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Micro, small, and medium-sized enterprises (MSMEs) form the backbone of India’s economy, owing to their considerable contribution to the country’s GDP, exports, and employment generation. At present, there are approximately 6.3 crore MSMEs in India, contributing to around 30% of India’s GDP and more than 40% of total exports. Moreover, MSMEs are the second-largest employer in India after the agriculture sector. To help these MSMEs grow and flourish without being affected by financial hurdles, Tata Capital offers MSME loans or SME loans at competitive interest rates.

What is MSME Loan/SME Loan?

An MSME loan or SME loan is a unique type of business loan provided exclusively to startup owners or small and medium-sized business enterprises in India. That is why an MSME loan/SME loan is also known as a startup business loan or simply a startup loan. An MSME loan/SME loan can be used as working capital or for long-term business requirements, such as buying equipment, upgrading infrastructure, and hiring manpower.

 

With Tata Capital’s MSME loan/SME loan, you can acquire funding of up to Rs. 90 lakhs and meet your various short-term and long-term business requirements. Our business loans for startups come with features like easy eligibility, minimum documentation, and doorstep services. Moreover, our MSME loan interest rate is highly competitive, starting from just 15% per annum.

Product Offerings

Along with the affordable interest rates and easy eligibility, our business loans for startups come with the following product offerings:

  • Loan Amount

    We offer a loan amount of Rs. 1 lac to Rs. 90 lakhs as a startup business loan or MSME business loan. You can choose your startup loan amount as per your precise needs

  • Loan Tenure

    Our MSME loan/SME loan is issued for a tenure of 12 months to 60 months. It means that you have the flexibility to choose your business startup loan tenure as per your repayment capability

  • Interest Rates

    We provide loans for startups at highly affordable rate of interest, starting from just 15% per annum

  • Customized Products

    Our business loans for startups are highly customizable to suit the specific needs of startup businesses. You can set the dimensions of your MSME loan/SME loan as per your exact business requirements

  • No Collateral

    We provide MSME loan for startup businesses without asking for collateral or security. It means that you are not required to pledge your personal or business assets to avail of a startup business loan from us

  • Multiple EMI Options

    Our business loans for startups come with multiple EMI options. You have the flexibility to choose a suitable EMI plan for your MSME startup loan and structure your startup loan repayment according to your cash flow

  • Easy Eligibility

    We understand that startup business finds it difficult to get a loan for SME in India. That is why we offer MSME business loans for startups with relatively easy eligibility criteria. Our MSME loan eligibility and MSME loan process are simple and hassle-free

Calculating an MSME/SME Loan EMI

As an MSME owner, every penny is crucial for you. Since your business is still in its growing stage, you need to be diligent with your financial choices. Hence, before applying for an MSME loan, you must make sure that its EMIs are affordable and do not disrupt your financial cycle. Calculating your MSME loan EMIs in advance enables you to plan your loan repayment better.

EMIs, or Equated Monthly Instalments, refer to the amount you need to pay to your lender every month to repay your SME business loan. They depend on three basic factors:

Principal Loan Amount

The “principal loan amount” is the most crucial factor that determines your SME loan EMIs. It refers to the amount you have borrowed from a lender to fulfill the working capital requirements of your business. If you borrow a high loan amount, your SME loan EMIs will also increase since you will have to repay a significantly larger sum. Thus, it’s crucial to assess your financial requirements carefully and apply for the right loan amount.

Loan Tenure

Another factor that plays a major role in determining your MSME loan EMI is the “loan tenure”. It refers to the period or duration for which you have taken a business loan. If you want to spread your SME loan repayment into smaller EMIs, you can opt for a longer loan tenure. However, doing so would increase your overall interest outgo. On the flip side, if you can afford to pay larger EMIs and want to reduce your borrowing costs, you can opt for a shorter loan tenure.

Rate of Interest

The third factor that determines your SME loan EMI is the applicable rate of interest. Your MSME loan interest rate is decided by the lender at the time of loan approval. A higher interest rate results in larger EMIs since the total interest amount you need to pay to the lender increases. You can secure the lowest MSME loan interest rate based on your credit score, age, business experience, and a sound business plan for the future.

Once you know these MSME loan details, you can calculate your loan EMI through a mathematical formula mentioned below:

E = P x R x (1+R) ^ N / [(1+R) ^ N – 1]

Here, ‘E’ is your SME Loan EMI, ‘P’ is the Principal Loan Amount, ‘R’ is the applicable Rate of Interest on a monthly basis, and ‘N’ is the Loan Tenure in months.

If you don’t want to go through complex mathematical calculations, you can use our online business loan EMI calculator to determine your SME loan EMIs. All you have to do is enter your loan amount, loan duration, and the applicable rate of interest in this calculator, and it will display your monthly EMI within a few seconds.

Features and Advantages of MSME Loan/SME Loan

As an MSME or SME owner, you can avail of an MSME loan/SME loan from Tata Capital and fulfill all your business's financial requirements. Our MSME business loan is easy to get and offers the following advantages:

Get Access to Working Capital

Adequate working capital is essential for conducting day-to-day business operations. You can use our SME business loan to meet your business’ working capital requirements. Be it paying for the inventory, clearing short-term debts, or remunerating your monthly utility bills; you can manage all short-term requirements of your business through a startup business loan.

Update Your Infrastructure

By availing of an MSME business loan, upgrading your workplace infrastructure can become an inexpensive task. Our business loans for startups are meant to provide high-value financing to small business owners at affordable interest rates.

Hire Competent Personnel

No business can thrive without efficient and competent staff. Our startup business loan can ensure that the lack of funds can never deter you from hiring the best workforce for your business. We provide startup loan for new businesses as well as established enterprises so that they can achieve greater heights.

Expand Your Business

The expansion of business may demand significant finances. But with the availability of business loans for startups, you don’t have to worry about arranging finances for your business expansion. You can simply avail of an MSME startup loan and meet all your financial requirements without any hassles.

What are the Eligibility Criteria for MSME Loan/SME Loan?

The eligibility criteria and documents required for MSME loan may vary from one lending institution to another. If you want to avail of an MSME business loan from Tata Capital, you must meet the following MSME loan eligibility criteria:

    • Age- To be eligible for our startup business loan, your age must be between 21 and 65 years

    • Business Profitability - We provide business loans for startups to those businesses which have shown consistent profits for at least the past three years

    • Business Turnover - Your business turnover must indicate an upward trend if you want to apply for our MSME loan scheme

    • Balance Sheet - The balance sheet of your business must be audited by a registered Chartered Accountant if you want to avail of our MSME loan for startup business

  • Please note that our MSME loan process may involve some other eligibility requirements as well.

What are the Interest Rates and Charges for MSME Loan/SME Loan?

Just like any other loan, business loans for startups involve certain charges and fees. These charges can be classified into three categories - General Charges, Miscellaneous Charges, and Foreclosure Charges. The details of the charges applicable on Tata Capital’s business startup loan are mentioned below:

General Charges

Below are the general charges applicable on our MSME loan/SME loan:

Interest Rate

Starts at 15% p.a.*

Processing Fee

2.50% of the loan amount + GST

Stamp Duty

As Applicable

Penal/Additional Interest Rate

3% on Overdue amount per month + GST

  • Interest Rate - The rate at which you’ll have to pay interest on your startup business loan is known as the interest rate. Our interest rates on business loans for startups start from 15% per annum
  • Processing Fee - We charge a one-time processing fee at the time of the MSME loan apply. This processing fee is non-refundable even if the loan doesn’t get sanctioned
  • Stamp Duty - We charge a legal fee - known as stamp duty - for the preparation of the SME business loan agreement. This fee may vary from one state to another
  • Penal Interest or Additional Interest - In the case of delayed EMI payment of your startup business loan, we will charge an additional interest over and above your existing startup loan interest rate

Miscellaneous Charges

Below are the miscellaneous charges that would apply to your MSME loan/SME loan:

Prepayment / Foreclosure Charges

Foreclosure charges on Term Loan Facility:
**4.5% on the principal outstanding at the time of foreclosure + Applicable Taxes

No foreclosure is allowed in first 9 months.6.5% charges if foreclosed within 9 months

 

Foreclosure charges on Top Up:
2.25% on the principal outstanding at the time of foreclosure + GST

Foreclosure charges shall be levied only if new rate is lower than existing rate.

 

**Foreclosure Charges in Dropline Facility:
4.5% on the Dropped down limit amount + Applicable taxes

No foreclosure is allowed in first 9 months.6.5%charges if foreclosed within 9 months

Processing Charges

As Applicable

Payment Instrument swapping

 

Rs. 550/-

Dishonour Charges

Rs 600 for every Cheque/ Payment Instrument Dishonor

Mandate rejection service charges

Rs. 450/-

(Charges will be levied if new mandate form is not registered within 30 days from the date of rejection of previous mandate form by Borrower’s bank for any reasons whatsoever.)

Annual Maintenance Charges (Dropline facility)

First Year: 0.75% or 1000 whichever is higher per year will be deducted from the limit and shall be payable at the end of the 13th month


Subsequent Years
: 0.50% or 1000 whichever is higher per year will be deducted from the limit and shall be payable at the end of the 13th month

Document processing charges

Rs. 1999/-

Cancellation charges

2% of the Facility amount OR

Rs. 5750/- Whichever is higher

Duplicate Repayment Schedule

Rs. 550/-

Duplicate NOC

Rs. 550/-

Statement of Account (SOA)

Customer portal – Nil

Branch walk in – Rs. 250 /-+ GST

Foreclosure Letter Charge

Customer portal – Nil

Branch walk in - Rs 199/- +GST

Post Dated Cheque Charges Rs

Charges Rs 850+GST

section 138 and section 25 filing

Rs. 3400/-

Arbitration Filing

Rs. 4000/-

Receiver Order

District Court: Rs. 4000/- and High court: Rs. 13,500/-

Notice

Rs. 125/-

Legal Notice

Rs. 300/-

Lawyer fees

(at actuals)

Execution of award

Rs. 5600/-

Note: (GST, other government taxes and levies as applicable, will be levied on all fees and charges.)

 

  • Bounce Charges - Bounce charges or dishonor charges will be levied if your EMI gets bounced. This usually happens due to the lack of funds in your bank account
  • Mandate Rejection Service Charge - A mandate rejection service charge is levied if you reject any of the services rendered by us
  • CCOD Annual Maintenance Charge - We also provide a Cash Credit (CC) or Overdraft (OD) facility on our business loans for startups. However, this facility accompanies CCOD annual maintenance charges for the maintenance of CC or OD accounts
  • Document Processing Charge - When you apply for an MSME loan, we have to process certain documents, such as loan agreement, indexing, etc. We levy a document processing charge for processing such documents
  • Outstation Collection Charge - If you’ve issued your payment cheques to a non-local branch, we’ll levy an outstation collection charge for the collection of these cheques
  • Statement of Accounts - To issue a hard copy of your Statement of Account, i.e., the list of transactions made from your bank account during a given period, we’ll collect a nominal fee. However, a soft copy is issued free of charge
  • Loan Cancellation Charges - If you wish to apply for the cancellation of your loan after its disbursal, we’ll levy loan cancellation charges
  • Payment Instrument Swapping - Swapping or exchanging your payment mode with a different financial instrument will attract payment instrument swapping charges
  • Duplicate Repayment Schedule - We will issue your original loan repayment or amortization schedule for free. However, the issuance of a duplicate repayment schedule will attract certain charges
  • Duplicate NOC - Once you’ve paid all EMIs of your business startup loan, we will send a No Objection Certificate (NOC) to your mailing address. But if you end up losing this NOC, we will issue a duplicate NOC after collecting a duplicate NOC fee
  • Post-Dated Cheque Charges - You can make your EMI payments via post-dated cheques or PDCs. However, you will be charged with PDC charges for this

Foreclosure Charges

Below are the foreclosure charges applicable on our MSME loan/SME loan:

Foreclosure Charges

  • 4.5% of the principal outstanding on existing loan + GST
  • No foreclosure allowed for the first nine months

Foreclosure Charges for Top-up

  • 2.25% on the principal outstanding on the existing + GST
  • Foreclosure charges shall be levied only if the new rate is lower than the existing rate

Foreclosure Charges for CCOD

  • 4.5% on the Dropped Down limit amount + GST
  • No foreclosure is allowed for the first nine months

Foreclosure Letter Charge

  • Soft Copy – Nil
  • Branch Walk-In – Rs. 199 + GST
  • Foreclosure Charges - You can choose to foreclose your SME loan by making prepayments or part prepayments on it. However, every time you make a prepayment on your SME business loan, you will have to pay a foreclosure charge
  • Foreclosure Charges for Top-Up - You can also avail of a top-up loan on your SME loan. But if you wish to foreclose your top-up loan before the end of its tenure, you will have to pay a foreclosure charge on the top-up loan
  • Foreclosure Charges on CCOD - You can benefit from our flexible funding options, such as CC and OD limit facilities on business loans for startups. Upon the foreclosure of our CCOD account, you will be charged with a foreclosure charge on CCOD
  • Foreclosure Letter Charge - If you’ve opted to foreclose a loan, you will need a foreclosure letter from us. Although the soft copy of this letter is free, the hard copy is chargeable

How to Apply for a Tata CapitalMSME Loan/SME Loan?

How to Apply for a Tata Capital MSME Loan/SME Loan?

Several lenders provide loan for SME in India. With Tata Capital, the MSME loan apply process is simple and hassle-free. You can do it in any of the following ways:

  • Branch

    You can physically visit your nearest Tata Capital branch and get in touch with our representative to apply for an MSME loan

How to Apply for a Tata Capital MSME Loan/SME Loan?

Several lenders provide loan for SME in India. With Tata Capital, the MSME loan apply process is simple and hassle-free. You can do it in any of the following ways:

  • Online

    You can visit our website for MSME loan apply online from the convenience of your home or office

  • Virtual Assistant

    You can take the help of our 24x7 virtual assistant for MSME loan apply anytime and from anywhere

  • Phone Call

    You can dial our customer care number 1860 267 6060 between 9 am and 8 pm on Monday to Saturday to apply for an MSME loan through your mobile phone

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What our customers say about us

Entire Service is very professionally organised. Thanks a lot.

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Business Loan | 15 February, 2024

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Business Loan | 08 February, 2024

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