sme business loan

Benefits of Registration for SMEs

MSME refers to micro, small and medium enterprises. Partnerships firms, one-person companies, limited companies, cooperative societies, and Hindu undivided families can obtain MSME registration in India. The eligibility criteria for qualification as MSME depends on the enterprise’s investment and turnover. For instance, enterprises with investments of less than one crore and turnover of less than five crores are classified as micro-enterprises. Below listed are the advantages of obtaining registration for small and medium enterprises. 

  • Reduced Interest Rates

Availability of business loans for starting a business is difficult for small business owners. However, with MSME registration, financial institutions offer loans at reduced interest rates. It also becomes easier to access credit as the lenders give MSME entities priority. 

  • Exemptions from Income Tax

Small enterprises can avail of income tax exemptions with an MSME registration. Furthermore, such enterprises are exempted from carrying out audit procedures with registration certificates. 

  • Technological Support

The technological up-gradation requirements of MSME units are reimbursed by the government. This promotes cost-effectiveness and promotes clean energy use for enterprises. 

  • Subsidies

All companies registered under MSME registration are eligible for promotion subsidies. Such subsidies promote the growth of these enterprises, and the limit may be set by the government from time to time. 

MSME can avail of loans that are specific to their business on fulfilment of business loan eligibility criteria. The primary utilisation of such loans is to meet the working capital requirements, facilitate the expansion of businesses, and for increasing the cash flow of the business. For availing of such loans at attractive interest rates and flexible repayment tenures, contact us.

Additional Read: 5 Steps to Apply for MSME Loans?

How To Avail SME Business Loans For Growing Business?

sme

Loans that address the financial requirements of Small and Medium Enterprise are SME business loans. SME and MSME sectors provide substantial employment opportunities, primarily through industrialisation in rural and backward areas. It is also making important contributions to the nation’s GDP.

Generally SME loan are available under government schemes in conjunction with many banks and NBFCs. You can apply online by filling an online application form and submitting necessary documents, like:

  1. Identity Proof: Aadhaar Card, Driving License, PAN Card, Passport, Voter’s ID, etc.
  2. Address Proof: Aadhar Card, Driving License, Passport, Voter’s ID, etc.
  3. Proof of Business: Business Entity Proof, Incorporation Certificate, Partnership Deed, Shops and Establishment Certificate, etc.
  4. PAN Card: of the business entity and all partners/promotors.
  5. Financials documents: Audited financial statements, Balance Sheet, Profit and loss statement, Tax audit reports and VAT returns, etc., for the last three years.
  6. Bank Statements: For the previous six months.

To avail SME business loan, you should be a proprietor, a self-employed, or a partnership or private limited company. You should be in the age group of 21 to 65 years, the minimum annual income of your business should be Rs. 1.5 lakhs and you should be in this business for at least two years.

Additional Read: Startup Loans v/s SME Loans- Types of Business Loan