What is the SME loan eligibility?

September 22, 2023
Updated on

SME loans are given to provide financial support for small and medium-sized companies. The SME loan offers a flexible capital to meet SME needs. It can be used both for long-term needs and as working capital. This loan is approved after considering the company’s type, cash flow and time of formation. All small and medium-sized enterprises, including micro-enterprises specified under the MSMED Act, can apply for this loan with a specified sales turnover. For MSME loan eligibility, specifications vary from lender to lender. The loan interest rate depends on the profile, business history and loan amount of the borrower.

How Are SME Loans Helpful for Small Business Owners?

  • A small business might benefit from MSME business loan by supporting the owner to buy inventory without waiting for cashflow.
  • Small businesses profit more from different forms of MSME loans. 
  • Compared to other business loans that need heavy paperwork and good credit history, MSME loan eligibility is basic, and hence these loans are quick to get.
  • Often, MSME loans are unsecured. This means that collateral is not needed for them. 
  • You would not have to give property documents or mortgage business machines to get funds as an MSME member. Some basic evidence would be important for business records.
  • Mostly MSME loans are used to fulfil short-term and long term plans. This will help you with the day to day working of your business.
  • You will tap into growth opportunities with MSME loans, thus increasing your sales and number of customers.

Grow your MSME with collateral-free business loans

Let Us Understand MSME Loan Eligibility in Detail

The basic eligibility criteria at Kinara Capital are based on the below-mentioned parameters:

1. Sector/Sub-Sector- Manufacturing, Service and Trading 

As per the latest definition of MSMEs, micro-units can have investments up to Rs 1 crore and a turnover of less than Rs 5 crore. The investment limit has been raised from Rs 5 crore to Rs 10 crore for the small units with less than 50 crore turnover. Thirdly, the enterprises with investments up to Rs 20 crore and a turnover of less than Rs 100 crore will now be called medium units. Earlier the MSMEs were defined based on the investment, but now the company’s turnover is also included.

2. Requested loan amount: 

Requested loan amount should be between Rs 50,000 and Rs 30,00,000.

3. Pin code: 

The business should be in a pin code area that Kinara Capital is serving. We are currently serving 4500+ pin codes across six states. (Karnataka, Andhra Pradesh, Telangana, Gujarat, Maharashtra, Tamil Nadu)

Post the basic eligibility test; many other parameters are considered, such as credit score, bank statements, personal & business KYC, GST and other certifications such as Udyam registration, GST, NOC etc. 

 Once you clear all the steps, our loan officer will follow up with you and process the rest of the application. Kinara Capital is now able to give a loan within 24-hours.

Look at Some Experiences of Kinara Customers:

Mohan Mali

Shree Packaging

“After I started my business, I needed working capital urgently for a big order. Kinara approved my loan very quickly. I was able to increase production and add another unit. Now, I have a staff of 24 people, and my turnover has increased by four times!”

Laxmi and Pothala Venkatrao

Laxmi Shyamasree Super Market

“With the help of Kinara Capital, we could purchase stock directly from the mills. We have hired more employees and have extended our reach by providing home delivery services. Other small shops in our vicinity now come to us to purchase stock. We are hoping to double our turnover next year, and we are confident we will surely reach it.”

These loans are tailor-made to meet the requirements and needs of MSMEs. The MSME loan from Kinara Capital will prove to be the smartest financing choice for your business. Whether you are looking to invest in infrastructure or maintain a regular cash flow, we are here to help you with 133 branches across Andhra Pradesh, Telangana, Karnataka, Gujarat, Maharashtra, Tamil Nadu and UT Puducherry. 71,000+ new jobs were created as a direct result of the loans provided by Kinara. Total loans that we have given till now are of Rs 1900 Crores.

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