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Small Scale Industries Loan

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Small Scale Industries Loan

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.

Government Loan Schemes for Small Scale Industries

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.

Uses of Small Scale Industries Loan

Avail an industrial loan for small scale businesses to fulfil multiple funding requirements like:

  1. Expanding the firm’s infrastructure.

  2. Installing new equipment and machinery.

  3. Fulfilling working capital requirements.

  4. Meeting operational expenses like overhead payments, inventory purchase, and more.

Eligibility Criteria for Small Scale Industries Loan

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 685 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.

Procedure to Avail a Small Scale Industries Loan

Complete the small scale industries loan procedure given below to apply:

  1. Fill up the online application form on the lender’s website. For offline application, obtain the form from your nearest branch to apply.

  2. Submit all documents required to your financial institution.

  3. 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

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