Learn the Application Process for MSME Loans

Learn the Application Process for MSME Loans

For budding entrepreneurs, MSME loans help in turning their dreams into reality. However, financing is the biggest hurdle when it comes to building a business. Suppose you have set up the business, but to keep it running, restocking, paying employees, and vendors, maintaining the infrastructure and such, you might need help, and what is better than the MSME loans?

If you are also planning to apply for the MSME loan and want to learn more about what is MSME startup loan, eligibility, and how to apply for MSME loan online, you have come to the right place. Read ahead to find out more!

What is MSME Loan?

MSME loan stands for Micro, Small and Medium Enterprise Loan. If you are a business owner and own any business that falls into the said range, then you are eligible and can apply for the loan. With the provided capital, you can invest in building business infrastructure, restocking inventory, and expanding your business to obtain more profit.

MSME loan is designed to boost medium, small, and micro businesses nationwide. Various entrepreneurs have launched startups once this loan came into existence. Various banks, NBFCs and other lending institutions offer MSME loans. However, before you apply for an MSME startup loan, compare, and then decide whether it will help your business or not, as many lenders have different sets of rules to abide by. Let us learn about the MSME startup loan eligibility to check whether your business qualifies.

MSME Loan Eligibility Criteria

To be eligible for the MSME startup loan, there are a few set criteria that you will have to meet. Please note that these criteria may vary depending on the loan lender. Some of the common requirements include the following:

  • Business should fall either under the service sector or manufacturing sector
  • The business owner must be of Indian nationality
  • Business vintage can vary from 1 year to 3 years depending upon the lender
  • CIBIL Score of 685 or higher
  • Business turnover must be INR 12 Lakhs and above, but this also varies from lender to lender

What are the Documents Required for MSME Loan?

Here are the general documents that, as a business owner, you will have to submit while you apply for MSME loan:

  1. Correctly filled application form (can be offline or online)
  2. KYC documents, including Aadhaar card, driving license, PAN, utility bills, passport, and voter ID card
  3. Vintage proof and business address proof
  4. Bank details and the last six month’s bank account statement to show the financial stability
  5. Establishment certificate of business
  6. Caste category certificate, if required from the lender

Additional documents might be required depending on the bank or the NBFCs. Connect with the selected provider and ask about the documents to apply for MSME loan online or offline successfully.

Benefits of MSME Startup Loan?

To encourage entrepreneurs to open their own business, the government of India offers multiple benefits through the MSME startup loan. Here are the key benefits:

  1. As a business owner, you can apply for MSME loan with zero collateral. Minor modifications may occur depending upon the loan provider.
  2. Since many providers have started giving instant loans, you can also apply for MSME loan online and get funds easily compared to the offline process, which may take several days.
  3. Businesses can also get a rebate on the patent registration once they become part of MSME scheme. The business patent subsidy offered by the government is also an initiative to interest citizens to start their businesses without worrying about capital.
  4. Many MSME startup loan providers provide less to no interest rates on overdrafts to protect businesses if the market goes down. However, this may vary from provider to provider.

Procedure to Apply for MSME Loan

Here are the basic steps to apply for MSME loan:

Step 1: Select a suitable provider and locate their app to apply for MSME loan online.

Step 2: Fill in the required information, which includes the name, identity proof, birth date and such of the applicant

Step 3: Fill in the required information about the business, including earnings, turnovers, and such.

Step 4: Submit business PAN details as asked

Step 5: Once you submit the said information, you will be redirected to the page where you can check how much MSME startup loan you can get on your business. Check monthly EMI and interest rates applicable and other essential info.

Step 6: Click on the offerings that best suits you

Step 7: Submit the duly filled form and complete the verification process, if any.

Once you are done with the application and have received the confirmation that you apply for MSME loan, you can expect the money to be deposited in your linked account within a few days.


The Indian government has launched the MSME loan initiative to encourage budding businessmen to start businesses of any scale. Business owners are now actively looking for the best providers to apply for MSME loan online and start or expand their businesses. One such MSME startup loan provider that business owners trust is HDFC Bank. With the help of HDFC’s SmartHub Vyapar App, you can apply for pre-approved loans and get instant approval. You can easily apply for MSME loan online as the process is completely paperless. You can opt for a loan that matches your business requirements. HDFC Bank offers collateral-free loans up to INR 75 Lakhs at a competitive interest rate. Sounds exciting, right? Download the application today, apply for the loan and make your dream of starting your own business a reality!