Apply for MSME/PSB Loans in 59 Minutes – All You Need to Know

As an MSME entrepreneur, securing funding is essential to ensure that your business grows and remains sustainable in the long term. However, the traditional loan application process can be time-consuming and daunting, especially for small business owners. The good news is that the Government of India has introduced the 59-minute loan scheme, which aims to simplify and expedite the loan application process.

Steps to Obtain MSME loans in 59 Minutes

In this article, we will discuss the steps to obtain MSME loans in 59 minutes.

Step 1: Eligibility Check

Before applying for an MSME loan in 59 minutes, you need to check your eligibility for the scheme. The eligibility criteria for the scheme are as follows:

• Your business must have a GST registration.
• The borrower must have a PAN card.
• The business should have a good credit score.

Step 2: Registration on the Portal

To apply for an MSME loan in 59 minutes, you need to register on the portal. Visit the official website, and click on the “Apply Now” button. You will be asked to provide basic information about your business, such as your name, contact details, and GSTIN. Once you have entered the required information, click on “Get OTP” to receive a one-time password on your registered mobile number.

Step 3: Loan Application

After successfully registering on the portal, you can proceed to the loan application process. Here are the steps to follow:

Step 3.1: Provide Required Details

Once you have logged in to the portal, you need to provide some details about your business, such as the amount of loan required, the purpose of the loan, and the type of loan (working capital or term loan).

Step 3.2: Upload Required Documents

To apply for an MSME loan in 59 minutes, you need to upload some essential documents, such as bank statements, income tax returns, and business registration documents. The portal will guide you on the required documents, and you need to ensure that the documents are clear and legible.

Step 3.3: Apply to Multiple Lenders

After uploading the required documents, you can apply to multiple lenders simultaneously. The portal will automatically assign your loan application to selected lenders based on their credit policy.

Step 4: Approval and Disbursal

Once you have submitted your loan application, the lenders will conduct a credit evaluation to assess your eligibility for the loan. If your loan is approved, you will receive an offer letter from the lender, which will contain the loan amount, interest rate, and other terms and conditions.

After accepting the offer letter, the loan amount will be disbursed to your bank account within a few days.

Tips to Ensure Successful MSME Loan Application

• Ensure that all your documents are accurate and up-to-date before uploading them on the portal.
• Make sure that your credit score is good to increase your chances of getting loan approval.
• Provide complete and accurate information about your business, including its financial position, to the lenders.
• Do not apply for multiple loans simultaneously, as this can negatively impact your credit score.

Benefits of MSME Loans in 59 Minutes

The 59-minute loan scheme offers several benefits to MSME entrepreneurs, including:

1. Streamlined Application Process

The loan application process for the 59-minute loan scheme is entirely online, which makes it convenient and easy for small business owners. The portal provides step-by-step guidance, and the application process takes just a few minutes to complete.

2. Quick Approval

The loan approval process for the 59-minute loan scheme is swift, with lenders providing an offer letter within a few hours of receiving the loan application. This helps small business owners access funds quickly and address their urgent financial needs.

3. Competitive Interest Rates

The 59-minute loan scheme offers competitive interest rates, which are based on the borrower’s creditworthiness and other factors. This makes it an attractive option for small business owners who want to borrow funds at affordable rates.

4. Multiple Lender Options

The portal for the 59-minute loan scheme offers the borrower the option to apply to multiple lenders simultaneously. This increases the chances of loan approval and allows the borrower to choose the lender that offers the best terms and conditions.

5. Transparent Process

The 59-minute loan scheme is a transparent process that provides borrowers with complete information about the loan, including the interest rate, repayment period, and other charges. This helps borrowers make informed decisions and avoid any surprises later on.

Challenges of MSME Loans in 59 Minutes

While the 59-minute loan scheme offers several benefits, there are also some challenges that small business owners may face, such as:

1. Stringent Eligibility Criteria

The eligibility criteria for the 59-minute loan scheme are stringent, which may disqualify some small business owners from accessing the funds. For example, the borrower must have a good credit score and a GST registration, which may be challenging for some businesses.

2. Limited Loan Amount

The loan amount that small business owners can access through the 59-minute loan scheme is limited, which may not be sufficient to meet their financial needs. In such cases, the borrower may have to explore other loan options.

3. Collateral Requirement

Some lenders may require collateral to secure the loan, which may be a challenge for small business owners who do not have sufficient assets to pledge as collateral.

Tips to Get MSME Loans in 59 Minutes

Here are some tips to help small business owners improve their chances of getting approved for a loan under the 59-minute loan scheme:

1. Maintain a Good Credit Score

A good credit score is one of the most important factors that lenders consider when reviewing a loan application. Small business owners should ensure that they have a good credit score by paying their bills on time, avoiding defaults, and minimizing their debt-to-income ratio.

2. Provide Accurate Information

Small business owners must provide accurate and complete information in their loan application to avoid delays or rejection. They should also ensure that the information provided matches the supporting documents, such as bank statements, tax returns, and financial statements.

3. Have a Business Plan

Lenders may ask for a business plan to evaluate the viability of the business and the purpose of the loan. Small business owners should have a detailed business plan that includes the business’s goals, marketing strategies, financial projections, and the expected impact of the loan on the business.

4. Keep Documents Ready

Small business owners should keep all the necessary documents ready before applying for a loan under the 59-minute loan scheme. The documents required may vary depending on the lender and the loan amount, but some of the common documents include identity proof, address proof, bank statements, tax returns, and financial statements.

5. Choose the Right Lender

Small business owners should research and compare the different lenders on the portal to find the one that offers the best terms and conditions. They should also read the fine print carefully and understand all the fees and charges associated with the loan.

Alternative MSME Loan Schemes

Apart from the 59-minute loan scheme, there are several other loan schemes that MSMEs can explore to meet their financial needs:

1. Mudra Loans

The Mudra loan scheme is an initiative by the Government of India to provide loans up to Rs. 10 lakhs to MSMEs. The loans are provided under three categories, namely Shishu, Kishor, and Tarun, depending on the loan amount and the stage of the business. The Mudra loan scheme is an excellent option for small business owners who need funds for working capital, machinery purchase, or business expansion.

2. CGTMSE

The Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) is a loan scheme that provides collateral-free loans up to Rs. 2 crores to MSMEs. The scheme covers both new and existing businesses and offers a credit guarantee cover of up to 75% of the loan amount. The CGTMSE loan scheme is an excellent option for small business owners who do not have sufficient collateral to pledge for a loan.

3. SIDBI

The Small Industries Development Bank of India (SIDBI) offers several loan schemes to MSMEs, such as the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE), Sustainable Finance Scheme, and the National Manufacturing Competitiveness Program. SIDBI loan schemes are an excellent option for small business owners who need funds for working capital, machinery purchase, technology upgradation, or business expansion.

4. Pradhan Mantri Mudra Yojana (PMMY)

The Pradhan Mantri Mudra Yojana (PMMY) is a loan scheme that provides loans up to Rs. 10 lakhs to micro and small enterprises. The loans are provided under three categories, namely Shishu, Kishor, and Tarun, depending on the loan amount and the stage of the business. The PMMY loan scheme is an excellent option for small business owners who need funds for working capital, machinery purchase, or business expansion.

Conclusion

MSMEs play a vital role in the growth and development of the Indian economy, and access to affordable finance is critical for their success. The 59-minute loan scheme is an excellent initiative by the Government of India to support the growth of MSMEs by providing quick and easy access to loans. Small business owners must meet the eligibility criteria, provide accurate information, and maintain a good credit score to increase their chances of loan approval. MSMEs can also explore other loan schemes available in the market to find the best loan option for their business needs. By being proactive and leveraging the available loan schemes, MSMEs can achieve their business goals and contribute to the country’s economic growth.