MSME loan in Jalandhar

As the name suggests, an MSME loan is designed to cater to the funding requirements of micro, small, and medium enterprises. Both government schemes, as well as private financiers, extend this financing option. Government options include MSME loan scheme 2020, Prime Minister Employment Generation Programme, etc.

Here are some of the characteristics of an MSME loan Jalandhar:

• Loan Amount: Businesspersons in this city can raise funds of up to Rs. 1 crore by availing an MSME project loan.
• Repayment Period: Individuals can repay the sanctioned loan amount within a period of 1 to 5 years. Depending on the lender and the scheme, the tenure can be as long as 15 years.
• Fixed Interest Rate: MSME interest rate is fixed throughout the entire tenure, which enables individuals to manage their finances better as they know the monthly instalment amount beforehand.
• Processing Time: The approval time for MSME loans can differ based on the source. Private lenders usually approve loans within 24 hours if it’s their own offering. For government-backed loans, approval can be time-consuming owing to extensive formalities.
• Disbursal Period: Post-approval, borrowers can receive the sanctioned amount within 24 hours if it’s obtained directly from financial institutions. However, for government schemes, this period can stretch up to a week or more than that.
• Interest Rates: Interest rates on collateral-free loans provided by banks and NBFCs are usually high. It also depends on a person’s MSME loan eligibility. A highly eligible applicant can secure an MSME loan at low-interest rates and vice versa.

End-use Restrictions: Government-backed MSME loans often involve end-use restriction, meaning borrowers can only use the amount for meeting a specific purpose. Bank loans, on the other hand, are free of such constraints. Enterprises can utilise such a loan for various purposes.

Here’s how MSME loans can help businesspersons:

• Strengthen Working Capital: All enterprises, whatever the scale of operations may be, require a sufficient amount of funds to purchase raw materials, pay overheads and more. In the case of working capital shortage, business owners can take out an MSME project loan to ensure that the daily operations are carried out smoothly.
• Purchase Of Machinery: Individuals can avail an MSME loan for machinery to purchase new equipment, increase the production volume, and maximise revenue.
• Implement New Strategies: Putting a plan into action can be challenging for many budding and established entrepreneurs, especially if it requires sizeable funding. MSME loans allow businesses to implement a strategy and increase their conversions.
• Boost Marketing: Both digital and offline marketing strategies require a considerable capital injection that may not be available with growing businesses. To combat this issue, they can avail an MSME loan/SME loan in Jalandhar.

To obtain funding from government-backed schemes, organisations need to meet the eligibility parameters set for MSMEs. This eligibility is based on two premises, primarily –

• Annual turnover
• Yearly revenue

MSME/SMEs considering term loans from banks or NBFCs have to satisfy a different range of criteria. Following are the general MSME loan eligibility criteria necessary to be fulfilled by a potential borrower.

• High CIBIL score (750+)
• The entrepreneur has to show a bona fide vintage of the business. It must be in operation from 6 months to 1 year.

• One has to disclose the financial records of the company

• Details on the business type and balance sheet
• A remarkable credit history
• The applicant must be aged between 25-65 years

It is recommended to check the MSME loan procedure and terms before proceeding with the application.

Apart from satisfying these parameters, a borrower needs to submit the following documents –

• The company’s bank statements for the last six months and ITR of the two years
• Balance sheet and Income statements for the preceding two years assessed by CA
• Memorandum & Articles of Association, registration of the corporation, partnership deed, PAN card and other KYC documents

The extensive parameter checks and documentation can make the process for loan disbursal time-consuming. It can become a burden for an entrepreneur requiring emergency funds.

In this regard, a gold loan offered by Rupeek can prove to be a better alternative. Individuals can obtain funding against their gold articles with only their KYC documents. Moreover, contrary to MSME loans, this form of financial assistance involves lenient eligibility criteria and low interest rates. Residents of the following areas in Jalandhar can avail our doorstep services.

• Jalandhar Cantt
• Model Town
• Phillaur
• Dayanand Nagar
• Goraya
• Rama Mandi
• Jandu Singha
• Lajpat Nagar
• Banga
• Apra

So, you can finally stop scanning Google for ‘MSME loan providers near me’ and contact Rupeek to ensure a hassle-free loan disbursal experience. Place a request via our app, and our loan manager will arrive at your location within 30 minutes to complete the necessary formalities for availing a gold-backed MSME loan/SME loan in Jalandhar.