How to apply for an MSME loan online? Required documents and new policy explained
According to the new guidance provided by the government, the investment limit has been revised upwards and an additional turnover criterion introduced for loans to MSMEs. Previously, the 2006 law on micro, small and medium enterprises (MSME Act) defined a micro-unit with an investment of up to Rs 25 lakh, a small business with an investment of between Rs 25 lakh and Rs 5 crore and an average with an investment between Rs 25 lakh and Rs 5 crore. Rs 5 crore and Rs 10 crore. There was a distinction between manufacturing and services, so in the case of services, the investment limit for the microphone was up to Rs 10 lakh, for small ones, the investment limit was Rs 10 lakh to Rs 2 crore and the average limit was Rs 2 crore to Rs 5 crore.
Now, the recently introduced revised definition of MSMEs has removed the distinction between industry and services. This means that a micro-business is a business with an investment of up to Rs 1 crore and a turnover of less than Rs 5 crore, the small business has an investment of up to Rs 10 crore and a turnover up to Rs 50 crore and the medium-sized business will be one with an investment of up to Rs 20 crore and turnover below Rs 100 crore. These new changes not only help a startup or an already operating business grow, but also help them achieve more benefits with greater transparency in classification. This will also allow the government to verify a company’s turnover using GST data as the investment in machinery. If you are looking to get an MSME loan, here is a step by step guide on how to apply for an MSME loan online.
Documents required for the MSME loan
- Completed application form
- Proof of identity: Passport, driver’s license, PAN card, voter ID card
- Proof of residency: passport, rental agreement, business license, telephone and electricity bills, ration card and sales tax certificate
- Proof of age: passport, voter ID card, PAN photo card
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- Bank statement for the last 12 months
- Proof of business registration
- Copy of owner (s) PAN card
- Copy of company deed
- Copy of the company’s PAN card
- P&L and copy of the balance sheet for the last 2 years
- Sales tax documents
- Municipal tax document
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How to apply for an MSME loan online?
- Go to https://udyogaadhaar.gov.in/UA/UAM_Registration.aspx, which is the national portal for the registration of micro, small and medium enterprises.
- Scroll down and fill in the details such as Aadhaar number and contractor name.
- Once this information has been entered, click on “Validate & Generate OTP”
You will receive an OTP on your mobile number which is linked to your Aadhaar card. Fill out the OTP on the window and click “Submit” and a request form will appear.
Fill in all the required details.
Click “Submit” once you have completed all the required details in the application form.
After clicking the “Submit” button, the page will ask you if you entered all the data correctly. Click “OK” to confirm.
Now you will again receive an OTP on your mobile number which is linked to your Aadhaar card. Fill out the OTP and the code is given below on the window and click “Final Submit” to submit the request form.
You will see the registration number above, just write it down for further reference.
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Some banks that offer loans to MSMEs
- National Bank of India
- HDFC Bank
- Allahabad Bank
- Central Bank of India
- ICICI Bank
- Bajaj Finserv
- Oriental Bank of Commerce
- Union Bank of India
- Indian Bank
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