MSME Loan: How You Can Become Eligible to Get Funds for Your Business

MSME loan eligibility is important to know if you have plans to avail of this loan. It will help you to understand whether you are eligible for this loan or not.

MSME Loan: How You Can Become Eligible to Get Funds for Your Business

It is essential to understand the definition of an MSME loan before understanding its eligibility. MSME is Micro, Small, and Medium Enterprise, and the Government of India brought this loan to light in 2006. So, if you need to avail of the MSME Loan, you are at the right place. 

We will discuss all the essential things about MSME loan eligibility. So, provide all the information regarding your business to the MSME databank. Here are all the essential things that you should grasp regarding eligibility for an MSME loan.

Who are eligible to get MSME loan?

MSME loan eligibility is important to know if you have plans to avail of this loan. It will help you to understand whether you are eligible for this loan or not. So, here are the eligibility criteria that you should bear in mind. 

  • Numerous entities can also get the MSME loan. For example, if you have private limited, partnerships, and limited liability partnerships, availing of this loan will be easier for you.
  • Self-employed non-professionals are open to this loan as well. Some examples of self-employed non-professionals are retailers, traders, proprietors, manufacturers, and service providers. 
  • If you are a self-employed professional, you can avail of this loan without any problems. For instance, if you are a doctor, architect, or chartered accountant practicing their profession, you are eligible for this loan.
  • Another important MSME loan eligibility criterion is that you must be an Indian resident, and your age should be minimum 24 years at the time of applying and maximum 70 years at the time of maturity of the loan tenor.
  • You have to make sure that your business is running for at least three years. 

What are the MSME loan documents that you have to show?

If you are compatible with the eligibility criteria mentioned above, you have to show some documents. Once you can present those documents, you will get the loan within a short time. So, here is the list of copies that you have to show:

  • KYC Documents- PAN card, Aadhar card, Driving license, or voter ID card.
  • Financial Documents- GST Returns, Copy of ITR, Profit and loss statement, and Bank account statement.
  • Address proof- Rent agreement, electricity bill, passport, and numerous other things.
  • Business ownership proof- You have to show all the registration documents of your business.

Eligibility criteria for registering in MSME databank

To get the registration in the data bank, there are two main criteria that you have to follow. To be precise, you must have two things that will make you eligible for the MSME databank registration such as:

  • You must have an Aadhar number. It is one of the mandatory criteria.
  • Next, you must have a PAN. You have to submit your PAN number while filling the form.

Some tips for using MSME loan

Once you get the loan, you have to use the money wisely. Here, we will introduce some ways to use your MSME loan in the right way. It will help you to extract the benefits of an MSME loan.

  • You can use this amount to manage your inventory. The best thing that you can do is to strengthen your inventory supply chain.
  • There is a possibility that you have some business debts. You can use this loan to take care of your business debts.
  • It will help expand your operations. You don’t have to dry your capital fund to enhance your operations.

So, here is a detailed guide on MSME loan eligibility. Take a look at them and make the right decision. We would also suggest you register for the MSME databank. It will be helpful for your business.