MSME Loan: Turnover Limit For Small Scale Industries In India

Small-scale industries in India play a major role in the economic growth of the country. These industries are largely manned by MSMEs (micro, small, and medium enterprises). To help them finance their businesses, various lending institutions like NBFCs offer MSME loans. 

These loans assist MSMEs in improving their current operations and expanding further. However, there is a criterion for availing such loans: the annual turnover of the business should not exceed a certain limit. In this blog post, we will explore what the MSME turnover limit is and how it affects small-scale industries in India.

What is An MSME Loan?

The MSME sector is the backbone of the Indian economy and contributes significantly to its GDP. The MSME loan is financial assistance provided by the government to help small and medium enterprises (SMEs) in setting up or expanding their businesses. The loan is also known as the Micro- and Small-Enterprise Loan.

The main objective of the MSME loan is to promote entrepreneurship and support the growth of small businesses in India. It helps SMEs meet their working capital requirements and invest in their plants and machinery. It also helps them expand their business operations, upgrade their technology, and improve product quality.

MSME loans are available from a number of financial institutions, including lending institutions, NBFCs, and SIDBI. The interest rate on MSME loans is generally lower than that on other types of business loans, making it easier for small businesses to repay the loan.

How To Apply For An MSME Loan In India?

If you're looking to apply for an MSME loan in India, there are a few things you'll need to keep in mind.

First, you'll need to have a clear understanding of what an MSME is. MSME stands for Micro, Small, and Medium Enterprises.

It's crucial to remember that the MSME turnover limit in India is INR 5 crores for microscale businesses, INR 50 crores for small businesses, and INR 250 crores for medium-sized businesses.

Now that you know what an MSME is, the second step is to begin the process of applying for an MSME loan. Identify the financial institution you want to apply with. There are many options available, so it's important to do your research and choose the one that best suits your needs.

Third, gather the MSME loan documents required. This will vary depending on the lender, but typically includes documents like proof of identity, proof of business, financial statements, and tax returns.

The final step is to fill out the application form. This is where you'll provide detailed information about your business, including its history, products or services offered, target market, etc. It's important to be as honest and accurate as possible when filling out this form as any false information could result in your loan application being rejected.

Must Read: Difference Between Business Loan And MSME Loan

Conclusion

Fullerton India offers MSME loans to such businesses for various purposes, including working capital, business expansion, and equipment purchases. The interest rate on Fullerton India's MSME loans are competitive. Loan tenures range from 12 to 48 months. There is no collateral requirement for loan amounts up to INR 50 lakhs*.

This makes it an ideal choice for those looking for financing to start or grow their business. With that said, make sure you understand your eligibility before applying for an MSME loan through our online business loan eligibility calculator and understand your monthly obligations for repayment through our online EMI calculator.