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Bhopal

MSME loan in Bhopal

Bhopal, the 16th largest city in India, is renowned for its lakes and steel industries. It is home to a large number of lakes – artificial and natural – and is also considered one of the greenest cities in India.

The electrical goods, textile, jewellery, and chemical industries, comprising numerous MSMEs, are significant contributors to this city’s economy. Plus, the Madhya Pradesh government’s continual efforts have created lucrative opportunities for rural and urban entrepreneurship in particular. Naturally, the numbers of prospective borrowers of MSME loan/SME loan in Bhopal have grown by leaps and bounds over the years.

However, it’s necessary to learn about the MSME loan in details, as well as alternative financing options, to ensure sound financial management.

What Are The Types Of MSME Loans Available In Bhopal?

To generate more employment, the Central and MP state government have introduced several schemes to boost the MSME sector. The schemes offered are listed below-

  • Coir Vikas Yojana (CVY)
  • Prime Minister Employment Generation Programme (PMEGP)
  • SSI Loans in MP or Small Scale Industries Loan Scheme
  • Skill Upgradation and Mahila Coir Yojana (MCY)
  • Market Promotion and Development Scheme (MPDA)

Besides these financing options, companies can also avail MSME loans directly from banks and NBFCs.

However, before availing an MSME loan/SME loan in Bhopal, businesspersons should be aware of the new definition of MSMEs in India. As per the announcement by the Indian Government in May 2020, small micro and medium organisations are now categorised based on investment value and annual turnover. Moreover, now the parameters are similar for businesses belonging to the manufacturing and services sectors. Let’s take a look at them.

  • Micro Enterprises: The value of the investment is not more than Rs. 1 crore, and the annual turnover should be a maximum of Rs. 5 crores.
  • Small Enterprises: The investment amount does not exceed Rs. 10 crores, and the annual turnover should not be more than Rs. 50 crores.
  • Medium Enterprises: The amount of investment is a maximum of Rs. 20 crores and the annual turnover must not exceed Rs. 100 crores.

Micro, small, and medium-scale organisations can opt for MSME loans to fulfil the following purposes:

  • Efficient management of working capital
  • Purchase new equipment
  • Introduce a new product line
  • Open new facilities
  • Finance marketing expenses
  • Replenish inventory

Features Of MSME Loans

Here are some of the features of an MSME loan/SME loan in Bhopal:

  • High Loan Amount: Individuals can raise up to Rs. 1 crore by availing an unsecured MSME project loan. However, borrowers must note that the maximum loan amount that can be sanctioned is dependent upon the loan provider’s policy.
  • Fixed Interest Loans: MSME loan interest rate remains fixed throughout the repayment period. This enables businesspersons to manage their finances better. The rate of interest on MSME loans usually differs based on the loan provider. Nevertheless, it usually ranges from 8% to 22%. It might be more or less depending on the lending institution.
  • Flexible Repayment Period: Every MSME loan scheme 2020 come with flexible repayment periods. The tenure can range from 1 year to 15 years, depending on the choice of lenders and the credit repayment history of borrowers.
  • Unsecured Loan: An MSME loan/SME loan is an unsecured loan. Hence, financial institutions, such as banks and NBFCs, do not require borrowers to pledge any property for approving the loan amount.

Besides these features, prospective borrowers should also take note of the charges concerning this type of unsecured loan.

MSME Loan – Fees And Charges

The following fees and charges are associated with MSME loans:

  • Processing Fee: Usually, the processing fees for small business loans range from up to 4% on the loan amount.
  • Foreclosure Charges: MSME loan foreclosure charges can vary across financiers and can go up to 5% of the outstanding loan amount.
  • Part-payment Charges: Part-payment charges of MSME loans can range from nil to 4%.
  • Loan Cancellation Charges: MSMSE loan cancellation charges depend on your choice of lending institution. Note that not all financiers levy this charge.

Besides knowing the fees and charges concerning MSME loans, individuals should also know how to calculate MSME loan EMIs before applying for one to ensure smooth repayment.

MSMEM Loan EMI Calculation

Borrowers can calculate their MSME business loan EMIs using the formula given below:

MSME loan EMI = P.r.(1+r) n/ [(1+r)^(n -1)

Where,

P = Loan amount

r = Rate of interest

n = Loan tenure (in months)

Entrepreneurs can also take the help of online MSME business loan calculators that are available online for free to compute their monthly EMIs.

However, to avail financing for their enterprise, individuals need to satisfy stringent MSME loan eligibility checks. Moreover, the loan disbursal process can take up to or even more than 10 days, especially when opting for government-backed options. This can be troublesome for businesspersons requiring immediate funds.

MSME or SME loan, being unsecured in nature, mandates borrowers to submit official papers like bank statements of the company for the last six months, income tax returns preceding two years, audited Balance Sheet and income statements, etc.

Moreover, applicants have to maintain a high CIBIL score of 750 to be eligible for an MSME loan. The interest rate levied on unsecured loans for MSME in Bhopal by NBFC’s are also high that significantly augments the cost of borrowing.

These hefty processes can become a burden for an entrepreneur requiring emergency capital. In such a scenario, individuals can consider taking a gold-backed MSME loan from Rupeek that comes with multiple feasible terms of service and lower interest rates. Compared to conventional MSMSE loans, these are secured and involve a hassle-free application procedure.

Borrowers looking for a ‘gold-backed MSME loan provider near me’ in Bhopal can avail our services instantly. We operate across the following localities in Bhopal:

  • Gandhi Nagar
  • Bagh Swaniya
  • Bairagarh
  • Bhel Town
  • Arera Hills
  • Jahangirabad
  • Vallabh Bhawan
  • Kolar Road
  • Chuna Bhatti
  • Govindpura
  • Anand Nagar
  • Kohefiza

A continually developing infrastructure has made Bhopal a distinct region for MSMEs in Madhya Pradesh. That’s why the company holder must be efficient with their financing. A gold-backed MSME loan/SME loan in Bhopal from Rupeek can be beneficial in this regard.

Apply today for gold-backed MSME loan scheme 2020 and get a step closer to your dreams!

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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.

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Today’s max loan value/gm ()
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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. Do financial institutions provide an overdraft facility on MSME loans?

Yes, there are financial institutions that extend an overdraft facility on MSME loans/SME loans in Bhopal. However, the approved credit limit may vary from one lending institution to another. Hence, it’s imperative that borrowers enquire about the details before availing such facilities.

  1. Do I need to submit tax documents to avail an MSME loan?

Yes, businesspersons have to submit income tax returns (ITRs) and sales tax returns besides providing other income-related documents to avail MSME loans.

  1. Can a sole proprietor get an MSME loan/SME loan in Bhopal?

Yes, sole proprietors can avail an MSME loan in Bhopal if they satisfy the eligibility criteria of the particular financial institution or loan scheme.

  1. Can I obtain a gold-backed MSME loan with a CIBIL score of 650?

You can acquire a gold-backed MSME loan/SME loan in Bhopal with or without a CIBIL score. Having a CIBIL score is not mandatory in terms of a gold loan.

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