The Indian government offers many benefits for MSME firms. Among these is the MSME loan. MSME stands for Micro, Small, and Medium Enterprises. If you are an MSME Business owner, you should know the criteria for apply MSME loan online. 

What is an MSME loan?

An MSME loan is designed for entrepreneurs to start their business and for existing business owners to expand the business. MSME loans are easy to avail of and are a hassle-free way to cover all types of business expenses. 

Type of MSME loan

MSME loans are unsecured, given by many financial institutions to help small and medium business owners to meet their business expenses. Generally, the interest rate for MSME loans is 8.3 %, and it has a low ‘processing fee’. You can apply for a maximum of INR 500 crores under this loan category. 

The repayment tenure for such loans can be up to 15 years. MSME loans can be taken without any mortgage or collateral. 

How to apply for an MSME loan?

Being a business owner, you should know how to apply for an MSME loan. Many financial institutions have started providing MSME loans as per the RBI guidelines, and loan approval has become easy for business owners.

Here are some useful steps a small or medium business owner should follow-

• Business requirement assessment

Before applying for the loan, assess your business needs and select the loan amount based on them. 

• Loan Type

The loan amount should not exceed your requirement. There are some types of loans available like top-up, machinery, and distinct loan. Select the one according to your needs.

• Select the right lender

When it comes to MSME loans, there are many lenders available; select the lender according to the EMI, amount, rate of interest, and other facilities. Check the MSME loan criteria before you select the lender.

Additional Read: Top 5 Challenges of MSME Loans That You Should Know