Micro, Small, and Medium Enterprises (MSME) form an integral and significant part of the Indian economy. Hence, the Indian government supports the inception and growth of these enterprises through MSME loans. If you plan to start an MSME in the near future and want to borrow a loan for it, here’s how to apply for an MSME loan for your business.
What is a MSME?
As stated in the beginning, the full form of MSME is Micro, Small and Medium Enterprises. The companies are classified based on their investment and annual turnover. Let us look at those figures through the below table.
|Type of Enterprise||Investment Limit in Plant Machinery or Equipment||Turnover Limit|
|Micro Enterprises||Does not exceed one crore rupees||Does not exceed five crore rupees|
|Small Enterprises||Does not exceed ten crore rupees||Does not exceed fifty crore rupees|
|Medium Enterprises||Does not exceed fifty crore rupees||Does not exceed two hundred and fifty crore rupees|
Step by Step Process to Apply for MSME Loan for your New Business
Here’s how to apply for MSME loan for your business
- Visit udyogaadhar.gov.in
- Fill in details like the entrepreneur’s name, Aadhar Number, etc.
- Once you fill in all these details, click on validate and generate an OTP
- On generating the OTP, you receive an OTP on your mobile number, linked to your Aadhar
- Fill the OTP in the OTP window, and then click on Validate
- On clicking on Validate, an application form will open up
- Fill in the required details
- After filling in the application form, click on Submit
- The page asks you if you have filled everything correctly. If you have, click on OK to confirm
- Again, you will receive an OTP on your mobile number, linked to your Aadhar
- Enter the OTP and code given below in the window
- Click on Final Submit to submit your MSME loan application form
- You get a registration number above. Note it down for further references
The Financial Documents Required to Apply for MSME Loan for your Business
Applying for a MSME loan requires you to submit the following financial documents. So, before you fill in your application, you must ensure you have the below financial documents in place.
- Business registration proof
- Bank statement for the last 12 months
- Company PAN card and copy
- Copy of partnership deed
- Sales tax documents
- Proprietor PAN card
- Profit and Loss and balance sheet copy for the last two years
- Municipal tax document
Documents Required to Apply for an MSME Loan
In addition to financial documents, you will have to submit the below documents while applying for an MSME loan.
- Age proof (Passport, PAN Card, Voter ID Card)
- Identity proof (PAN Card, Voter ID Card, Passport, Driving License)
- Residence proof (Lease agreement, passport, telephone, electricity bills, sales tax certificate, trade license)
- Duly filled application form
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