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What is MSME Loan?

Every Micro, Small and medium businesses success is completely dependent on three pillars :

  1. Business Idea
  2. Hard work
  3. Capital Investment

While the first two are completely under the control of the Business owner, last one which is Funding/Capital investment is a difficult task for a business. As per the recent announcement made by the Finance Ministry at "support and outreach initiative for MSME sector" on 2nd November 2018, Now businesses (MSME’s) can avail a collateral free loan in just 59 Minutes. This move will help MSME segment to grow, expand and sustain both in national and international markets. Getting credit is a big task for any MSME in India with this new path every MSME will get access to a loan equally with minimum hassle.

LegalDocs supports and respects this ministry’s initiative, and will help SMEs to get maximum benefits of this scheme.

Documents Required to Get MSME Loan

MSME Registration:

Micro small medium enterprises registration also known as Udyog Aadhaar issued by Udyog Aadhaar Ministry is the first and foremost requirement to get this Loan. MSME can be issued in one day your Aadhaar Should be Linked with your Phone as its OTP based Process.

Apply Now for MSME Registration

GST Registration:

As per GST mandate businesses having a turnover of more than 20 lakhs per annum needs to have GST registration and it's up to an individual to get GST Number if turnover is less than 20 lakhs per Annum. Now if you want to Avail Loan GST Registration is must as GST number is Required to complete the Application Process.

Apply Now for GST Registration

Income Tax Return Statement:

Once you file your business annual tax return ITR statement is generated. You need to submit last three year’s return along with the application.

Business Bank Account:

Also Known as current account is necessary for every business, as the number of transactions are different as compared to savings or personal account. To get the Current account individual’s can use GST Certificate, MSME Registration, Shop and Establishment License. In case of Partnership and Companies one can use Partnership Deed and Incorporation Certificate Respectively.

Apply Now for Shop Act

Proprietor/ Director Documents:

Also Known as current account is necessary for every business, as the number of transactions are different as compared to savings or personal account. To get the Current account individual’s can use GST Certificate, MSME Registration, Shop and Establishment License. In case of Partnership and Companies one can use Partnership Deed and Incorporation Certificate Respectively.

Features of PSB Loan (SIDBI)

  • 2% Discount of Interest Rates :You’ll get 2% Discount on the interest rate of the loan. The current Rate of loan is between 14-19% depending on the Loan Amount which is sanctioned.
  • Completely Contactless : In case of traditional Loan most of the SMEs are dependent on the financial institution’s. Now you don't need to go anywhere just need to gather the documents and submit them Online and your process will be taken care
  • Minimum Time and Documents: Application will be approved in 59 minutes and Loan will be disbursed in the beneficiary account in 8 working days. The requirement of documents is also minimum which is GST Registration, MSME Registration, Income Tax Return Statement, and Bank Statement. Best thing is all of these can be downloaded online.
  • Integration with Multiple Platforms: The Loan process is well integrated with all the stakeholders like GST, Income tax(CBDT), CGTMSE to check the eligibility of borrowers which means you don't need to run from office to office for NOC’s and Approvals.

MSME Loan FAQs

.What is the minimum and maximum loan amount one can borrow through the portal?

An MSME can avail business loan from Rs 1 Lakh to Rs 1 Crore under PSBMSE scheme

Is it required to provide fees for registration?

There is no Registration Fees, However you have to pay convenience fees for Principal Approval.

What is the Eligibility Criteria for PSB Loan in 59 minutes?

Existing businesses can apply for this loan, Borrower should be GST, IT compliant and must have Net Banking Facility.

What data/ documents are Required to get the loan in 59 minutes

A.GST Details: GST Identification Number (GSTIN), GST UserName and GST Password
B.Income Tax Details: Either Upload latest 3 years ITR in XML format or Provide PAN, Date of Birth/ Incorporation, Password of Income Tax Account on www.incometaxindiaefiling.gov.in
C.Net Banking Details: Either upload Bank Statements for last 6 months in PDF format or Provide Login ID and Password (Borrower can upload Bank Statements for Maximum 3 Bank Accounts on the Portal. Please upload bank statements having Major Business Activities)
D. Details of Directors/Partners/Proprietor
E. Details related to Loan Required and past loan taken.

What if GST Return/Income Tax Return/Banking Details are not filled?

GST Return and ITR Returns are must, you are not eligible to get loan now, however start following GST compliance and Income tax returns you can start application after an year.

In case of not having all the required details for the application process. What can be done?

All details are very important, Please make sure you submit all of them otherwise your final application will not be submitted.

What is the cost of In-Principle approval?

Registration is Free, however the in principle approval is chargeable which is Rs 1000 plus Taxes.

Are there any charges to be paid towards availing the psb Loan ?

Yes, for Principal approval you need to pay Rs 1000 plus applicable taxes, however registration is free.

Is it possible to receive loan if we pay amount required and receive an In-Principle approval?

The In-Principle approval is given based on the data provided by the borrower. After offering In-Principle Approval, the preferred lender (as selected by borrower) will conduct a thorough due diligence and decide on whether to Sanction/Disburse the Proposal. The final decision will be at the lender’s discretion.

Is the In-Principle Approval a surety of Loan Sanction?

There is no surety that loan will be issued or not. However after in principle approval the chances are high to get the loan

How to check the status of the application?

Status will be updated to you through mail and SMS

How long it takes to final decisions and receive funds ?

For In Principal approval It takes 15 minutes And for disbursement of fund it takes around 7 to 8 working days.

What is Collateral?

The Guarantee which you keep at bank while availing loan. It is somewhat similar to security deposit.

Is Collateral to be provided to avail loan through the portal?

No need to submit an collateral or guarantee to get loan under CGTMSE scheme.

What is I do not have GST Registration ?

GST Registration is Very Much Required to get the Loan. Please GET Registered under GST to avail the loan.

Is it necessary to upload Income Tax Returns for past 3 years?

The borrower can proceed by uploading even a single year’s Income Tax Return, however it will be beneficial if Income Tax Returns for all the years are provided.

How many years of Income tax Returns is Required?

To get maximum Loan benefits it is advised to submit three year’s return, otherwise one year return is also Enough.

If we have not yet filed the return for the latest financial year? Will the Income Tax Return for past financial year be
accepted?

If a borrower has not yet filed the Income Tax return for last financial year, he/she can upload the Income tax Return of past financial year(s).

If Salary Return is filed in past financial years and have only one year of Business Income Return. Is it possible to proceed for the application?

Yes, the borrower can proceed with uploading Income Tax Return if the return in latest financial year is a Business Income Return, irrespective of the returns filed in the past previous years.

In case we are not in possession of the XML files of the Returns filed. Is there any alternative?

The borrower can opt to provide Login Credentials, Provide Date of Incorporationand PAN card Details

How to download XML files of Income Tax Return filed (if I do not want to provide the Login Credentials)?

Click on the Link How to get XML file of your ITR And follow the instructions provided to download the XML files from the www.incometaxindiaefiling.gov.in and upload the same on the platform.

While filing Income Tax Returns under Presumptive Taxation or I file ITR form 4/4S. Can we proceed with the application?

Yes. There are products created by lenders for borrowers who file their Income Tax Returns under Presumptive Taxation or file ITR form 4/4S.

What is the Bank Statement Duration which is Required?

Last 6 months statement of the transaction is required.

What is the Format of Bank Statement one should upload?

Bank E statement Generated online in PDF Format.

What is the need to provide all these details?

The details of the Directors/Partners/Proprietors are required for assessment of borrower’s proposal against the parameters of lenders. These details will help us better match you with a suitable lender. Furthermore, the details are required to check the Bureau Score of all the Directors/Partners/Proprietor, to check for credit history of the organization as well as its managers.

When all the required details are filled, there are no values shown to select from in Village/District/Sub-District tabs?

It seems that your Pin Code is not listed in the system, kindly provide a Pin Code of the nearest area and select the Village/District/Sub-District from the drop downs.

In case we do not have the exact figure of my Net-worth, will an estimate be acceptable?

Yes. Borrower can provide an approximate figure for net-worth, the exact figure will be verified on due diligence

How to proceed with the details of only one Director/Partner?

No. In case of Partnership Firms and Companies, details of at least 2 Directors/Partners are mandatorily required

MSME Registration Number/ Udhyog Aadhar Memorandum Number is not there. How to proceed with my application?

The fields for MSME Registration Number and Udhyog Aadhar Memorandum Number are not mandatory and borrower(s) not having either number can leave the fields blank and move on to complete the application.

What is Promoter Contribution?

The promoter contribution is the % of loan amount that the lender requires the Promoters to invest/ contribute out of their personal funds

What is Incremental Turnover and Incremental Margin?

The Incremental Turnover is the increase in turnover that the borrower anticipates if he acquires the Machinery/Equipment. Similarly, Incremental Margin is the increase in margin that the borrower anticipates if he acquires the Machinery/Equipment.

What is Commercial Operation Date?

Commercial Operation Date is the date on which the borrower anticipates the Machinery/Equipment will be brought into commercial use. Borrower can provide an estimated date.

Is there is no collateral security to offer, will this have any adverse effect on the proposal?

The borrowers can proceed even if there is no collateral security to offer.

Does the Payment of Convenience Fees works as a guarantee that we will receive the loan?

The In-Principle approval is given based on the data provided by the borrower. After receiving the In-Principle Approval, the lender will conduct a thorough due diligence and will take a call on whether to Sanction/Disburse the proposal. The final decision will be at the lender’s discretion

Is the payment of convenience fees mandatory to receive an in-principle approval?

Yes, the payment of convenience fees is mandatory for receiving an In-Principle Approval.

Is a receipt given when we pay amount?

Yes. The borrower will be sent a receipt along with the In-Principle approval letter in the verified E-Mail Address of the borrower.

I have received an In-Principle Approval Letter. What do I have to do now?

Congratulations!!! on receiving the In-Principle Approval. The branch you have sent your proposal to will contact you shortly for due diligence proceedings. In case there is no correspondence from the lender’s side, you can visit the selected branch with a copy of the In-Principle Approval Letter.

Is the In-Principle Approval Letter a guarantee that the loan will be received?

The In-Principle approval is given based on the data provided by the borrower. After receiving the In-Principle Approval, the lender will conduct a thorough due diligence and will take a call on whether to Sanction/Disburse the proposal. The final decision will be at the lender’s discretion.

What is the process for Manual Processing of proposal?

Once the borrower selects the branch where he wants to submit his proposal for manual processing, an E-Mail is sent to the borrower as well as the branch. The branch will contact the borrower within stipulated time to consider the proposal for manual processing
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