Government Loan Schemes: All you need to know
MSME stands for Micro, Small and Medium Enterprise. It was introduced by the Government of India in agreement with the Micro, Small and Medium Enterprises Development (MSMED) Act of 2006. As per this act, MSMEs are the enterprises involved in the production, processing or preservation of goods and commodities. Vital for economic growth, this sector contributes around one-third of the country’s GDP and generates employment for around 110 million of the population.
It also plays an important role in the socio-economic development of the country as many of these enterprises operate in rural India. According to the Government's annual report of 2018-2019, more than 6 lakh MSMEs operate in the country.
Initially, MSMEs were classified based on two factors - investment in plant/machinery and an annual turnover of the enterprises. However, the Ministry of Micro, Small and Medium Enterprises has recently revised the classification by combining these two factors into a single criterion.
The MUDRA loan is provided under the Pradhan Mantri MUDRA Yojana (PMMY) to non-farming and non-corporate micro and small enterprises. These enterprises can avail loans up to Rs.10 lakh under the MUDRA (Micro Units Development & Refinance Agency Ltd.) scheme.
We have discontinued this product (MUDRA Loan) at this time. Please reach out to us on +91-8698010101 to know more about the current financial services provided by us.
|Loan amount under Shishu||Up to Rs.50,000|
|Loan amount under Tarun||Rs.50,001 to Rs.500,000|
|Loan amount under Kishore||Rs.500,001 to Rs.10,00,000|
|Processing fees||0.5% for Tarun Loan, nil for others|
|Eligibility criteria||New and Existing Units|
|Repayment period||3-5 Years|
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