Documents Required For MSME Loans

Getting an MSME loan is very easy and quick. Get to know the list of documents required for MSME Loan to understand the nature of business, etc by IIFL Finance.

13 Sep,2022 12:31 IST 917
Documents Required For MSME Loans

The Micro, Small, and Medium Enterprises (MSME) sector is a significant contributor to India’s entrepreneurial spirit, generating employment for its people and advancing its socio-economic state of affairs. Furthermore, they contribute ~30% to India’s nominal GDP. With the proper support, MSMEs can push India’s growth trajectory upwards. MSME loans are ideal because of their potential and the consistent flow of funds that young and budding enterprises need.

What Are MSME Loans?

MSMEs may avail of financial assistance in the form of loans to aid their growth, expansion, and development. MSME loans are helpful for multiple purposes, such as meeting working capital requirements, installing new machinery/equipment, procurement of fixed assets or inventory, etc.

Lenders are very particular about the documentation submitted to them to award MSME loans. These documents help them understand the nature of business, profitability, ownership, et al. Hence, to procure funds quickly and easily for your MSME, make sure your documents are in order.

Documents Required For MSME Loans

Identity proof - Aadhaar card, driving license, PAN card, passport, voter ID.

Address proof - Lease agreement, ration card, utility bills like telephone or electricity bills which are not more than three months old.

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Business proof - MOA, AOA, certificate of incorporation, trade license, partnership deed, registration certificate, sales deed, GST registration certificate.

Financial documents and income proof -
◦ Last two years’ Income Tax Return (ITR),
◦ Last two years’ audited balance sheets and profit & loss statements,
◦ Last six months’ bank statements, projected turnover, etc.

• Business plan (this helps in understanding the business, industry, and growth prospects before sanctioning the loan).

MSME certificate or Udyam Registration Certificate.

• Duly filed and signed application form with applicants’ photographs.

Get Your MSME Loan From IIFL Finance

MSME credit growth is a testimony to the benefits of getting an MSME loan. As per the RBI, the credit growth in micro and small industries rose to 33% in May 2022, against 8.9% in May 2021. So, lift your small business to greater heights by availing of a loan from IIFL Finance. It is quick, hassle-free and 100% online - directly from the application to disbursement!

FAQs

Q1: Who is eligible for MSME loans?
Ans: MSME loans can be availed by self-employed professionals, entrepreneurs, sole proprietorships, start-ups, partnership firms, Limited Liability Partnerships (LLPs), etc. However, businesses falling under the retail trader segment, training or educational institutions, and agricultural and self-help groups are not eligible for MSME loans.

Q2: Is credit score important for availing of MSME loans?
Ans: A good credit score (750 and above) is always an added advantage.

Q3: Are MSME loans always secure?
Ans: MSME loans can be both secure and unsecured. It depends on the borrower, their repayment capacity, and the terms and conditions of the financial institution.

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Disclaimer: The information contained in this post is for general information purposes only. IIFL Finance Limited (including its associates and affiliates) ("the Company") assumes no liability or responsibility for any errors or omissions in the contents of this post and under no circumstances shall the Company be liable for any damage, loss, injury or disappointment etc. suffered by any reader. All information in this post is provided "as is", with no guarantee of completeness, accuracy, timeliness or of the results etc. obtained from the use of this information, and without warranty of any kind, express or implied, including, but not limited to warranties of performance, merchantability and fitness for a particular purpose. Given the changing nature of laws, rules and regulations, there may be delays, omissions or inaccuracies in the information contained in this post. The information on this post is provided with the understanding that the Company is not herein engaged in rendering legal, accounting, tax, or other professional advice and services. As such, it should not be used as a substitute for consultation with professional accounting, tax, legal or other competent advisers. This post may contain views and opinions which are those of the authors and do not necessarily reflect the official policy or position of any other agency or organization. This post may also contain links to external websites that are not provided or maintained by or in any way affiliated with the Company and the Company does not guarantee the accuracy, relevance, timeliness, or completeness of any information on these external websites. Any/ all (Gold/ Personal/ Business) loan product specifications and information that maybe stated in this post are subject to change from time to time, readers are advised to reach out to the Company for current specifications of the said (Gold/ Personal/ Business) loan.

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