MSME loan scheme features and benefits

  • Swift loan processing

    Swift loan processing

    Qualify for the loan by meeting simple criteria, submitting minimal documentation, and without the need for collateral.

  • Simple application

    Simple application

    Apply online easily for MSME loan/ SME funding by submitting just a few essential documents.

  • Repayment made flexible

    Repayment made flexible

    Select a tenor up to 96 months for comfortable repayment of your MSME/ SME loan.

  • Digital loan management

    Digital loan management

    Check your account statement and manage EMIs with an online loan account for maximum convenience.

  • Funds up to Rs. 80 lakh

    Funds up to Rs. 80 lakh

    Get an ample sanction to address all business-related expenses.

  • Flexi benefits

    Flexi benefits

    Suit your dynamic needs with our Flexi facility. Borrow from the sanction as needed and pay interest only on the amount you utilise.

MSME Loan for Existing Businesses

With funds up to Rs. 80 lakh* (*Inclusive of Insurance Premium, VAS Charges, Documentation Charges, Flexi fees and Processing Fees), an MSME/ SME loan from Bajaj Finserv is designed to assist businesses in managing their multiple working capital expenses.

You can avail of an MSME loan without collateral, which means you don’t have to pledge any assets. You can get this loan at a competitive interest rate and enjoy approval in under 48 hours* to meet urgent needs for finance. Our MSME/ SME business loan is a simple and efficient solution for your funding needs.

Further, our Flexi business loan allows you to reduce your EMIs by up to 45%* when you pay only interest as EMIs to improve cash flow. The principal is repaid at the end of the tenor.

*Terms and conditions apply

Types of MSME loans

MSME loans are designed to support the financial needs of micro, small and medium-sized enterprises. These loans are available in various forms, including Term Loans, Flexi Term loans and Flexi Hybrid Loans.

A Term Loan is a fixed loan amount that is disbursed to the borrower and the repayment is typically made in equal instalments over a set period of time. This type of loan is ideal for businesses looking for financing over a long period.

A Flexi Term loan allows you to withdraw funds as needed from a pre-set sanction, which can help to manage cash flows more effectively. With this loan, you only pay interest on the amount withdrawn.

A Flexi Hybrid loan combines the features of Term Loans and Flexi Term loans. You get a pre-set loan amount and you can withdraw funds from this whenever needed. In addition, this loan variant comes with the option to pay just interest as EMIs for the early part of the tenure.

Overall, MSME loans are an effective way for small businesses to obtain the financing they need to grow and expand. By providing flexible repayment options and fast access to funds, these loans can help businesses of all sizes achieve their financial goals.

Eligibility criteria for MSME/ SME loan

Any business owner can apply for this loan, as long as they meet the following eligibility parameters:

Eligibility criteria

  • Nationality: Indian
  • Business vintage: At least 3 years
  • CIBIL Score: 685 or higher
  • Work status: Self-employed
  • Age: 21 to 80*

*You should be 80 or younger at the end of the loan tenure.

Documents needed for MSME Loan

Here's a table outlining the documents needed for an MSME (Micro, Small, and Medium Enterprises) loan:

Document          

 Description                                       

Business plan     

 Detailed plan outlining business operations, goals, and financial projections

KYC documents     

 Identity and address proofs of the business owner(s) and the business entity

Business registration proof

 Proof of business registration such as MSME registration certificate, GST registration, etc

Ownership documents

 Documents proving ownership of business premises or assets offered as collateral

Financial statements

 Income statements, balance sheets, and cash flow statements for the past few years

Bank statements   

 Recent bank statements of the business account(s) to assess financial health

Income tax returns

 IT returns of the business and business owner(s) for the past few years

Project report    

 A detailed report outlining the purpose of the loan, its utilization, and expected outcomes

Collateral documents

 Documents related to assets offered as collateral, such as property deeds, title documents, etc

Credit history    

 Credit reports of the business and business owner(s) to assess creditworthiness

Trade license     

 Valid trade license permitting the business to operate legally

Memorandum and Articles of Association

 For companies, documents outlining the company's structure and regulations

Partnership deed  

 For partnerships, the legal document outlining the terms of partnership

 

Eligible entities that can apply for MSME loans

You, as an individual, startup, MSME, business owner, or self-employed professional, along with women entrepreneurs and individuals from SC/ST/OBC categories, are eligible for MSME loans. Entities such as Private or Public Limited Companies, Sole Proprietorships, Partnership Firms, and Limited Liability Partnerships (LLPs) operating in trading, services, and manufacturing sectors can also apply.

Purpose of MSME Loans

MSME Loans serve various business needs:

  1. Start or expand your enterprise.
  2. Procure plant & machinery, including testing or lab equipment, electrical appliances, etc.
  3. Construct buildings or acquire land/commercial properties.
  4. Introduce new product lines or settle supplier bills through Bill Discounting.
  5. Fulfil working capital needs like salaries, raw material purchase, inventory stocking, and marketing.
  6. Invest in machinery/equipment or vehicle fleets.
  7. Obtain additional funds for diverse business requirements.

MSME Loan Schemes initiated by the Govt. of India

Government-initiated MSME loan schemes offer financial support to Micro, Small, and Medium Enterprises (MSMEs). These initiatives aim to facilitate easy access to credit and promote entrepreneurship among MSMEs. Some popular schemes include:

  • CGTMSE: Credit Guarantee Fund Trust for Micro and Small Enterprises
  • CLCSS: Credit Linked Capital Subsidy Scheme
  • Credit Guarantee Scheme
  • Pradhan Mantri Mudra Yojana
  • National Small Industries Corporation (NSIC) Subsidy
  • PMEGP: The Prime Minister Employment Generation Programme
  • PMRY: Prime Minister’s Rozgar Yojana
  • PSB Loans in 59 minutes under SIDBI
  • Startup India Scheme

Things to know before applying for MSME loan

Before applying for an MSME loan, consider your business needs, financial goals, and why you require the loan. Here are 5 things to keep in mind before applying:

  • Understand your business requirements: Before applying for an MSME loan, assess your business needs, financial goals, and the purpose of the loan. This clarity will streamline your loan proposal.
  • Choose the right lender: Look for a lender offering flexible terms and conditions tailored to your business needs. Opt for simplicity and flexibility in the application process.
  • Apply online: Utilize the convenience of online application processes. Applying for an MSME loan online is quick, with minimal documentation and speedy fund disbursal.
  • Prepare necessary documentation: Ensure you have all required documents ready for submission. Familiarize yourself with the lender's documentation process to expedite your application.
  • Await sanction and disbursement: Upon submission and verification of your documents, the lender will sanction your loan based on your repayment capacity. Once approved, funds will be disbursed directly to your business account for immediate use.

Collateral for MSME loan

Collateral for MSME loans typically includes tangible assets like property, land, machinery, or equipment. Lenders may also accept financial assets like fixed deposits, insurance policies, or stocks as collateral. The value of the collateral is assessed based on factors such as market value, depreciation, and future earning potential. Providing collateral reduces the lender's risk, thereby increasing the chances of loan approval and favourable terms. However, it's essential for borrowers to carefully consider the implications of pledging collateral, as defaulting on the loan could lead to the loss of these assets.

How to calculate MSME / SME loans EMI?

EMI (Equated Monthly Installment) for MSME or SME loans can be calculated using mathematical formulas or online EMI calculators provided by banks and financial institutions. The EMI calculation considers factors such as loan amount, interest rate, and loan tenure. The formula for EMI calculation involves the principal amount, interest rate, and loan tenure. It's essential to consider the impact of interest rates on EMI and choose a repayment tenure that aligns with the business's cash flow. Regularly paying EMIs on time helps maintain a good credit history and ensures smooth loan repayment.

The formula to calculate the Equated Monthly Installment (EMI) for an MSME or SME loan is:

EMI = P*r/1-(1+r)^{-n}

Where:

P  = Principal loan amount

R  = Monthly interest rate (annual interest rate divided by 12 and expressed as a decimal)

N  = Loan tenure in months

This formula calculates the fixed monthly installment amount that includes both principal and interest components. It's essential to ensure that the values used in the formula are consistent with the terms of the loan agreement.

How to Apply for MSME Loan Online

To apply for an MSME loan online, follow these steps:

Step 1: Visit your preferred bank's official website.

Step 2: Log in if you're an existing customer; if not, create an account.

Step 3: Fill in mandatory details, including personal, income, and business information, and loan requirements.

Step 4: Submit the loan application form online.

Step 5: Upload mandatory documents, such as personal, business, and income proofs.

Step 6: A bank executive will contact you for further procedures.

Step 7: After document verification, the loan is approved.

Step 8: The approved funds are disbursed to your business account within the specified timeframe.

Do's and Don'ts when applying for an MSME loan online

Certainly! Here are some do's and don'ts when applying for an MSME loan online, presented in bullet points:

Do's:

  • Research and compare loan options from different lenders to find the best fit for your business needs.
  • Ensure your business documents and financial statements are up-to-date and accurate before applying.
  • Use secure and reputable online platforms or official lender websites to submit your loan application.
  • Provide complete and truthful information in your application to avoid delays or rejection.
  • Review the terms and conditions, including interest rates, fees, and repayment terms, before accepting the loan offer.
  • Keep track of your application status and respond promptly to any requests for additional information or documentation.
  • Maintain regular communication with the lender throughout the application process to address any queries or concerns.

Don'ts:

  • Don't provide false or misleading information in your loan application, as it can lead to rejection or legal consequences.
  • Avoid applying for multiple loans simultaneously, as it can negatively impact your credit score and loan eligibility.
  • Don't overlook the fine print of the loan agreement, including hidden fees or penalties.
  • Avoid sharing sensitive personal or financial information on unsecured or suspicious websites.
  • Don't ignore communications from the lender or delay in providing requested documents, as it can delay the loan approval process.
  • Refrain from taking on more debt than your business can comfortably repay, as it can strain your finances and creditworthiness.
  • Don't hesitate to seek clarification from the lender if you have any doubts or concerns about the loan terms or application process.
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Frequently asked questions

What are the documents required for an MSME/ SME loan?

To apply an for the MSME/ SME loan successfully, here are the documents you require:

  • KYC documents
  • Proof of business ownership
  • Profit and loss statements and balance sheets

You may also be asked to submit additional documents if required.

Who is eligible for an SME/ MSME loan?

To qualify for the loan, these are simple criteria to meet:

  • Nationality: Indian
  • Business vintage: At least 3 years
  • Age: 21 to 80* (*Age should be 80 at loan maturity)
  • Work status: Self-employed
  • CIBIL score: 685 or higher
How can I get an SME/ MSME loan?

To avail of SME/ MSME finance, simply meet the eligibility criteria, apply for the loan, and submit all the required documents.

Who can avail of an SME/ MSME loan?

Entities, self-employed professionals, and self-employed non-professionals like proprietors, retailers, traders and others can get an SME/ MSME loan from Bajaj Finserv.

What is the interest rate for an SME/ MSME loan?

With Bajaj Finserv, you can avail of the MSME/ SME loan with an interest rate starting from 9.75% p.a.

How to apply for an SME/ MSME loan?

Follow this easy 4-step guide to applying for this loan online:

  • Click on ‘APPLY ONLINE’ to open the application form
  • Fill out the online application form and authenticate with an OTP sent to your phone
  • Fill in your KYC and business information
  • Upload the bank statement for the last 6 months and submit the application form

Once you have applied, an authorised representative will contact you with further instructions on getting the funds in your bank account.

Is MSME loan collateral free?

Yes, the MSME loan from Bajaj Finance is collateral-free.

How can I get a collateral-free MSME loan?

You can get a collateral-free MSME loan by clicking on the ‘APPLY’ button on this page and filling out the form with your required details. Once completed, our representative will get in touch with you to collect your documents and move the process forward.

What factors affect SME business loan interest rates?

Several factors can affect SME loan interest rates. These include: the creditworthiness of the business, the purpose of the loan, the loan tenure and the lender's risk assessment of the business.

What is the minimum tenure of an MSME loan?

MSME loans from Bajaj Finance come with a minimum tenure of 12 months and a maximum tenure of 96 months.

What is the interest rate of MSME loan?

An MSME loan from Bajaj Finance comes with interest rates starting as low as 9.75%.

What is the maximum limit of an MSME loan?

You can avail of an MSME loan from Bajaj Finance of up to Rs. 80 lakh. To apply, just ensure you meet the eligibility criteria, complete the loan application, and submit all necessary documents.

What is the minimum CIBIL Score for an MSME loan?

To apply for an MSME loan from Bajaj Finance, you need to have a CIBIL Score of 685 or higher.

Is MSME loan easy to get?

With minimal documentation, flexible repayment options, and competitive interest rates, businesses can avail of a quick and easy MSME loan from Bajaj Finance. However, the loan approval depends on an assessment of the borrower's creditworthiness and other factors like business stability and profitability.

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