What is an MSME Loan?
MSME Loans are types of loans for Micro, Small, and Medium Enterprises which can be used for various purposes like new inventory, purchasing new stock, working capital loans, and even expanding your business.
MSME Loans for new businesses
MSME loans for new businesses are available for businesses with a record of at least 3 years.
They should have filed income tax returns for at least 1 year.
MSME Loans From Flexiloans With The Best Repayment Option
MSMEs are micro, small, and medium enterprises that either manufacture or process goods or are involved in the services sector. They play a major role in India’s economy. They encourage self-employment and employment opportunities (skilled, semi-skilled, and unskilled people) and contribute significantly to India’s GDP (Gross Domestic Product) by about 27 percent. The Indian government plans to increase the share of the MSMEs to 50 percent in the future.
The government started many initiatives for this sector, as follows:
- MSME Samadhaan.
- Udyog Aadhaar.
- ZED Scheme.
- Made in India.
- Stand Up India.
SME Business Loans
Following are the types of MSME business loans provided in India
- Term Loan
- Loan against POS
- Vendor Financing
- Line of Credit
MSME Online Loan Application
Online Business loan applications can be made by
- Filling the form online
- Uploading supporting documents
- Waiting for the approval of the lenders.
Collateral Free Business Loan
It is a loan given without any security, favorable for small businesses without many assets, unable to provide collateral.
Business Loan Providers in India
Business loan providers in India are Banks, Non-Banking Financial Institutions, microfinance companies, and financial institutions.
Finance sources for MSMEs
The primary sources of funds for MSMEs are bank loans, loans from non-banking financial institutions(NBFCs), venture capital, and microfinance institutions.
Flexiloans was started with a vision to address the numerous problems small businesses face in procuring fast, flexible and adequate funds for expanding businesses, and it provides loans online.
The company believes that its technology-powered online marketplace is the best model to meet the financial needs of MSMEs handicapped by the lack of credit history and thus do not get funding from traditional banks. The company provides security-free loans all across the industry.
Some features of Flexiloans MSME loans are the following.
- Loans start from Rs. 50,000/- up to a maximum of Rs. 10 crores, fulfilling all the business requirements.
- These loans are processed speedily in about three working days, enabling the borrower to access the loan fast.
- Loans can be used for the following purposes
- Buying Land to start a new business
- Developing a Factory
- Buying vehicles or production equipment like machinery
- Funding for advertising and marketing.
- Funds for the renovation of the company.
- Repayment is flexible, with a maximum loan tenure of 4 years. The repayment terms can be adjusted as per one’s convenience.
- All loan quotes are transparent and disclosed upfront, with no hidden costs. All documentation is digitized, from submission and acceptance to the loan amount release.
- There is an EMI calculator available that helps calculate EMI easily. It is fast, reliable, and straightforward to use. To get the EMI, a person has to enter the loan amount, the loan term, and the interest rate.
Flexiloans — How to apply for MSME Loans Online
A borrower has to visit the website of FlexiLoans and complete the application form by entering all the required details. The details will be checked by FlexiLoans to process the loan.
- Uploading of supporting documents
All the supporting documents required for processing the loan have to be uploaded on the website by the borrower. Documentation includes current account bank statements, business documents, and KYC papers.
- Borrower’s creditworthiness analysis
FlexiLoans then scrutinizes the financial results of the borrower, like the profit and loss statement and balance sheet. Next, the amount permissible to borrow is determined along with the interest rate. The company’s loan officers will explain to the borrower and aid them in making the correct decision on the amount to be borrowed.
After the loan verification and approval process, details are shared with the borrower. The loan amount is transferred to the borrower’s account approximately two days after the intimated loan approval.
Documents needed for MSME loans
- Individual KYC Documentation.
- PAN CARD.
- One of the following is accepted as residential address proof
- Agreement of the rented apartment.
- Driver’s License.
- Voter’s Identity Card.
- Ration Card.
- Aadhaar Card
- Bank statements of the previous six months.
- Business KYC.
- Registration Certificate of GST.
- Certificates of Shops and Establishments.
- Financial documentation supporting (mandatory for loans over Rs. 20 lakhs)
- The audited accounts of the previous two years.
- Last two years’ income tax returns.
- GST returns of the previous six months.
Eligibility — MSME loans application
- The minimum age for applying for a loan is 21 years, and the maximum is 65 years.
- Individuals, sole proprietors, and private and public limited companies can apply for MSME loans.
Benefits of MSME loans
- Easy to get and quick disbursement
- Lower interest rates
- Loans are for the short term for up to 4 years.
- The owners retain total control of the company as they do not have to give an equity stake to venture capitalists who would have funded the company in exchange for a share in its ownership.
MSME Loan Interest rate and other charges
Frequently asked questions about MSME FlexiLoans
- When can an MSME loan be taken?
In the following cases, consider taking an MSME loan.
- Expansion of an existing business.
- Funding of the regular and seasonal working capital needs of the organization.
- Creditors have to be paid on time – funding short-term cash flow gaps like delays in the collection from debtors.
- Why should one borrow from Flexiloans?
- Quick disbursement.
- Flexible Terms
- Best rates
- Who can apply for a Flexi loan?
- Business in existence for at least a year. Companies in the service industry should have a track record of three years or more.
- The total turnover must be a minimum of Rs 2 lakhs.
- What are the charges the borrower has to pay besides interest?
- Processing fees for loan facilitation and documentation charges.
- Penal charges for late or irregular payment.
- What are the documents needed for MSME Registration?
For registration under MSME, a few supporting documents like PAN number, Aadhaar number, personal details, email address, and bank information are required.
Other details include the number of employees, essential business activity, and amount invested in plant and machinery.
MSMEs are growing businesses, and they need capital at cheap rates to expand their business. FlexiLoans provides loans to MSMEs at attractive rates with speedy approvals. Borrowers of the MSME category should take advantage of FlexiLoans loan offers.