The Documents Required for Getting a MSME Loan

SME is Small and Medium Enterprises, and they are the equivalent to MSME loans (Micro, Small, and Medium Enterprises). SMEs are attributable...

Written by Sheena Sharma
· 2 min read >

SME is Small and Medium Enterprises, and they are the equivalent to MSME loans (Micro, Small, and Medium Enterprises). SMEs are attributable to providing employment opportunities in the country and conjointly adding to the GDP of the country’s economy.

Thus, financial lenders offer them many kinds of business loans. And this is one such loan that is specially catered to the emergence and development of SMEs/MSMEs. MSME could use MSME loans to fund their needs of working capital, purchase new machinery, purchase inventory, expand the present business, improve the credit score, etc.

What is the MSME loan eligibility?

To MSME loans apply, the subsequent MSME loan eligibility criteria are required to be complied with are as follows:

  • MSME should be registered under the MSME act.
  • The business ought to be operative for over six months at the time of the MSME loan apply.
  • A proof showing the profitableness of the business.
  • Income Tax Return files during the last fiscal year to be over Rs. 1.5 lakhs.
  • The applicant’s age ought to be a minimum of twenty-five years at the time of MSME loan apply.

What are the features of SME/MSME loans?

There are many features of SME/MSME loans attributable to it being the favorable source of funds for MSMEs. Let’s have a glance at these features:

  • Collateral free loans that are a loan for business without security.
  • Online business loan.
  • Instant business loan.
  • Affordable/customized MSME loan interest rates.
  • Long/flexible repayment tenure.
  • No prepayment charges.

How to apply for an MSME loan?

The MSME must visit the website of the chosen financial lender and upload the filled MSME loan application form. In addition, they need to upload business loan documents. And easily submit the MSME loan application form.

Once the MSME loan application is submitted, the submitted documents and details shall be verified by the financial lender and consequently, the MSME loan shall be approved within few operating days.

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What are the business loan documents required for the MSME loan application?

Below detailed are the business loan documents that need to be uploaded while proceedings for MSME loan apply:

A) KYC documents: KYC documents generally needed are basic like:

  • An identity proof: Aadhar card, Pan card, Passport copy, Driver’s license copy, Voter’s ID, etc.
  • An address proof: Electricity Bill, Agreement copy, Ration card, Trade license, etc.

B) Entity documents: The entity documents are the ones belonging to the company such as:

  • Business registration certificate
  • Memorandum and articles of association
  • Other business proof documents

C) Financial documents: Documents representing the finances of the companies need to be provided which are as follows:

  • Copy of Income Tax Returns of last two financial years
  • An audited Balance sheet with Profit & Loss statements
  • Bank Account Statement copy for last 6 months

D) Forecasted Turnover

Apart from the above expressed general business loan documents, there may be extra documents needed by the financial lenders depending upon the business nature of the MSME. And it varies from one lender to another. Correct documents submitted by MSMEs can facilitate them obtaining a loan quickly.

To summarise, MSME loans have proved useful for the development and growth of the MSMEs attributable to the simple, fast, & hassle-less method to apply for MSME loans and also the basic nature of the business loan documents being needed.

Moreover, if a financial lender like Zip-loan is chosen for an MSME loan, then you will find the process to be more simplified, loan to be sanctioned relatively quick and additionally, you may conjointly get a custom-built loan offers.

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