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Amritsar

MSME loan in Amritsar

Amritsar, the second-most populous city in the state of Punjab, is noted for housing some of the most frequented tourist spots in India, including the Golden Temple, Jallianwala Bagh, Akal Takht, Ramtirth Temple, Gobindgarh Fort, etc. According to the Hindustan Times, a substantial portion of Punjab’s tourism revenue was generated from this city in 2017, with around 1 lakh tourists from around the country visiting Amritsar each day.

Geographically, the city is located quite close to Pakistan, with the Wagah Border being just 28 kilometres away. Over the years, it has also become one of the major commercial centres in the northern zone. With so many tourist attractions and a booming economy, Amritsar has become a prime spot for the development of Micro, Small and Medium Enterprises (MSMEs). Consequently, more emerging entrepreneurs and small business owners are opting for MSME loan/SME loan in Amritsar to build a substantial presence for their businesses.

In this regard, one must know what an MSME loan comprises to gauge if it is a viable financing option for his/her business.

Brief Overview Of MSME Loan

MSME loan/SME loan refers to the funding support that small business owners usually avail from lending institutions to fulfil working capital requirements or invest in business expansion. Further, with the government introducing various MSME loan schemes, this option has become viable financial support for many start-ups.

Some of the most prominent government MSME subsidy and loan schemes are as follows.

  • Credit Linked Capital Subsidy for Technology Upgradation (CLCSS)

Many small businesses lack the latest machinery intrinsic to seamless business operation. This government-aided scheme aims to solve this issue by providing a 15% subsidy on an equipment purchase, up to Rs. 1 crore.

  • MUDRA Yojana

This scheme offers start-ups and MSMEs financial aid ranging from Rs. 50,000 to Rs. 10 lakh. Depending on their growth stage, businesses are classified into Shishu, Kishore, and Tarun categories with different loan amounts.

  • Stand-up India

Best-suited for start-ups, the Stand-up India scheme is specially curated to support SC/ST and women entrepreneurs. Beneficiaries can avail funds worth Rs. 10 lakh to Rs. 1 crore.

  • Prime Minister Employment Generation Programme (PMEGP)

A credit-linked subsidy scheme, the PMEGP, was launched to generate increased self-employment opportunities. The Khadi and Village Industries Commission (KVIC) implements this programme at the national level.

Besides, entrepreneurs can also opt for similar financial products from banks and NBFCs. These are mostly unsecured business finance.

Nonetheless, most of these loans are available against stringent MSME loan eligibility requirements. Further, lending institutions may also seek a business vintage before sanctioning these loans, making it impossible for many start-ups to avail them. So, before proceeding to search ‘MSME loan provider near me in Amritsar’, one must learn about the terms associated with such funding options.

Eligibility Criteria For MSME Loan/SME Loan

To enjoy the benefits of a small business loan in Amritsar, enterprises need to fall under one of the following categories under the MSME loan scheme 2020 guidelines.

Business Size

Maximum Investment

Maximum Turnover

Micro

Rs. 1 crore

Rs. 5 crores

Small

Rs. 10 crores

Rs. 50 crores

Medium

Rs. 20 crores

Rs. 100 crores

This new division extends the previous investment limit to enhance inclusiveness. It also includes annual turnover as a determining factor. Depending on their categorisation, institutions can avail respective loan offerings.

However, while opting for a new loan scheme for MSME/SME, business owners usually focus on the attractive perks the loan offers and overlook other crucial aspects of the process.

For instance, the following is a list of eligibility criteria individuals need to meet to avail an MSME loan for their business -

  • Business Type - The company can be a partnership firm, limited liability partnership, sole proprietorship, or private or public limited.
  • Business Vintage - At least 2 years and should be in profit.
  • Must-Have Documents - ITR (last 2 years), GST Returns (last year’s), documents of good repayment history and an impressive credit score. All the documents should be CA certified as well.
  • Age Criteria: Between 18 and 66 years.

All these requirements often become challenging to meet. There are also a few other things that add to an MSME loan’s disadvantages. Unsecured business funds can prove unaffordable due to their high interest rates. On the other hand, government schemes require Amritsar business owners to undergo extensive documentation. Between a high MSME interest rate and strict documentation process, business owners can feel burdened with such an unsecured loan. In comparison, Rupeek’s gold loan, as a substitute option, stands out for its compelling benefits and instant, industry-first doorstep service.

Where To Find Us In Amritsar?

  • Katra Ahluwalia
  • Baba Bakala
  • Beas
  • Ajnala
  • Verka
  • Chheharta
  • Goal Bagh
  • Grant Trunk Road
  • Ramdass
  • Majitha
  • Lawrence Road
  • Medical Enclave

A gold-backed MSME loan/ SME loan in Amritsar is definitely an ideal funding choice owing to its convenient procedure and instant access to funds. Looking at Amritsar’s industrial profile, it is necessary for business owners to keep up with the city’s growth and choose the right time to invest money. And, with Rupeek, one can easily make that happen with an instant gold-backed MSME project loan.

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Benefits of Gold Loan over MSME/SME loan.
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We offer the highest per gram rate on our gold loans.

Today’s max loan value/gm () **

Today’s max loan value/gm ()
**
  • <1 lakh
  • 2 lakh
  • 3 lakh
  • 5 lakh
  • 10 lakh
  • 20 lakh
Comparision Parameters MSME / SME Loan Gold loan
Interest Rate 2.39% .79%
Monthly Interest Amount
Eligibility & Documentation More Documents Needed Only KYC Needed
Processing Time & Disbursement 2 days to 1 week Within a day
Required Gold Weight -
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Frequently asked questions

  1. How long does it take to get an MSME loan sanctioned?

 Most banks and NBFCs sanction MSME funds within 2 - 3 working days. However, government-aided loans come with a more elaborate verification process. This can extend their processing time to 7 working days.

  1. What types of MSME loans can I get from banks and NBFCs?

Private financiers offer different types of business loans for varied requirements. Some of these are terms loans, bill discounting, working capital finance, cash credit, merchant cash advance, equipment financing, invoice factoring, and letter of credit.

  1. Can I get an MSME loan/SME loan in Amritsar without credit checks?

No. Most banks and NBFCs require entrepreneurs to have a clean repayment history with no record of default. Applicants also need to have a CIBIL score of at least 750 to qualify for a small business loan.

  1. What documents do I need to qualify for a start-up loan?

Mandatory documentation for a successful MSME loan procedure entails ID proof, documents concerning business ownership, recent passport-sized photographs, and address proof. Applicants also need to submit financial documents like bank statements, ITR, audited balance sheet and P/L statements. Some government schemes for start-ups also demand a self-written business plan.

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