MSME / SME Loan


Running a micro, small, or medium enterprise? Secure your business's growth with MSME loans. These loans offer a financial lifeline for your business whether you're a small business or expanding an existing business.

MSME Loans are Business Loans offered by various banks & financial institutions. Government of India has also launched various loan scheme to provide loans to SMEs and MSMEs. Explore the competitive interest rates, hassle-free application processes, and financial support for your new ventures.

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MSME Loan Interest Rate, Fee & Charges

The interest rates and charges of MSME loans are the key aspects that shape the financial picture for small and medium-sized businesses. Here are the highlights of MSME loans, helping you make smarter financial decisions for your business.

Interest Rates Start from 11.99%* p.a.
Loan Amount Rs. 50,000/- to Rs.50,00,000/-
Loan Processing Fees Up to 3.54% of the loan amount
Loan Tenure Up to 5 years
Prepayment Charges Up to 4% on the balance
*Note: The interest rates are dynamic and subject to change based on your credit history and creditworthiness.

MSME Loan Eligibility

To avail of an MSME loan, businesses need to meet certain criteria. The eligibility criteria is determined based on business vintage, turnover, and creditworthiness.

Age: Min 21 - Max 65 (at the time of loan maturity)

Business Vintage: Min 2 years or above

Annual Turnover: As per banks

Credit Score: 750 or above

Nationality: Indian

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Documents Required for MSME Loan

Smooth processing of MSME loans requires specific documentation. Ensuring you have the paperwork in order can expedite the loan approval process.

Business registration documents

KYC documents: Passport, driver's licence, Aadhaar card, Voter ID

Financial statements, including balance sheets and income statements

Bank statements

Business plan and project report

Features of MSME Loans in India

MSME loans, come with competitive interest rates, making them affordable for businesses of all sizes. Here are the features of MSME Loans in India:

Instant Loan Approval

Get your loan approved within minutes

Zero Collateral

Get your loan amount without pledging your assets.

Competitive Interest Rates

Interest rates starting at just 11.99% p.a.

Multi-purpose Loan

Utilize the loan amount for a varirety of purposes

Flexible Repayment

Choose your repayment tenure up to 5 years.

Zero Chrages

Zero hidden charges and penalities.

MSME Loan Offered By Various Bank and NBFC

Explore a diverse array of MSME loan options provided by leading banks and Non-Banking Financial Companies (NBFCs). These financial institutions offer tailored solutions to support the unique needs of Micro, Small, and Medium Enterprises, fostering business growth and development.

Top Banks Offering MSME Loans

Here is a list of top banks offering MSME loans in India:

Top Banks Interest Rate (p.a.)
State Bank of India(SBI) 8.90% onwards
HDFC Bank 10.00% onwards
ICICI Bank 12.50% onwards
Axis Bank Up to 36%

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Note: The above-mentioned rates are subject to change with the finance market and differ marginally with respect to the individual banks

Top NBFCs Offering MSME Loans

Here is a list of top NBFCs offering MSME loans in India:

Top NBFCs Interest Rate (p.a.)
Bajaj Finserv 9.75% onwards
IIFL Finance 11.25% onwards
Lendingkart Finance 12% onwards
Tata Capital Finance 19% onwards
Money View 15.96% onwards

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Note: The above-mentioned rates are subject to change with the finance market and differ marginally with respect to the individual sectors.

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Calculating MSME Loan EMI

The Business Loan EMI calculator is a user-friendly tool designed for entrepreneurs to estimate their monthly repayments based on the desired loan amount. This handy tool facilitates the calculation of the loan amount, interest rate, and tenure, offering precise EMI calculations.

Utilizing a MSME loan calculator simplifies the entire process, providing a straightforward method for borrowers. It not only offers clarity on the repayment schedule but also aids in assessing affordability, budgeting, and comprehensive financial planning for the business.

₹
%
Monthly EMI ₹86
Principal Amount ₹1,000
Total Interest ₹32
Total Amount ₹1,032.00

Year Month Principal (A) Interest (B) EMI (A+B) Balance Loan Paid to Date (%)

Different Types of MSME Loan

MSME loans are diverse, catering to different business needs. Understanding the various types can help businesses choose the most suitable financing option.

Term Loans:

Utilized for business expansion, asset acquisition, or working capital needs.

Involves a lump sum amount repayable over a specified term.

Working Capital Loans:

Funds day-to-day operations and bridges cash flow gaps.

Addresses expenses such as inventory, payroll, and supplier payments.

Machinery and Equipment Loans:

Finances the purchase or lease of essential business machinery, equipment, or vehicles.

Vital for enhancing operational efficiency.

Small Business Administration (SBA) Loans:

Government-backed loans supporting small businesses.

Offers financial assistance with favorable terms.

Business Line of Credit:

Provides a revolving credit facility.

Allows businesses to withdraw funds as needed for flexible financial management.

Invoice Financing:

Enables businesses to access funds promptly by selling unpaid invoices.

Also known as accounts receivable financing.

Trade Finance:

Facilitates international trade transactions.

Provides financing for import or export activities, including letters of credit, export financing, and supply chain financing.

Startup Business Loans:

Tailored to support new businesses in their early stages.

Provides necessary capital for establishment and initial growth.

MSME Loan Schemes By Government of India

The government has introduced several schemes to support MSMEs. Each scheme aims to address specific challenges and promote the growth of these enterprises.

Pradhan Mantri Mudra Yojana (PMMY): government scheme providing financial assistance to small and micro enterprises. Offers loans up to Rs. 10 lakh to promote entrepreneurship and job creation.

Credit Guarantee Fund Scheme (CGTMSE): government initiative providing credit guarantees to encourage collateral-free loans for SMEs. Facilitates access to credit and promotes entrepreneurship.

Stand-Up India Scheme: supports women and SC/ST entrepreneurs with bank loans ranging from ₹10 lakh to ₹1 crore. Aims to set up greenfield enterprises across various sectors.

National Small Industries Corporation (NSIC): supports MSME growth through marketing, technology assistance, credit facilitation, and training programs.

Startup India Scheme: fosters entrepreneurship by providing funding, tax benefits, and simplified regulations for startups.

Make in India Soft Loan Fund (MUDRA): provides financial assistance to small businesses, promoting entrepreneurship and sectoral growth.

Export Credit Guarantee Corporation (ECGC): offers export credit insurance services to mitigate risks associated with international trade.

SIDBI Make in India Loan for Enterprises (SMILE): supports SMEs under the Make in India initiative with tailored financial products. Aims to foster entrepreneurship, innovation, and job creation.

Stand-Up India for Women Entrepreneurs: government scheme empowering women entrepreneurs with financial support and resources.

National Bank for Agriculture and Rural Development (NABARD): focuses on agricultural and rural development, providing credit, loans, and support to farmers and rural enterprises.

Steps to Apply For MSME Loan With Buddy Loan

Follow these steps to apply for an MSME Loan on Buddy Loan:

Step 1: - Visit buddyloan.com or Download & install the Buddy Loan app (Android or iOS).

Step 2: Open the Business Loan Application Page. Enter your mobile number and OTP.

Step 3: Specify the desired loan amount and email. Next, choose the Business Loan option.

Step 4: Choose if you have a Business Proof (Yes/ No)

  • If ‘Yes’ (If you have a business proof), enter your business and personal details.
    • or
  • If ‘No’ (If you do not have a business proof), choose the profession type and enter your personal details.

Step 5: Provide income details and Click the ‘Submit’ button.

Ready to take next step ?

Frequently Asked Questions

An MSME loan is designed to support micro, small, and medium enterprises in their financial growth.

Businesses falling under the MSME category with a good credit history are eligible.

Micro, small, and medium enterprises/ businesses are eligible based on their investment and turnover.

Categories include micro, small, and medium, each with defined investment and turnover limits.

Apply online through our user-friendly portal or visit your nearest branch.

Loan amounts vary by bank, but generally range from ₹50,000 to ₹50 Lakhs.

Interest rates depend on the lender, with competitive rates starting from 11.99%*p.a.

Repayment tenures are flexible, ranging from 1 to 5 years.

Collateral requirements may vary; some loans offer collateral-free options.

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