MSME Loan in Guntur

Guntur is the third most populous city in the state of Andhra Pradesh. The city has the largest chilli market in Asia to its name, and the export of chilli, cotton and tobacco powers its economy. Over the years, Guntur’s economy has witnessed tremendous growth in three key sectors, namely Agro and Food Processing, Textile and Apparel and Cement.

However, small-scale organisations, like MSMEs/SMEs, require adequate financial support to keep pace with this evolving economy. In this regard, most business owners opt for an MSME loan/ SME loan in Guntur to finance the growth of their businesses.

What Is The Purpose Of MSME Loans?

Budding entrepreneurs or well-established businesspersons can opt for an MSME business loan to fulfil the following objectives:

  • Plug gaps in cash follow and fulfil the working capital required to purchase raw materials, pay wages, and ensure the smooth flow of daily operations.
  • Upscale and facilitate the smooth expansion of operations, like, opening a new branch in the city or diversifying product portfolio.
  • Instal new machinery or equipment that will boost the production process, subsequently maximising revenue and profits.
  • Improve inventory management efficiency, for example, restocking items that are in demand.
  • Launch an effective marketing campaign to build brand awareness and increase conversions.
  • Faster execution of plans and strategies to be one step ahead of the competitors at all times.
  • Increase the credibility of the organisation to attract more customers and acquire investors conveniently.

How To Get An MSME Loan/SME Loan in Guntur?

Most financial institutions in India extend loans for MSMEs/SMEs, and you can apply for one by visiting their website or app or visit their nearest branch. To avail such a loan, you must meet the stipulated eligibility criteria and provide required documents as proof of your credibility. While these requirements vary between various lending institutions, the following is a rundown of what they generally entail –

  • MSME/SME Loan Eligibility Criteria

MSME loan Scheme 2020 issued by the Government of India has modified the pre-existing classification of MSMEs/SMEs. The new criteria to classify a business as an MSME/SME includes:

  • Micro: An enterprise with an annual turnover of up to Rs.5 crores and investment up to Rs.1 crore
  • Small: An enterprise with an annual turnover of up to Rs.50 crores and investment up to Rs.10 crore
  • Medium: An enterprise with an annual turnover of up to Rs.250 crore and investment up to Rs.50 crore

Moreover, there are additional eligibility criteria that applicants need to fulfil to avail an MSME loan/SME loan in Guntur. Let’s delve into the details:

  • A 750+ credit score is preferred
  • Annual revenue should be above Rs. 25 lakhs, ideally
  • Minimum 2 years’ business vintage (6 months in some cases)

Lending institutions might check a few other factors when evaluating an MSME loan application.

  • MSME Loan Documentation Procedure

The SME/MSME loan process also mandates borrowers to submit a list of documents, such as -

  • Proof of identity: Aadhaar card, PAN card, Voter ID card, or other identity proof issued by GOI
  • Residential proof: Voter ID card, driver’s license, rental agreement or other government-issued address proof
  • Business address proof: Rental agreement, utility bills, etc.
  • Income proof: Bank account statements of the past 6 months and audited financial statements, such as balance sheet and profit and loss account.
  • Tax documents: Income tax returns (ITRs) and Sales tax returns

Features Of MSME Loans

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

  • Borrowers can access a loan amount up to Rs. 1 crore by opting for an MSME loan.
  • MSME loan EMIs remain fixed throughout the loan tenure; the rate of interest differs based on the lender.
  • MSME business loans come with flexible tenures and usually range from 12 to 180 months.
  • These are unsecured loans and do not require any collateral

Several government bodies in Andhra Pradesh, like DC MSME and MSME-DI, alongside financial institutions, provide various financing options for MSMEs/SMEs in the state. For instance, Andhra Bank launched the MSME-Mitra scheme in 2018 in an effort to mitigate the liquidity crunch that MSMEs often encounter.

However, factors like higher interest rates and a longer processing time can be off-putting in some cases. Moreover, the stringent MSME loan eligibility criteria and tedious documentation process can be an obstacle for most enterprises. Hence, secured loans, such as a gold loan offered by Rupeek, stand out as an apt alternative to MSME loan/SME loan in Guntur.

If you are in Guntur, you can opt for our services at any of the following locations by simply searching for ‘MSME loan/SME loan near me’ -

  • Manglagiri
  • Kanna Vari Thota
  • Tadikonda
  • Amaravathi
  • Nallapadu
  • Pedakakani
  • Thamma Ranga Reddy Nagar
  • Prathipadu
  • Velagapudi
  • Pedanandipadu

AP industrial profile holds a colossal range of businesses, including corporate giants to MSMEs and small businesses owned by female entrepreneurs. Each of these organisations needs to make crucial decisions in order to scale their business. And, when it comes to finances, Rupeek lends a hand and eliminates the complexities in loan proceedings. So, choose our gold MSME loan/SME loan in Guntur and enjoy a hassle-free borrowing experience.

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Benefits of Gold Loan over MSME/SME loan.
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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
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Frequently asked questions

  1. Can I get an MSME loan if my CIBIL score is 500?

Most financial institutions prefer a CIBIL score of 750 and above. Hence, it’s not possible for individuals to avail unsecured MSME business loans with a credit score of 500.

  1. What is the MSME loan interest rate?

MSME loan interest rates usually range from approximately 8% to 22%. Interest rates on this type of credit option depend on the lending institution. Borrowers can search ‘SME loan provider near me’ to find out the loan providers nearest to their locations

  1. Is there any overdraft facility on an MSME/SME loan in Guntur?

Certain lending institutions do provide an MSME loan overdraft facility. It enables businesspersons to make withdrawals into their account from a pre-approved credit limit to meet various business-related requirements. Moreover, they have to pay interest only on the amount they use.

  1. How to get an MSME loan with a low credit score?

Lending institutions usually do not extend collateral-free MSME loans to applicants with a low credit score. Government schemes can be an option in that regard, but a minimum credit score is mandatory. One can consider a secured MSME loan/SME loan in Guntur to that end.

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