1. Blog
  2. >
  3. Policy
  4. >
  5. Govt Schemes
  6. >
  7. How To Get MSME...

How To Get MSME Loan For New Businesses? Explore The Loan Schemes For MSME Businesses

How to Get MSME Loan for New Business

Financing is an essential part of a business. A capital investment, no matter how big or small, is needed for financing a business. Only through a solid capital structure can your business guarantee you a constant inflow of cash. Large companies that are well-established use many modes of raising finances, such as IPO’s, institutional loans, etc.

What about the marginal up-and-coming businesses? How do they raise finances for themselves since small businesses have low credibility with banks? MSME loans. MSME stands for Micro, Small and Medium Enterprises. The MSME loan is available for small-scale businesses as institutional banks do not finance them due to collateral and other credibility factors.

Learn more about – What Are MSMEs? Its Definition, Benefits, Registration Process And Classifications Explained

Most small businesses do not possess the factors and requirements that make them eligible for an institutional loan. Before we get into what the MSME loan is and how you can avail of it, here’s a short overview of the small-scale enterprises’ field and how it differs from mainstream high capital companies.

What are Micro Small & Medium Enterprises?

Since we’re focusing on the MSME loan and not MSME itself, we’ll keep the briefing about small-scale industries short and concise. The primary difference between small and large-scale industries is the magnitude of investment made in both respective industries.

Key Government Schemes

The regulations set by the government limit the capital of small-scale industries. Small or micro-scale sectors are most commonly set up by private individuals with the help of family ties or more informal connections. This industry uses lesser capital, machinery, and workforce compared to large-scale industries, hence the more secondary capital.

The capital regulation for micro-businesses should not exceed more than one crore, and its turnover should not exceed more than five crores. For small-scale businesses, capital should not exceed more than ten crores, and turnover should not be more than fifty crores. Finally, it should not exceed more than 50 crores for medium enterprises, and the turnover shouldn’t exceed more than 250 crores.

Any business that exceeds these regulations no longer qualifies as an MSME and is termed a large-scale industry. Some key examples of companies in the small-scale industry are bakeries, Kirana stores (provision stores), stationery shops, etc.

About MSME Loan

The MSME loan is widely known around the country as the under 60 minutes loan, and it is true to its name. The MSME loan is a financial aid scheme introduced by the government in September of 2018. This loan actively helps in the growth of the country’s economy as it helps finance numerous small businesses.

You can avail of the MSME loan to get a capital of a maximum of 1 crore for your business. This entire procedure takes around a week or more but before a fortnight at least. With no need for collaterals and various pre-requisites for credibility, the loan gets sanctioned for you within 60 minutes.

The interest rates are directly proportional to the magnitude and nature of the work taken up by the entrepreneur. The MSME loan has a starting base interest rate of 8.5% and increases accordingly.

Getting Govt. Support by Your Side

Learn more about – Grab MSME Loan In 59 Minutes – The Detailed Guide To PSB Loan Benefits & How To Apply

How to Apply for MSME Loan for First-Timers/ New Businesses

If you’ve wanted to start a small-scale business by yourself with little to no idea of how to raise finances for it, we’ll walk you through the basics of MSME schemes and how to apply for each of them. Since banking has now been highly digitized, you can apply for the MSME loan online.

Eligibility details for the MSME loan

The application process for the MSME loan starts with checking your eligibility. You need to be a resident of India aged between 25 – 65, and you also need to have a running business of over three years with the filing of income taxes for at least a minimum of one year.

Eligibility details include basic identification details such as first name, last name, email id (optional) and phone number. Business-related information such as the nature of and type of business with expected returns over 12 months are specified. Based on this, you will be notified whether you are eligible for an MSME scheme or not.

Read more about – What is a Small Scale Enterprise? Its Types & Registration Process Explained

Online portal to apply on

First-timers should visit the Udyami Mitra website, which is an online portal for you to apply on. You can fill the online form on the online portal, provide the minimal but compulsory documents needed to avail of the loan. If you find it challenging to apply for the loan, various guidelines are available on the website, making it easier for you to work around.

Free Power Kit


Read more about – What Is Udyam Registration For MSME? Step-By-Step Process Of MSME Registration

Post application process

After you apply for the loan, your application goes through a screening process by professionals of the financing institution and accordingly either clear you or reject you. If you’ve been denied, you will have to review your application once more, or you might not have cleared the eligibility requirements. If you’ve been cleared for the loan, the process will take up to 8 – 12 days for the money to be deposited in your account.

Learn more about – Benefits Of MSME Registration In India

MSME Loan Schemes

The MSME loan has various schemes that you can avail of and benefit from. We’re stating the two primary MSME loan schemes for you and hence let’s take a look.

Learn more about – Top 4 Government Loan Schemes for MSMEs in India


Credit Guarantee Funds Trust for Micro and Small Enterprises was established in 2000 by the government as a trust fund that helps bring cash for micro and small businesses in the country. The CGTMSE is a crucial scheme to help raise finance for those with minimal to no experience in setting up businesses. This is a massive boost for those who want to set foot into the business world for the first time.

Learn more about – CGTMSE Loan for MSMEs: The Ultimate Guide Explaining What It Is, Features, Eligibility, & Procedure


Credit Linked Capital Subsidy Scheme or CLCSS is a government MSME subsidy scheme for those in the MSME sector. This is a highly beneficial scheme for those that have difficulties in availing quality machinery for their businesses.

This scheme was mainly aimed at improving the technological standards of the MSMEs by providing subsidies of over 15% on plant and machinery for investments reaching up to one crore. To avail of this scheme, you need to pass the eligibility criteria stated by the PLI (Production Linked Incentive).

Learn more about – What Is CLCSS Or Credit Linked Capital Subsidy Scheme? What are the Benefits of CLCSS for Technology Upgradation?


This article was a basic overview of the MSME loan, its two primary schemes, and how to avail each one. Although we’re sure it was helpful, for a more detailed and structured process of walking you through the application and availing of the loans, you can visit www.msmex.in/ask-experts to know more.


Related Read About –

We are a team of serial entrepreneurs, corporate professionals and business experts, at MSMEx.in

Succeed Online With Highly Effective Business Tips and Tricks

Do you want to scale your business even further than it is today? You are at the right place.

We provide Premium Online Learning for Small to Mid-Sized Businesses.

We are MSMEx, an experienced MSME edtech company with highly qualified staff to help companies grow in their industry and attract more visitors online. Whether you are struggling to gain a competitive edge online or are working on bringing your business online, we are here to assist you.

Learn powerful tips and tricks, customized especially for your business to suit its specific needs. All you need is to create a website to get started. We will help you and your employees learn everything about the internet and how things work to bring your business to the limelight.

How MSMEx Sessions Benefit Businesses?

The sessions of MSMEx are beneficial for businesses of all kinds and scales. We help them leverage the power of the world of the internet and also solve all their queries and doubts. You get expert help, if you are ever stuck with the scalability of your business.

You may be doing great online, but it's always better to learn more about things better. Learning experiences provided by us are enjoyable and beneficial at the same time. Grow your business and soar high without limits.

MSMEx will help you connect with your audience, understand their pain points, and earn more revenue than ever you have expected.

If something is working for your competitor, it doesn't need to work for you as well. You very well know that every business is different, and so are its needs. Hence, we work closely with our clients to know and understand their processes and custom-make solutions that work out for them.

Why Learn From MSMEx Experts?

The lessons we provide to businesses are curated to match their needs, preferences, and operations. With years of experience in creating industry experts, we take pride in the services offered. Learning is a never-ending process, and with the world of the internet evolving each passing day, there is an ocean full of things you need to learn.

Discover what you can do for your business by spending half of what you are doing now. Several companies have opted for the sessions provided by our experts, and they have unlocked more significant benefits that were beyond their imagination.

We teach several aspects of business operations and how a business can do a lot more than what it is doing today. We will help you craft the roadmap of your business' success.

Why is MSMEx Different?

We conduct live sessions for businesses to understand the course content in depth. We also allow them to connect with the lecturers in case of doubts. The pillars of our company conduct interactive sessions to give valuable insights.

We also have e-books for business leaders to unlock the full potential of the world of the internet.

Learn from a team of serial entrepreneurs, business experts, and corporate professionals who have made efforts in their journey to success. We teach business owners and other aspirants the tricks to be focused on growth to drive their business forward.