Micro, Small and Medium enterprises are fundamental to the growth of India. They contribute almost 30% of India’s GDP, are responsible for 40% India’s exports and employ almost 11 crore people across the country. Recognizing the need and importance of MSME to the country, a slew of reforms and benefits have been announced by the government for MSME companies, including loans at a reduced rate.

For availing an MSME loan (https://www.fullertonindia.com/sme-msme-loan.aspx), the enterprise must be registered and hold Udyam registration or Aadhar Udhyog registration as it was known as previously. The registration can be obtained using the Aadhar of the promoter and the number is linked to other registration such as GST and Income Tax automatically.

Interest Rates and Process

Business loan interest rates for MSMEs are generally lower and provided at a much-subsidized rate in order to promote their growth and development. MSMEs can approach any financial institution in order to acquire such a loan and they may be granted the loan based on the eligibility criteria.

Documents Required

Whereas the finer details may vary, the following details are required to obtain an MSME loan:

1. Udyam or Udhyog Aadhar Registration
2. Balance Sheet audited by a Chartered Accountant
3. Income Tax Return
4. Bank Statements of the past six months
5. Financial Institutions might require MSME to be in operation for a certain period

Apart from obtaining loans at a cheaper interest rate, MSMEs get various advantages in government tenders and other spheres of business activities as well. An MSME registration might just be the step you need to boost your business.

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