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Tata Capital > Blog > Loan for Business > Best Way to Get an MSME Business Loan

Loan for Business

Best Way to Get an MSME Business Loan

Best Way to Get an MSME Business Loan

What is an MSME?

Micro, Small and Medium Enterprises or MSMEs are administered by the Ministry of MSMEs. It is under the Micro, Small and Medium Enterprises Development (MSMED) Act, 2006 sanctioned by the Government of India.

This industry is regarded as the pillar of the Indian economy. It provides employment to most of the citizens of our country. The Ministry of MSME manages the fabrication and administration of regulations, rules and laws related to MSME as a way of boosting it.

What is an MSME business loan?

Small and medium-sized businesses make a crucial contribution to helping the country develop. The MSME sector accounts for over 40% of our country’s GDP as about 12 crores of India’s population is employed in this sector. That’s not it.  96% of MSMEs expect their profit to increase in 2023. These are not mere facts; instead, they show India's bright future towards Atmanirbhar Bharat.

Thus to support people who run these MSMEs and help them grow their businesses and their economy, there are many schemes and MSME loans in India aided by the government in order to decrease the financial issues faced by people in the MSME sector. Moreover, the MSME loan provided is an unsecured business loan.

According to reports, about 63.05 million micro-businesses, 0.33 million small businesses, and around 5,000 medium-sized enterprises are functioning currently.[2] A micro-industry involves investments of less than Rs.10 lac. A small industry includes investments of more than Rs.10 lac but less than Rs.2 crore. A medium-sized industry involves investments of more than Rs.2 crore but less than Rs.5 crore.

Schemes Offered by the Government for MSME Business Loans

#1 MSME Loan in 59 Minutes

MSME business loan or PSB loan in 59 minutes is a government-launched digital platform that ensures speedier loan disbursement for entrepreneurs who want to expand their current businesses. Borrowers can obtain a lump sum loan amount ranging from Rs.1 lakh to Rs.5 crore from NBFCs and banks in 59 minutes at an interest rate of 8.50% p.a.

A bonus point of this MSME loan for business in 2023 is that the borrowers are not required to put up any collateral because this portal is linked to the CGTMSE scheme (Credit Guarantee Fund Trust for Micro and Small Enterprises).

#2 Credit Linked Capital Subsidy Scheme

CLCSS enables MSMEs to catch up to the rest of the world regarding technology. The scheme provides a 15% subsidy for additional spending up to 1 crore to integrate cutting-edge technology into business procedures.

#3 Pradhan Mantri Mudra Loan Scheme

There are many MSME loan schemes available for this flourishing industry. One such scheme is the Pradhan Mantri Mudra Loan Scheme launched in 2015. Under this Mudra Loan Scheme, small and medium-sized businesses are given collateral-free loans or unsecured business loans up to Rs.10 lakhs in three categories.

The three categories are Shishu Loan, Kishore Loan and Tarun Loan. In Shishu Loan, an MSME loan is offered up to Rs.50,000. In Kishore Loan, a loan from Rs.50,000 to Rs.5 lakhs is given. Lastly, in the Tarun Loan, a loan of Rs.5 lakhs to Rs.10 lakhs is offered. For people requiring small business loans, they can avail of the Kishore Loan or the Tarun Loan.

MSME Loan Eligibility Criteria:

Loan providers have established basic eligibility requirements for individuals and businesses to apply for an MSME business loan in India. The following individuals are eligible for an MSME loan:

#1 Six months old and above businesses can only apply for the MSME loan.

#2 The minimum turnover for getting the loan approved would have to be Rs.90,000, three months before the loan.

#3 The business should not have been blacklisted.

#4 The business should not be situated in the negative location list.

How to apply for an MSME Loan:

Follow these few simple steps to apply for an MSME business loan in India:

#1 The national portal for registration of MSME is website.

#2 Fill out your details such as the Aadhaar number and Name of the Entrepreneur. Click onto the validate option to generate an One Time Password (OTP).

#3 The registered mobile number linked to your Aadhaar card will receive the OTP. Fill out the OTP to click on “Validate” to receive an application form.

#4 Fill in the required details.

#5 Click on “Submit” after having filled out your details.

#6 Again an OTP would be received on your Aadhaar-linked number. Fill the OTP to click on the “Final Submit” of your application.

#7 Note the registration number on the final page. Do not forget to note it down for future reference.

Benefits of MSME loans:

There are many benefits in availing a small business loan. The businesses registered under MSME are automatically eligible for a subsidy. They are offered an exemption to the internet garnered on the overdraft from banks. The charges are reimbursed if the company services or products are ISO certified.

Subsidies are automatically available while registering for patents when requiring one. A small business loan is an unsecured business loan which is given under the Credit Guarantee Trust Fund Scheme. There are concessions on electricity charges. If under any circumstances, payments are delayed by the company, they’re provided protection.

Tata Capital’s Unsecured Business Loan aids in providing quick and hassle-free funding for a small business loan with flexible options while repaying. They offer loans that are tailored to suit your own requirements. They’re custom-built in terms of your business needs. You can also customize the monthly loan repayment at your convenience.


For any type of industry under the MSME sector, it is natural to be struggling financially at a point in time. Applying for a small business loan is a smart move for an entrepreneur. It serves many benefits and is launched by the government to help the MSME sector.  You can also avail unsecured Business Loan provided by Tata Capital to further your business objectives.

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