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 Lendingkart MSME / SME Loans from Lendingkart

  1. Ticket Value up to ₹ 2 Crore

    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.

  2. Apply for MSME / SME Loan Online

    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.

  3. MSME / SME Loan in 3 Days

    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.

  4. MSME / SME Loans without Collateral

    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.

  5. Best Interest Rates for MSME / SME Loans

    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.

  6. Flexible Repayment Tenure

    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.

  7. No Hidden Costs

    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.

  8. Zero Prepayment Charges

    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 / SME Loans by 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.

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MSME / SME Loans Fees & Interest Rates

Customized Interest Rates15 to 27% *
Processing Fees2-3%
Loan Tenureup to 3 years
Pre-closure ChargesNil**
Eligibility Criteria> ₹ 90,000 turn over for 3 Months
Loan Amount₹ 50,000 – ₹ 2 crore
InstallmentsFlexible 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

  1. An established business that has been in operations for more than 6 months.
  2. A minimum turnover of ₹ 90,000 or more in the 3 months preceding your loan application.
  3. The business should not fall under blacklisted / excluded list for SBA finance.
  4. The physical location of your enterprises should not be in the negative location list.
  5. 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

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Documents Required for a MSME / SME Loans

 ProprietorshipPartnershipPvt. 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

  1. Submit Application

    Simply enter your personal, business and financial info to receive a MSME / SME Loans offer.

  2. Upload Documents

    Upload digital copies of your documents in a single step process for verification.

  3. Get Sanctioned

    Receive your MSME / SME Loans approval and disbursal within 3 working days.

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Smart ways to use MSME / SME loans

Here are 5 smart ways you can utilize the funds of an MSME / SME loan.

  1. 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.

  2. 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.

  3. 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.

  4. 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.

  5. 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

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 / SME Loan FAQs:

Top Disticts we serve in India

MSME Loan News:

7,000 Jobs To Be Available With Four New MSME Industrial Clusters

The Tamil Nadu Government has announced a major reform. It is expected to change the lives of people who lost everything during the Covid-19 pandemic.

The Tamil Nadu Small Industries Corporation Limited has confirmed that it will set up four new MSME Industrial Clusters under the guidance of the Tamil Nadu Government. The units will be established in Chengalpattu, Trichy, Tiruvallur, and Madurai. It is estimated to cost around ₹218.22 crores to the Government. The money spent will be worth it as it will generate 7,000 jobs in the state. T M Anbarasan, the Minister of Rural Industries, assured that the fact was true.

The Coimbatore Sidco Industrial Estate Manufacturer’s Association is set to put a cherry on the cake. It has announced that it will also contribute to the direction of generating employment. It has committed to establishing a private industrial park with the assistance of ₹9.06 crore. It will receive the money from the Tamil Nadu Government in the form of a grant.

Updated Date: 14-09-2021

Nirmala Sitharaman Has Launched New Funds for MSMEs

The Union Finance Minister of India, Nirmala Sitharaman, has launched the Ubharte Sitaare Fund. The fund targets entrepreneurs who are operating in micro, small, and medium enterprises. The responsibility to spread awareness about the fund has been laid on Sidharth Nath Singh, the state’s MSME Minister. He has accepted the responsibility and plans to implement it by setting up MSME chambers in various districts.

While launching the fund, Nirmala Sitharaman said that the Modi Government had been working for the MSME sector for a long time. It first gave the MSME sector a proper definition. Now, with the announcement of the fund, the Government has rightfully given the sector its much-deserved place. The Ubharte Sitaare Fund, set up by Exim Bank & SIDBI, is expected to make India a major hub of exports. A company will be identified under the Ubharte Sitaare Programme (USP) only if it shows potential to fulfill global demands in the future.

Updated Date: 06-09-2021

The special financial package for MSMEs

The MSME (Micro, Small and Medium Enterprises) sector has been severely hit by the Covid-19 pandemic as when lockdowns were imposed, business stopped altogether and even today there are several restrictions and barriers that these businesses have to go through. The Union Minister for the MSME Sector said that his team has been making all efforts possible for the revival and betterment of the MSME sector and during a recent meeting he also informed that a special financial package for businesses under this sector was going to be introduced. The support of the government, subsidies on interest rates of loans, etc are necessary for the upliftment of the MSME sector.

Updated Date: 23-08-2021

A rise of 40% in loan disbursement for MSME sector in FY21

TransUnion Cibil MSME Pulse Report states that this year, i.e., in FY21 lenders have distributed loans worth ₹9.5 trillion to various micro, small and medium Entrepreneurs (MSMEs), as much as 40% higher than the previous year’s ₹6.8 trillion, showed findings from the most recent edition of the Sidbi.

The report states that this surge came into existence due to a government like Emergency Credit Line Guarantee Scheme (ECLGS).

Previously, the total lending exposure in on-balance commercial sheets in India was ₹74.36 trillion in the month of March, with a Y-o-Y growth rate of about 0.6%. Credit exposure for MSMEs was ₹20.21 trillion in March, a year-on-year growth of 6.6%, as the report stated.

It also stated a huge surge in credit demand after the unlocking of the economy post both the waves of the pandemic. Initially there was a drop in enquiries on commercial credit by 76% at the time of the first wave, but it recovered quite fast after the backing by ECLGS and have thereby sustained close to levels what it was before the pandemic, it said.

Update Date: 11-08-2021

Finance Minister Nirmala Sitahraman to monitor the process for clearing MSME dues within a span of forty five days

On Monday, replying to a question in the Lok Sabha, Union Finance Minister, Nirmala Sitharaman repeated the words of the Central Government that they would be clearing all the dues of the MSME’s within a span of 45 days. Sitharaman said that she would personally monitor this process. She further added that when they are speaking of the MSMEs dues, it is not only central government or central PSU dues but also state government and state PSU dues that needs to be cleared. So, the GST council would be taking the final decision for including the states in its schemes. 

MSMEs have played an important role in making India’s economy stronger by contributing 29 per cent to the GDP or Gross Domestic Product of the country and currently more than 11 crore people are employed by the MSMEs. Under the Emergency Credit Line Guarantee Scheme or ECLGS, the central government would be offering an amount of Rs 2.73 lakhs which would be given to around 1.09 crore MSMEs. This scheme is 100 percent backed by the central government.

Updated Date: 04-08-2021

The new definition of MSME that includes traders – retail as well as wholesale:

On the day of July 7, RBI asked all banks, Non-Banking Financial Companies (NBFCs) and financial institutions to redefine wholesale and retail traders as MSMEs to keep in accordance with revised criteria.

On 2nd July, Mr. Nitin Gadkari, Minister of MSME, announced that from now onwards, both retail and wholesale traders will be included in MSME for the sole limited cause of Priority Sector Lending, The central bank communicated to all banks that as loans disbursed to MSMEs fall under the PSL ambit and in accordance with the guidelines of RBI, all commercial banks are required to avail forty percent of the total lending to the priority sector whereas, for the small finance banks and regional rural banks, the PSL target is set at seventy-five percent of the total lending.

It further added that all those retail and wholesale traders who are in following trades namely – “Retail and Wholesale trade and repairing of motorcycles and motor vehicles with NIC code 45”, “Wholesale trade excluding of motorcycles and motor vehicles with NIC code 46” and “Retail trade excluding of motorcycles and motor vehicles with NIC code47” be permitted to register themselves on Udyam Registration Portal.

Previously, enterprises dealing in the service and manufacturing were considered as MSMEs because in June 2017, the government had removed wholesale and retail traders from the category of MSMEs.

Initially wholesale and retail businesses were covered under the definition of MSMEs according to the 2006 Act. But for reasons unknown, in 2017, the Central Government removed these traders from the MSME list saying that these entities were involved neither in manufacturing nor in service. Hence these traders could not get the benefits of MSME loans. But now with the redefinition of MSME, both retail and wholesale traders can reap the benefits that MSMEs can avail of.

Date Updated: 12-07-2021

90% of Rs 3 lakh Crore under Emergency Credit Line Scheme granted

As per a report by Crisil, banks have already lent around 90% of the 3 lakh crore Emergency Credit Line Guarantee Scheme (ECLGS) which was announced last year to support the small businesses during the 1st wave of the pandemic and the nationwide lockdown. So far, loans around INR 2.69 lakh crore have been disbursed under this scheme.

On Monday, the government decided to expand the Scheme value by another 1.5 lakh Crores, which as per Crisil could help alleviate the potential stress on asset quality of banks arising from the second wave of the pandemic.

The scheme has helped the MSME sector a lot and the banks as well as the scheme, coupled with steps like the loan moratorium and loan resolution framework has assisted contain banks gross non-performing assets at 7.5 % which is a lower value than that of March 2020.

Crisil feels that expanding the ECLGS value by 1.5 lakh crore would provide much needed support to the small companies and businesses which are the vulnerable segments of economy. During the times of this pandemic, with the second wave on the decline and the third wave not far, away it is best to ensure that the economy is strengthened enough to bear the wave at its full might.

Updated Date: 05-07-2021

Odisha to Introduce MSME Census to Revive the Collapsing Sector

The Odisha Government, with a view to boost the MSME sector, plans to conduct an MSME census. This, it believes, will help it frame policies aimed at boosting the same. MSME sector is the worst affected during the pandemic. The effort aims to identify the challenges MSMES faced at the time. Some of them include:

  1. Registration
  2. Availing credit guarantee
  3. Raw materials
  4. Tax-related problems
  5. Legal formalities
  6. Marketing of the final products

There is also three-year planning at the district level with the district collectors and others involved in the matter. This will help bring 25000 MSMEs under the Prime Minister’s Employment Generation Program, the Government hopes.

According to Satyabrata Sahu, the principal secretary of the MSME Department, the entrepreneurs here sustained the economy even during the pandemic. The Government also plans to change women ShGs to micro-entrepreneurs that focus on the field of packaging. With this in mind, the Government plans to rope in innovators in the sector. 0000The State also plans to utilize the central schemes in the field to the maximum.

The State leads in the Eastern region by sanctioning a maximum number of projects. It is also the second in the country in this regard.

Updated Date: 01-07-2021

World Bank approves funding of 500 million USD for 5.5 lakh firms under India’s MSME programme

Nearly a year after the 750 million USD provided as a part of the MSME Emergency Response Programme for the resurrection of the Covid-19 hit MSME sector of India. The World Bank has agreed to provide another funding of USD 500 million so as to help the companies that come under the MSME sector revamp and start accelerating towards projected goals while making giant strides in terms of progress and development thereby contributing in improving the economic condition of India as a part of the bigger picture. 

The 500 million dollar loan is aimed to support 5.5 lakh firms in India that have struggled due to the pandemic and the loan has a maturity 18.5 years including a grace of 5.5 years. The World Bank also decided to set up an MSME Council for good coordination and to ensure proper utilisation of the funds. The Council would come up with investment plans for the companies that fall under the MSME sector and provide them with growth plans as well as ideas to get their services more value in the market by increasing their scale of exposure and providing them working capital.

Updated Date: 14-06-2021