Business Loans Bole Toh Sirf Lendingkart!
MSME stands for micro, small and medium enterprises, sometimes it is also shortened to SME for small and medium enterprises. But, in essence, MSME and SME Loans are the same and are offered to businesses that fall under these two categories. Mostly, these loans are given to startup owners, small business owners and women entrepreneurs on a short-term basis. The duration of MSME / SME loans varies from lender to lender. As MSME loans are unsecured MSME / SME Loans, there are some minimum eligibility requirements in order to reduce the risk for lenders.
Features of MSME Loan / SME Loan
Lendingkart has special MSME loans and SME loans for businesses looking for quick finance in India. These loans are approved through an online process which helps in speeding up the financial vehicle delivery. Lendingkart also allows several customisations to its financial products which makes them ideal for today’s competitive business environments.
We have a flexible ticket size for MSME and SME Loans that starts at ₹ 50,000 and goes all the way up to ₹ 2 Crore. This makes Lendingkart business loans a veritable option for micro, small and medium enterprises.
We believe in fast track growth and therefore, we removed every process that slows down a loan approval. By taking MSME and SME loans online we have ensured same-day loan approvals with disbursals pending the verification of documents.
Online document submission also allows us to complete the verification process quickly. As there are no wait times between sending and receiving of documents, we are able to approve MSME / SME loan disbursals within 3 days of application.
All business loans approved by Lendingkart are unsecured. Meaning, there is no requirement for collateral to get an MSME or SME loan from us. And so, no need to worry about asset security when getting a business loan.
We use financial data analytics to calculate the best available interest rates for your enterprise. There is no manual intervention in the whole process and hence the rate you get is fair and as per your business’s ability to repay the MSME / SME Loan.
Lendingkart’s MSME loans give you ample time and options to repay your business loan easily. Our loan tenures start at 1 month and go all the way up to 36 months. Additionally, you have the option to repay in monthly or bi-weekly instalments or EMIs. This allows you to repay your debt in sync with your account’s receivables.
Lendingkart MSME loans do not have any hidden costs or fees. We only charge an upfront processing fee of 2-3% depending on your loan amount and that’s all. This allows you to get more value in your principal disbursal than with any other business loan product in the market.
All MSME and SME loans from Lendingkart come with zero prepayment fees. So, if you decide to settle your debt early, you can do so any time after the payment of the first EMI, without attracting any penalties or charges for early repayment in full.
Benefits of MSME Loan / SME Loans by Lendingkart
MSME / SME Loans by Lendingkart help your business’s growth potential and opportunity exploitation ability. Here are the benefits of an MSME / SME loan from an NBFC like Lendingkart.
– Move quickly from planning to execution
Our superfast turnaround time means that you can take things from planning to execution within a matter of days instead of weeks or months. An MSME loan from Lendingkart allows you to get ahead in product marketing, boost production and expand your supply network in no time at all.
– Remain in control of your business
Our MSME / SME loans are unsecured, keeping your valuable assets protected in case there is a loan default. Similarly, we do not take control of your credit policy in return for investment, so that you remain in charge of your precious enterprise at all times.
– Manage your company capital better
Our MSME / SME loans can be used for a number of purposes. You can either use them to expand your operations by buying plant and machinery or opening at a new location, or you can use the loan for streamlining your working capital and general cash flow. Our MSME / SME loans help you in balancing your company capital through short-term investments that can be easily repaid.
– Raise your credibility in the market
With Lendingkart MSME / SME loans, you can give your business a much-needed boost and hence improve your profitability. This, in turn, will reflect in your books and create goodwill and credibility for your business in the market. Credit rating agencies will also take note of your improving prospects and raise your business’s credit rating accordingly, opening the way to increased investment and business finance.
MSME / SME Loans Fees & Interest Rates
| Customized Interest Rates | 15 to 27% * |
| Processing Fees | 2-3% |
| Loan Tenure | up to 3 years |
| Pre-closure Charges | Nil** |
| Eligibility Criteria | > ₹ 90,000 turn over for 3 Months |
| Loan Amount | ₹ 50,000 – ₹ 2 crore |
| Installments | Flexible Monthly / Bi-weekly |
*Based on the health of your business, revenues and annual turnover
**Pre-closures are only allowed after the first EMI is paid in full
Eligibility Criteria for MSME / SME Loans
Lendingkart has kept the eligibility requirements to the bare essentials in order to process MSME / SME loans faster. We do not require too many documents or unnecessary paperwork that can hold-up the loan approval process.
- An established business that has been in operations for more than 6 months.
- A minimum turnover of ₹ 90,000 or more in the 3 months preceding your loan application.
- The business should not fall under blacklisted / excluded list for SBA finance.
- The physical location of your enterprises should not be in the negative location list.
- Trusts, NGOs and charitable institutions are not eligible for small business loans.
If you are not sure if your business falls under a restricted category or location, you can contact us to confirm your eligibility
Documents Required for a MSME / SME Loans
| Proprietorship | Partnership | Pvt. Ltd. / LLP / One Person Company | |
|---|---|---|---|
| Bank statement (12 months) | ✓ | ✓ | ✓ |
| Business registration proof | ✓ | ✓ | ✓ |
| Proprietor(s) PAN Card Copy | ✓ | ✓ | ✓ |
| Proprietor(s) Aadhar Card Copy | ✓ | ✓ | ✓ |
| Partnership Deed Copy | ✕ | ✓ | ✕ |
| Company PAN Card Copy | ✕ | ✕ | ✓ |
We accept any of the following as a Business registration proof
1)Business Registration Certificate 2)GST filing 3)Gumastadhara 4)Trade License 5)Drug License 6)TIN7)VAT registration
3 simple steps to your MSME / SME Loans
Submit Application
Simply enter your personal, business and financial info to receive a MSME / SME Loans offer.
Upload Documents
Upload digital copies of your documents in a single step process for verification.
Get Sanctioned
Receive your MSME / SME Loans approval and disbursal within 3 working days.
Smart ways to use MSME / SME loans
The micro, small and medium enterprises (MSME) sector is one of the biggest providers of employment and industrial output in the country. As much as 45% of industrial production and 40% of India’s exports comes from the MSME sector. Hence, the need for business finance is also greater in this sector. Lack of timely finance is one of the biggest bottlenecks for MSME growth in India. However, things are changing with non-banking financial companies like Lendingkart emerging as an alternative to traditional banks.
Today, MSME / SMEs can avail quick business finance up to ₹ 1 Crore within 3 days from Lendingkart.
Here are 5 smart ways you can utilize the funds of an MSME / SME loan.
Inventory Management
Inventory management is a critical part of a small business as its profits depend on the sale volumes. As many as 31% of the businesses applying for a small business loan use the funds to purchase inventory. Utilize the funds from your MSME loan to secure your inventory supply chain. Manage seasonal dips, replenish existing stock or buy new product samples for sale with an inventory loan for MSMEs.
Purchasing Plant & Machinery
A small business owner can use unsecured MSME loans to fund the purchase of new equipment. Since, investment in plant and machinery requires heavy funding, an MSME loan up to ₹ 1 Crore can be helpful in expanding your operations without straining the company capital fund.
Working Capital Management
A small business owner can use unsecured MSME loans to fund the purchase of new equipment. Since, investment in plant and machinery requires heavy funding, an MSME loan up to ₹ 1 Crore can be helpful in expanding your operations without straining the company capital fun.
Consolidate your business debt
One of the best advantages of short-term MSME loans is that they allow you to consolidate smaller debts and make them a single EMI. This not only reduces the strain on your monthly budget but also helps in aligning your debt repayment with your invoicing schedule. Moreover, by consolidating business debt, you may be able to reduce the amount that you are currently paying for sundry debts as now you have the option to expand the repayment schedule up to 12 months.
Invest in Marketing
Marketing helps in growing your business by expanding its outreach. There are two things that can be accomplished with an effective marketing strategy. One, reinforcing the trust and loyalty of existing customers in your brand. Two, acquiring new customers in existing or new markets. However, marketing is a costly affair and a comprehensive online and offline marketing campaign requires investment. An MSME / SME loan fund can give you the financial backing for running such a campaign.
Calculating an MSME / SME Loan EMI
MSME / SME Loans EMI
Equated Monthly Instalments (EMIs) break down a loan into easily repayable financial units. Each unit contains a component of the principal amount and the accrued interest. Flexible EMI schedules offered by lenders like Lendingkart Finance help you in one of the two ways.
Either you can repay your loan with ease by breaking it down in small monthly instalments. Or, you can speed up the repayment of your financial debt by opting for bi-weekly instalments, halving the repayment cycle. You can also avail refinance for the previously approved loan amount with Lendingkart’s auto-renewal option.
How to Calculate MSME / SME Loans EMI?
The MSME / SME Loans EMI calculation is done on the basis of a simple formula i.e.
E = P x r x (1+r)n/(1+r)n-1
Here,
‘E’ is the EMI
‘P’ represents the loan amount
‘r’ stands for the interest rate offered on a monthly basis
‘n’ is the duration of the loan
Our MSME / SME loan EMI calculator is a digital version of this formula, that allows you to calculate EMI amount through a web interface. The loan EMI calculator can help you understand the breakdown of interest and principal loan amount, thus, allowing you to decide the layout of your cash resource planning.
What to do and not to do when applying for an MSME loan online
Since the lending market operates on caution and precaution, here are some of the things that you should do and not do when applying for an MSME loan. These steps can help in improving the probability of getting a loan for your business and reduce the risk of rejection.
Do’s
- Check your credit score before moving an application for MSME or SME loan. Most lenders rely on credit rating for preliminary loan approvals.
- Get your documentation in order before starting the loan application process. For Lendingkart MSME loans, make sure that you have all the required documents in digital format as we do not accept physical copies at the time of application.
- Prepare a business plan that specifies how you intend to use the loan funds and how much time it might take to generate positive returns from the investment. Every lender may not ask for it but it is good to have a business plan ready to assuage a lender’s concerns.
- Assess your MSME loan requirements before applying. Try not to overestimate or underestimate your loan requirements as in both cases you will end up wasting time and money.
Don’t’s
- Do not apply with multiple lenders as it will reduce your credit score by several points. It also shows financial desperation on your part, which might put off potential lenders.
- Do not delay your repayments for existing debts even if you are taking the MSME loan for debt consolidation. It has a negative impact on your credit score and financial goodwill.
- Do not go for lenders who charge you an upfront fee. There are many fraudulent lenders in the online space who may ask for huge fees for approving your MSME loan application. A genuine lender like Lendingkart Finance will never ask you for an upfront fee and only charges a percentage upon disbursal of the loan.
MSME Loan / SME Loan FAQs:
Top Disticts we serve in India
MSME Loan News:
MSME ministry makes Aadhaar authentication for informal micro units voluntary to boost Udyam registration
The MSMEs ministry has made Aadhaar authentication for informal micro enterprises voluntary to facilitate access to priority sector lending. The MSMEs ministry has made Aadhaar authentication for informal micro enterprises voluntary to facilitate access to priority sector lending. The notice came after the federal government received the proposal for Aadhaar authentication from the MSME ministry, which stated that it was done “in the interest of good governance, Government allowed the ministry to improve access to services. Linking businesses with Aadhaar helps the government address the challenges faced by potential beneficiaries, but it is voluntary to ensure promoters are comfortable with sharing their Aadhaar details.
News Updated Date: 31st May 2023
NBFCs lending to small businesses to see $15bn deal flow by FY33
According to the survey, only 14% of India’s 6.4 crore MSMEs have access to loans. Overall their financial status is $1,955 billion out of which $1,544 billion is in debt. The market size is projected to be $819 million, of which only $289 million is satisfied by formal credit, considering that slightly more than half of this demand comes from viable enterprises.
According to Anshul Agarwal, MD & co-head of consumer, financial institution, and business service group at Avendus, this industry is confronted with a significant challenge of a $500 billion crediting gap and $100 billion exists for the small ticket loan segment. We think that MSMEs are the backbone of our economy and that their expansion is essential for us to reach a GDP of $10 trillion and that this market is beginning a virtuous cycle, and lenders in this market will be able to produce a 20% return on equity over the long term.
NBFCs are regarded as being more advantageous than banks due to their extensive presence and low-cost branches. Additionally, they perform better at finding clients and determining the clients’ capacity for payback.
News Updated Date: 15th May 2023
MSME Credit Demand Surges, While Default Rates Decline: Cibil Data
The demand for credit from MSMEs in India increased by 31% YoY in January 2022, while overdue loan accounts decreased by 29%, according to CIBIL. This suggests that the Indian government’s emergency credit guarantee scheme launched in 2020 has successfully supported MSMEs during the pandemic. The scheme has been extended several times, and lower interest rates have helped businesses access credit, leading to a growth in demand for credit. Experts attribute the default drop to loan restructuring under the scheme and improved economic conditions.
The growth in credit demand is a positive sign for the Indian economy, as businesses start investing and expanding again after the pandemic-induced slowdown. However, some experts express concerns about the sustainability of this growth due to ongoing uncertainty around the pandemic and rising inflation’s potential impact on businesses.
The Indian government’s credit guarantee scheme has provided MSMEs with loans up to INR 2 crore ($270,000) at a concessional interest rate of 7.5% for up to five years, with 75% of the loan amount guaranteed by the government. This has encouraged MSMEs to borrow and invest in their businesses, leading to a surge in credit demand.
In summary, the Indian economy is gradually recovering from the pandemic-induced slowdown, with MSMEs playing a critical role in this recovery. The continued success of the credit guarantee scheme will be crucial in sustaining this growth and ensuring MSMEs can access the credit they need to thrive.
News Updated Date: 04th April 2023
Emergency Credit Line Guarantee Scheme – MSMEs Received A Loan Of 3 Lakh 61 Thousand Crore Rupees
The Emergency Credit Line Guarantee scheme was announced in 2020 as a part of the Aatmanirbhar Bharat Abhiyan to assist qualifying MSMEs and business companies in restarting their operations in the wake of the disruption of the COVID-19 pandemic.
Under the Emergency Credit Line Guarantee Plan, loans of 3 lakh 61 thousand crore rupees have been given access to Micro, Small and Medium Enterprises, or MSME. The 1 crore 19 lakh borrowers have profited from this. Dr Bhagwat Kisanrao Karad, Minister of State for Finance, stated in a written response to a question in the Lok Sabha that this programme encompasses all economic sectors.
News Updated Date: 20th March 2023
SIDBI to offer Unsecured Loans to MSMEs via Co-lending Spaces
To offer MSMEs Unsecured Business Loans, SIDBI collaborates with Ambit Finvest Pvt. Ltd. SIDBI has never co-financed a project with a non-banking financial institution before (NBFC). The joint venture is following the Reserve Bank of India’s most recent Co-Lending framework. When NBFCs and Banks combine their strong balance sheets through co-lending, everyone benefits.
The geographical reach of banks can be increased while they still meet their lending requirements for the priority sectors. The MSMEs, which can get financing more quickly and for a lower cost, are the real winners.
News Updated Date: 4th January 2023
Crisil Estimates MSME Credit to Grow 16-18% In the Forthcoming Fiscal Year
Working effortlessly on a broad-based economic recovery and robust, sophisticated balance sheets, now the lenders can expect their credit to grow at 15% at the start of the next fiscal year. A report was published on Tuesday mentioning the credit growth of the current fiscal to be around 18% which seems quite a decadal high.
So far, the large lenders are observing corporations lining up with banks for funds. These funds are required for capital expenditure and working capital due to the demanding side of the economy getting better. Following are some crucial facts according to the reports printed:
- The agency predicts credit growth to be attracted more by retail and MSME sectors, while corporate credit might see the larger contributor next fiscal.
- The MSME segment is estimated to get a reasonable hike rate of 16-18% over this fiscal and 2023 as well.
- While agriculture credit growth might hover around 10%, backed by fairly normal monsoons and harvest.
- In Q2, SBI had the best corporate loan sales in terms of 20% growth, and most other lenders are private sector banks.
- Bank credit is estimated to experience a growth of 15% per annum in the coming fiscal.
- The agency clarified that Crisil’s forecast is viable on an awaiting 7% GDP growth seen in this fiscal.
- They expect continual credit push from the infrastructure of government disbursement; greater working capital entails a high-inflation environment and few enhancements of debt capital market borrowings.
- After a substantial equity infusion, state-run banks might see higher growth.
- The state banks’ credit growth is reported at 12% over the 2021 fiscal year, which is still more scarce than the 17% expected for private banks.
A senior director at the agency, Krishnan Sitaraman, states that corporate credit having 45% of overall credit can fluctuate at a 2-year compounded annual growth rate of around 10-12% until March 2024.
Retail credit, consisting of 26% of the total advances, is estimated to rise the fastest at 17-19%, powered by home loans as the largest sub-segment rather than the increasing interest rates and real estate prices.
News Updated Date: 24th November 2022
Union Cabinet has increased the scheme outlay of ECLGS to Rs.5 lakh Crore
The Emergency Credit Line Guarantee Scheme was launched in the pandemic situation to help the small enterprises struggling with the decreased economy. The main objective of this scheme is to provide 100 percent guarantee coverage to Banks and NBFCs and it will help them to extend the emergency credit facilities to MSMEs and Business Enterprises. This scheme has been later expanded to incorporate more sectors.
Due to disruptions in hospitality, the outlay of ECLGS schemes has increased. The outlay of the scheme has been raised to Rs. 5 lakh crores from 4.5 lakh crore.
The additional amount of Rs.50,000 crore is especially for hospitality and related sectors. This amount will be helpful for the Business enterprises to meet their operational liabilities.
The add-on Rs. 50,000 crores will provide reassurance for the lending institutions to give an additional amount at a low cost. The validity of the ECLGS Scheme along with the additional amount is extended up to March 31, 2023.
News Updated Date: 24th August 2022
MSMEs to now get CIBIL score from SIDBI
In a bid to boost the credit culture among MSMEs, the Small Industrial Development Bank of India (SIDBI) is planning to give a CIBIL score to all MSMEs registered with it. This would help in better credit payback, and ultimately improve their business operations.As per the Central Bank of India, it will be mandatory to have CIBIL Score for MSMEs from January onwards. And this is a big step towards bringing transparency and accountability in the Indian system. All MSMEs are required to register themselves with CIBIL and get Score by next year.
The scheme of making MSMEs open to micro crunch funding and providing a CIBIL score for them to avail funds from the SIDBI is now on. This move is expected to benefit around 80 lakh MSMEs
News Updated Date: 09th August 2022
New Apparel Park to Open Up in Lucknow’s Malihabad
In Lucknow’s Malihabad area, a new project will be taking place. It is called an apparel park that would assist in employment of about five lakh people, as per UP government;s MSME minister Rakesh Sachan. The plan has been given the seal of approval by Yogi Adityanath government. It has been reported that it will be one of the biggest projects yet with about 1000 acres of the area reserved for it.
Moreover, it will come under the jurisdiction of the PM Mitra scheme and an allowance of ₹1000 crore will be given to it. The state capital will now have the opportunity to offer employment opportunities to the people.
News Updated Date: 26th July 2022
Growth in MSME loans for FY22 surpasses pre-Covid levels by 36%
The loan portfolio outstanding of micro, small and medium enterprises (MSMEs) rose to Rs 22.7 lakh crore in March 2022. There were 137.4 lakh active loans for the MSME sector, an increase of 7 per cent from March 2021.
Following are the trends before after pre-covid of MSME loans:
- Increase of 36 percent in March 2020
- 18 percent over March 2021
- For 181-360 days, PAR held steady at 0.3%
- PAR for 360 days past due improved from 2.5 percent in March 2021 to 2.2% by March 2022
Between FY20 and FY22, the market share of private banks increased from 33.6% to 69.8%. NBFCs and public banks saw their market share decline. PSU banks’ average ticket size in FY22 was 28.6 lakh, while foreign banks’ was 502.6 lakh.
News Updated Date: 1st July 20202
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