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MSME Loan

Since the COVID-19 pandemic, business owners and industrialists have realised the importance of going digital. The pandemic saw large chunks of the population lose their jobs, which has led to a surge in the number of people looking to start a new business.

Investment is the key, whether you are looking forward to starting a new one, expanding your existing business, or planning to enter the digital world. A business loan can help you get the required money. You can apply for an MSME loan for a new business or run an existing one; these loans are specially designed for small and medium enterprises.


What is MSME (Micro Small And Medium Enterprises) loan?

The loans that are designed keeping in mind the criteria of a small or medium enterprise so that they can meet financial needs for different sectors of the business are what we call MSME loans. FlexiLoans is a renowned online platform that has been working on resolving the money matter through its various business loan schemes.

SMEs play a vital role in the Indian economy, as this is the sector where there is incredible employment opportunity, especially in rural areas. Thus, it is also called the "sunshine" sector. That is why the popularity of SME Loans is growing with every passing day.


Features Of MSME Loan

  • MSME Finance:

    A loan amount of 50,000 to 10 crores may be required to finance all of your business needs.

  • Quick Processing:

    Approval of a loan can be obtained within 3 business days with us due to our expedited disbursement process. A loan of up to Rs 10 crore is easily obtained. We make every effort to minimise the time necessary to implement the loan and also ensure that it is made accessible within the specified time span.

  • FlexiLoans Platform:

    Borrow and repay funds to suit your business's fast-evolving requirements in the form of MSME funding. Amounts range from 50,000 to 1 crore. If you're trying to replace old equipment, acquire new machinery, extend your production facility, or recruit additional employees, you can conveniently obtain the loan sum that suits your unique needs.

  • Maximum Loan Term of 48 Months:

    FlexiLoans provides adjustable repayment terms, allowing you to repay the loan on your terms.

  • There Are No Extra Charges:

    The loan quotes you get online contain the full amount you owe. Application costs are usually set at 2% of the loan volume. You can be stress-free about secret fees or other additional expenses.

  • Documentation in Digital Format:

    The loan process is electronic, from submission to acceptance and disbursement of funds

  • Rapid Approval and Funding:

    No more waiting impatiently to learn the condition of your loan. Loan processing and approval are usually completed within a few business days. After approval of the loan, the funds are electronically transferred to the bank.

  • Repayment Options:

    You will repay your remaining loan balance depending on your business's cash flow.


Benefits Of MSME Loan

  • Reliability:

    In the current Indian economic climate, running a company can be challenging. There can be limitations on funds due to the seasonality of demand and various other factors. Obtaining an MSME loan is simple and easy. The disbursement of loans occurs quickly, and the paperwork is also the least. The approval period is very short; certain firms, such as FlexiLoans, have approval periods as low as 24 hours.

  • Interest rates are lower:

    The more money you have on hand in a business context, the better prepared you are to take the risks that come with it. With low interest rates, MSME loans guarantee that only the bare minimum is expended on debt repayment, leaving the remainder available for other company needs.

  • Short term:

    MSME loans are mainly useful for small companies' short-term needs. The borrower is not expected to make a long-term commitment; this agreement provides more stability to the borrower. A short-term business loan also helps the management team control cash flow and deploy available capital effectively.

  • Full Capital Control:

    A small business would still need to meet its funding needs in the process of doing business. Equity is not easily obtainable, and alternative forms of financing such as angel investors and venture capitalists provide financing in exchange for a stake in the firm. A business person may dread the prospect of handing over the power of the enterprise. MSME loans are primarily intended to address the needs of small enterprises. They are an ideal source of capital for company owners seeking to escape management liquidation.

  • Accelerate the transition from strategy to implementation:

    Our lightning-fast processing period enables you to go from preparation to implementation in a couple of weeks rather than weeks or months. With an MSME loan from us, you can quickly advance in brand management, increase demand, and extend the supply network.

  • Retain ownership of the enterprise:

    Our MSME loans are collateral-free, which safeguards your precious assets in the event of loan default. Likewise, we do not assume ownership of your credit policies in exchange for interest, allowing you to maintain complete control of your priceless business at all times.

  • Improve the company's cash management:

    Our MSME loans are flexible and have diverse purposes. You may use them to increase your activities through the acquisition of plant and equipment or the establishment of a new site, or you could just use them to streamline your working capital and general cash flow.

  • Accessibility:

    SME loans are typically used by companies for short-term needs. It is adaptable since no long-term commitment is needed. Through a short-term investment, you can more reliably control the cash balance and distribute the available money. Since SME loans are typically used by companies for short-term needs. It is adaptable since no long-term commitment is needed. Through a short-term investment, you can more reliably control the cash balance and distribute the available money. Since SME loans are specifically designed to address the short-term needs of small companies in times of crisis, they are an ideal source of funding for entrepreneurs seeking to escape control liquidation in those circumstances. This enables them to exercise complete control of their businesses.


How to Apply for an MSME Loan Online at Flexiloans?

  • Online Application:

    Log on to the FlexiLoans website and complete the application form by correctly filling in the relevant information. FlexiLoans will use these details to assess your eligibility for the MSME loan.

  • Upload the required documents online:

    Upload all necessary documents, such as KYC documents, current account bank statements, and business KYC documents.

  • Credit Analysis:

    We'll assess your business results and operations to calculate the amount of money you'll be eligible to borrow and the interest rates that will apply. Our loan officers will assist you in understanding the bid and making the right decision.

  • Loan Disbursement:

    FlexiLoans will share the loan agreement after verifying the documentation and approving the loan. The fund is disbursed to the applicant's account within 48 hours after signing the document.


When is the best time to take out an MSME loan?

Under the following conditions, you can accept an MSME loan:

  • You're buying land in order to establish a business.
  • You're developing a factory.
  • You are purchasing manufacturing products such as machinery and vehicles.
  • You are purchasing raw materials to fulfill the business's capital needs.
  • You must pay payroll salaries, bills, and loans.
  • You wish to grow your company. You want to fund promotion and advertising.
  • You need funds to renovate the company

Eligibility Criteria for Online MSME Loan 

To ensure quicker loan approval, we kept the MSME Loans Guide short. Here is the paperwork you must provide to assure that your application is reviewed as quickly as possible.

  • An individual must be 21 years of age when applying for the loan and not more than 65. 
  • MSME loans are available to individual corporations, sole proprietors, and private companies involved in trading, production, or services.
  • The applicant must have worked in the industry for three years and have at least five years of experience.
  • provides MSME loans to businesses that have been in operation for at least a year and have at least $200,000 in monthly total sales.
  • If the company has been in service for even more than 3 years, you can apply for an MSME loan.
  • We would also ensure that there are no errors in previous accounts and, as such, the company is tax compliant.

Finally, verify that the paperwork is in order well in advance of applying for a loan with us and hold it in digital format to make submission feasible during the application process.


MSME Loan Interest Rate & Fees

Types of Fees Applicable Charges
Interest Rate Starting from 1% per month
Loan Amount ₹50,000 to ₹1 Crore
Loan Tenure Up to 48 months
Processing Fee 2% of the loan amount

Flexiloans offers MSME loans without collateral

MSME Loans do not require companies to put up any collateral in order to be approved. Small businesses are "asset-light," which means they can't afford to keep their equipment as collateral.

Small businesses do not entrust their precious assets to banks in exchange for cash because this could affect their competitiveness if anything went wrong. Collateral-free loans for MSMEs are generally offered to startups and small business entrepreneurs. As a result, an MSME loan for a startup business is a great way to get money whenever you need it


Examine the EMI for an MSME Loan

The sum you need, the maturity period, and the interest rate determine your monthly payment. The MSME business loan EMI calculator will help you figure out how much you'll have to pay per month.


Calculating the Equated Monthly Installment (EMI) on Business Loans

Computing an EMI manually is a time-consuming task with a high probability of error. Here is an example of a business loan. The EMI Calculator is convenient because it is fast, reliable, and simple to access while using. Everything that you have to do is input the principal (loan amount), the tenure, and the rate of interest to immediately obtain error-free data

E = P x r x (1+r)^n/ [(1+r)^n - 1]

Here,

  • E - EMI
  • P - Principal or loan amount
  • r- The rate of interest (calculated monthly)
  • n - tenure

Documents Required for MSME Business Loan

  • Personal KYC: Rent agreement, driver's license, voter ID, ration card, Aadhaar card, passport
  • Banking: Last six months’ current account bank statement
  • Business KYC (anyone): GST registration certificate, shops, and establishment certificate
  • 2 years for financial documents (for loans in excess of Rs. 20 lakhs). Audited financials, last 2 years' ITR, GST Six-month returns 

Financing your company is no longer a daunting task in today's world, thanks to a multitude of available choices. We ensure this through our MSME loans, which assist entrepreneurs in starting companies and developing world-class goods capable of competing globally. It goes without saying that companies will depend on us to meet their financial obligations. However, before obtaining such a loan, determine the loan's urgency. Once established, simply follow the very first four phases and contact us to apply for a business loan.


Dos and Don'ts While Applying for an Online MSME Loan

DOs

  • Do your research. Before applying for an online MSME loan, you must research and understand the different options available. Various types of loans are available, with varying rates of interest and repayment terms, and it would be best to compare all options before choosing a loan.
  • Track your repayments. Once you have taken out a loan, keeping track of your rebates is essential. This will help you stay on top of your finances and ensure you do not miss any payments.
  • Have all your documents ready. When preparing to apply for an MSME loan, ensure you have all the required documents, including business registration documents, financial statements, tax returns, etc

DON'Ts

  • Don't forget to read the fine print: Be sure to read the loan's terms and conditions before applying to be aware of the repayment terms, interest rates, and other charges that may be applicable.
  • Do not overborrow. When applying for a loan, only borrow an amount you can afford to repay. Overborrowing can lead to financial difficulties and may damage your credit score.
  • Don't provide false information. You must provide accurate information when applying for a loan. Lenders will often verify the information you provide, so it is not worth providing incorrect information to try and get a loan.

MSME Loan News 

1. The ECLGS scheme has been expanded to Rs. 4.5 lakh crore.

The government of India has expanded the ECLGS scheme to Rs. 4.5 lakh crore to provide better financial assistance to those in need. This expansion will help approximately 25 lakh people avail of loans from microfinance institutions (MFIs).

2. SBI launches a new business loan scheme to support the healthcare sector.

To support the healthcare sector during the COVID-19 pandemic, SBI has launched a new business loan scheme that offers up to Rs 100 crore in loans to healthcare entities. The repayment tenure for these loans is up to 10 years, and they are collateral-free for amounts up to Rs 2 crore.

3. The Government of India allocates Rs. 9 lakh crore for the Mudra scheme.

The government of India has allocated Rs. 9 lakh crore for the Mudra scheme, which offers financial assistance to budding entrepreneurs across the nation. Of this amount, approximately 70% is earmarked for women under the Pradhan Mantri Mudra Yojana (PMMY).

4. The RBI announces funding support of Rs. 50,000 crores to tackle COVID-19.

To tackle the second wave of COVID-19 in India, the Reserve Bank of India (RBI) has announced funding support of Rs. 50,000 crores. This funding will be available through incentivized loan schemes for healthcare, manufacturing, and logistics enterprises.

Vaccine manufacturers, hospitals, medical equipment makers, and patients can avail of these loans from private and public sector banks, NBFCs, Micro Finance Institutions (MFIs), and Small Finance Banks (SFBs).

5. The RBI defers non-performing assets until September 30, 2022.

Relief to NBFCs & MSMEs In a move that will bring relief to NBFCs, the RBI has deferred the implementation of the circular on non-performing assets (NPAs) until September 30, 2022. Before taking this decision, the central bank knew about the difficulties faced by the non-banking finance sector.

The pandemic-induced lockdown has severely weakened the MSME sector in India. We can expect a move by the RBI to help these businesses by not tagging the extended loans as NPAs, allowing them to seek further loans. Union Budget 2022: A Program

6. A programme worth Rs. 6,000 crores will rate MSMEs.

The Union Budget for 2022–23 has allocated a programme worth Rs. 6,000 crores to rate the ministry of micro, small, and medium enterprises. The government will roll out the plan over the next five years, and we are aiming to improve the competitiveness and productivity of MSMEs while providing them access to formal sources of finance.

There is a plan in the budget to launch an e-portal called Desh Stack to facilitate digital infrastructure. This is a much-needed boost for the MSME sector, which is struggling to recover post-COVID due to low income flow. The government will also encourage drone-related startups.

Frequently asked questions

What is the difference between MSME loans and SME loans?

MSME loans are specifically for Micro, Small, and Medium Enterprises, while SME loans can be for small or medium enterprises. MSME loans can be used for various purposes, such as working capital, machinery, and equipment. SME loans are usually for specific purposes, such as for the purchase of property or expansion. MSME loans usually have a lower interest rate than SME loans.

How to apply for an MSME loan without collateral?

To apply for an MSME business loan click on the link here. Fill the loan application and upload the documents online our team will then contact you regarding the loan.

What is the turnaround for MSME loans by Flexiloans?

Flexiloans offers a fast and simple online application process for MSME loans, with loan approval in as little as 24 hours. Loan amounts range from Rs. 1 lakh to Rs. 10 lakh, with repayment terms of up to 12 months. Interest rates start at 18% per annum. There are no prepayment or hidden charges.

What are the documents required for getting a quick MSME loan?

To apply for a quick MSME loan from Flexiloans, you must submit your KYC documents, bank statements for the last 6 months, and GST registration certificate. You will also need to provide a business plan if you are a new business. If you are an existing business, you must provide financial statements for the last 2 years.

KYC document

  • - Pan card

Proof of residential address (any one)

  • - Rent Agreement
  • - Driving License
  • - Voter's ID
  • - Ration Card
  • - Passport

Banking

  • - Last 6 months of bank statement of current account

Business KYC (any one)

  • - GST Registration Certificate
  • - Shop Establishment Certificate

Financial documents (For loans greater than 20 Lakhs)

  • - 2 years Audited financials
  • - Last 2yrs ITR
  • - GST Returns of 6 months

What are the purposes for which I can get a MSME loan via FlexiLoans?

FlexiLoans is here to provide you financial access for your business funding needs. You have to undergo simple and transparent Credit Evaluation, basic documentation before we disburse the loan. You may get loans via FlexiLoans for:
  • Expanding your business
  • Servicing regular working capital needs
  • Managing seasonal working capital requirements
  • Manage short term cash flow gaps

What is the Rate of Interest on MSME Loan?

Business loan Interest rates start at as low as 1% per month. However, it may depend on various factors like your loan amount, tenure, eligibility, etc.

What is the maximum term limit for MSME loans by Flexiloams?

The maximum term for MSME loans by Flexiloans is 12 months.

Are there any charges other than interest rate that I have to pay to avail the MSME loan?

We may charge processing fee to facilitate the loan towards legal and documentation charges. You may be charged penal charges for late or irregular payment behavior.

What are the processing fees and pre-closure charges for MSME loans?

We charge a processing fee of 2% depending on your loan amount.

What determines my sanctioned loan limit, and how can I increase it?

Your loan limit is decided by your business turnover, credit score, and repayment history. You can improve your chances of getting a higher loan limit by maintaining a good credit score and having a strong repayment history.

Who can get a MSME business loan?

At FlexiLoans to those businesses whose business has been running for at least 1 year and has monthly total sales of at least ₹2,00,000

How can I check my MSME loan details and EMI due date?

Send an email on connect2@flexiloans.com to get the details of your loan.

How do I register my business with MSME?

If you are looking to register your business with MSME then follow our detailed guidelines on MSME registration process. You can apply by following the process of MSME registration for your existing company if it was not registered earlier under MSME.

How can I repay my MSME business loan faster?

You can make repayments on your MSME business loan through EMIs. You can also choose to prepay your loan without any penalties. You can make partial or full prepayments through the Flexiloans website or mobile app.

How can I utilize an MSME loan fully?

You can use your MSME loan for various purposes, such as working capital, machinery, and equipment. You can also use it for business expansion.

How to renew my MSME loan after repayment/prepayment?

You can renew your MSME loan after repayment or prepayment by logging in to the Flexiloans website or mobile app and submitting a new loan application. Your new loan limit will be decided based on your business turnover, credit score, and repayment history.

FlexiLoans is here to provide you financial access for your business funding needs. You have to undergo simple and transparent Credit Evaluation, basic documentation before we disburse the loan. You may get loans via FlexiLoans for:

  • Expanding your business
  • Servicing regular working capital needs
  • Managing seasonal working capital requirements
  • Manage short term cash flow gaps

Quick credit assessment ensures fast disbursal of loan at best rates and flexible terms, thus providing financial access at a click! Our business is to help you grow your business.

Interest rates start at as low as 1% per month. However, it may depend on various factors like your loan amount, tenure, eligibility, etc.

KYC document

  • - Pan card

Proof of residential address (any one)

  • - Rent Agreement
  • - Driving License
  • - Voter's ID
  • - Ration Card
  • - Passport

Banking

  • - Last 6 months of bank statement of current account

Business KYC (any one)

  • - GST Registration Certificate
  • - Shop Establishment Certificate

Financial documents (For loans greater than 20 Lakhs)

  • - 2 years Audited financials
  • - Last 2yrs ITR
  • - GST Returns of 6 months

We may charge processing fee to facilitate the loan towards legal and documentation charges.

At FlexiLoans to those businesses whose business has been running for at least 1 year and has monthly total sales of at least ₹2,00,000

Send an email on connect2@flexiloans.com to get the details of your loan.

If you are looking to register your business with MSME then follow our detailed guidelines on the MSME registration process. You can apply by following the process of MSME registration for your existing company if it was not registered earlier under MSME.