MSME Loans also known as Micro, Small, and Medium Enterprise Loans are types of loans which you can avail if you own a business or is an entrepreneur. This type of loan provides you working capital which you can use for various purposes such as purchasing new inventory, buying new equipment, paying your staff their salary, or aid yourself in expanding your business. There are multiple lenders in India who offer MSME loans to their customers. The interest charged also differs from banks to banks.
Interest Rate |
7.65% p.a. onwards |
Loan Amount |
Rs.50,000 onwards |
Loan Tenure |
Up to 15 years |
Processing Fee |
Subject to the lender |
The definition of MSME was altered, and was announced by the Government of India on 13th May 2020. Given below is the new definition of MSME:
Classification | Micro | Small | Medium |
---|---|---|---|
Manufacturing and Services Enterprises | Investment does not exceed Rs.1 crore and Turnover does not exceed Rs.5 crore | Investment does not exceed Rs.10 crore and Turnover does not exceed Rs.50 crore | Investment does not exceed Rs.20 crore and Turnover does not exceed Rs.100 crore |
Classification | Manufacturing and Services Enterprises |
---|---|
Micro | Investment does not exceed Rs.1 crore and Turnover does not exceed Rs.5 crore |
Small | Investment does not exceed Rs.10 crore and Turnover does not exceed Rs.50 crore |
Medium | Investment does not exceed Rs.20 crore and Turnover does not exceed Rs.100 crore |
Micro, Small, and Medium Enterprises can avail MSME loans for the expansion of businesses or for setting up new enterprises. The interest rates on MSME loans start at 7.65% p.a. The loan amount sanctioned ranges from as low as Rs.50,000 and can go up to a few crores. On the basis of the sanctioned loan amount, the loan repayment tenure can go up to 15 years.