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- MSME Loan for Corporates
Easy access to capital
Improved cashflow management
Flexible repayment terms
Potential tax benefits
Competitive interest rates
Overview
An MSME (Micro, Small and Medium Enterprises) loan is a financial product designed specifically to support the growth of Micro, Small and Medium Enterprises businesses in India. It provides the necessary capital for the businesses to expand operations, invest in equipment, or meet working capital needs. These loans are provided by Banks to meet the diverse requirement of small business owners. MSME loans are available to a wide range of business and individuals involved in manufacturing, trading or service activities. Benefits of MSME loans include easy access to capital, improved cashflow management, flexible repayment terms, potential tax benefits and competitive interest rates. Factoring transactions pertaining to MSMEs can be availed through the Trade Receivables Discounting System (TReDS).
Timeline for credit decision (MSME loan sanction)
Axis Bank will convey its decision on the loan application as per the following timeline:
| Loan Amount | Timeline for Credit Decision |
|---|---|
| Upto ₹25 lakh | 14 working days |
| Above ₹25 lakh up to ₹1 Cr | 30 working days |
| Above ₹1 Cr up to ₹5 Cr | 45 working days |
| Above ₹5 Cr | 60 working days |
The timeline shall be calculated from the date of the application, provided the application is complete in all respects and is submitted along with all documents as may be required by the bank for proper appraisal of the application. The computation of the timeline shall start from the day on which all documents required for a proper appraisal are provided by the customer to the bank.
Revised Parameters for MSME Loans
- Credit Guarantee Scheme: Increased limit for collateral free loans to micro and small enterprises (MSEs) sector from ₹5 lakh to ₹10 lakh.
- Startup Support: Start-ups MSME, as per definition of Ministry of Commerce and Industry, Govt. of India can avail export credit up to ₹50 crore.
- Exporters: Export-focused MSME borrower can avail export credit up to ₹40 crore.
Eligibility Criteria
Eligibility for MSME loans typically depends on business classification, type, turnover, vintage, financial stability, creditworthiness, compliance, and having a business plan. All bank loans to MSMEs shall qualify for classification under priority sector lending. Understanding these aspects helps businesses secure necessary funding for growth and sustainability. All the MSME enterprises are required to register online on the Udyam Registration portal and obtain ‘Udyam Registration Certificate.
MSME Classification
- Micro – Investment Limits – Up to ₹2.5 Crore & Turnover limits – Up to ₹10 Crore
- Small – Investment Limits – Up to ₹25 Crore & Turnover limits – Up to ₹100 Crore
- Medium – Investment Limits – Up to ₹125 Crore & Turnover limits – Up to ₹500 Crore
Types of MSME Loans
Different types of MSME loans exist to meet specific business needs:
- Term Loans: For long-term investments.
- Working Capital Loans: For daily operational expenses.
- Machinery Loans: Specifically for purchasing equipment.
