Micro, Small, and Medium Enterprises (MSME) are divided into two categories:

  • Manufacturing businesses are those that engage in the manufacture or production of goods for any industry, or those that employ plant and machinery to add value to a finished product with a particular name, character, or use.
  • Service businesses are those that provide or render services.

MSME Loans refer to the loans sanctioned to the Micro, small and medium enterprises for their functioning. Read on to know everything about MSMEs as well as the MSME loans.

What Is MSME?

MSME refers to Micro, Small and Medium Enterprises based on the classification made by the government. 

Micro: Investment of not more than Rs. 1 crore in plant and machinery or equipment, and not more than Rs. 5 crores in annual turnover.

Small: Investment of not more than Rs.10 crore in plant and machinery or equipment, and not more than Rs.50 crore in annual turnover.


Medium: Investment of not more than Rs.50 crore in plant and machinery or equipment, and not more than Rs.250 crore in annual turnover.

MSME Loan Benefits And Features 

Micro, small, and medium businesses are referred to as MSME. Such businesses have a wide range of requirements, including the procurement of inventory, the purchase of new equipment,

the payment of salaries to employees, and the maintenance of cash flow. MSME loans are a cost-effective way to meet all of these needs.

This credit facility, which is a collateral-free loan for MSMEs, can be easily accessed by small enterprises at a low rate of interest. This finance option can help small business owners, women entrepreneurs, and start-up owners cover their anticipated and unplanned needs by having simple eligibility requirements and requiring minimal paperwork.

What Can This Loan Used For?

These loans can be used for a variety of purposes, including:

  • Meet your working capital needs.
  • Pay for a variety of expenses.
  • Invest in the infrastructure of your company.
  • Install new machinery and equipment.

Features

The features of MSME loans offered by Loan Tap are:

  • Repayment Options That Are Flexible: You have to pay interest only when you withdraw. Repayment and withdrawal options are unrestricted.
  • Processes That Are Transparent: There are no hidden fees or charges for paying in advance. We use processes that require minimal documentation and are secure to work with.
  • Approval And Disbursement Are Instant: Loan approval is a simple online process. Through your online LoanTap account, you can withdraw your tranches quickly.
  • The Bare Minimum Paperwork: For all of our personal lending products, we complete the bare minimum paperwork. This is less tiring for both the clients as well as the staff. A majority of the work is done online. 

Eligibility Criteria

  • Individuals must be Indian citizens or residents
  • Individuals must have submitted their latest ITR.
  • Citizens of India who are at least 22 years of age.
  • Individuals must have net monthly income of Rs 30,000.

Documents Required For The Loan

We’ll need the following papers to process your loan application.

  • Proof of address
  • Bank statement (over the previous six months)
  • PAN
  • Registration for the Goods and Services Tax (GST) and a Shop Act licence
  • ITRs filed for the previous two years.

However, if further documentation is required, you will be asked to provide them.

LoanTap offers MSME loans from Rs 50,000- Rs 2,50,000 for tenures ranging from six months to thirty six months at affordable rates. 

Why should you opt for an MSME loan instead of using a credit card?

  • An MSME loan works out cheaper than a  credit card. 
  • A credit card charges 2.5-3% per month which works out to 24-36% annually while an MSME loan will be much cheaper.
  • An MSME loan can be repaid on flexible repayment terms which will fit the monthly budget comfortably.
  • You will have a structured repayment plan.
  • You will need to pay interest only on the amount withdrawn.
  • Once you complete six months, you can repay the balance without any prepayment penalty.

Using an MSME loan can give wings to your dreams. You can use the amount to meet your immediate financing needs. It is far more convenient than depending on relatives or the unorganised sector. It is a formal loan with clearly written terms of agreement. It will help you to grow your business in the initial days and you can take your dreams forward.

LoanTap understands the needs of small entrepreneurs and the difficulties they face in getting a small loan sanctioned. The process is lengthy and cumbersome and involves too much paperwork. Moreover, there is a long waiting process before the loan is finally disbursed. LoanTap makes efficient use of technology to ensure that MSME loans are processed very quickly and without any burden on the borrower. The user interface is extremely friendly and can be filled quite comfortably by the borrower. The documents that are required to be uploaded are standard documents that are readily available. The quicker you complete the process, the less time it takes for LoanTap to scrutinize the documents and approve the loan. If the documents are in order, the loan is approved immediately. Else, further documents are requested from the applicant to complete the process. It does not take more than 24-36 hours from start to finish for the loan to be disbursed to the mandated account.

LoanTap is focused on reaching out to the underserved segments of the population with the help of technology so that it can provide finance to deserving borrowers. This will help in fulfilling the dreams of millions who fall short of achieving their aspirations because they do not have access to funds at the right time.
If you are an MSME, you have reached the right place. For all your MSME loan needs, please visit our website and we will be glad to assist you. With LoanTap, your dream is only a few clicks away.

MSME loan
Top line
Satyam Kumar is banking industry veteran with enriched experience of more than 20 years. Apart from founding LoanTap and FinTech Association of Consumer Empowerment, he is an avid traveler and holds keen interest in Blogging. He has amassed profound knowledge in FinTech trends, banking, consumer trends, food and mythology which he loves sharing with others.
Satyam kumarSatyam KumarCEO & Co-Founder, LoanTap asset 8 asset 9
Bottom line