MSME loan is a credit option for individuals, businesses, startups, and MSMEs (Micro Small and Medium Enterprises) for setting up a new business, meeting working capital and cash flow requirements, purchasing new equipment and machinery, paying salary of the staff, or for expansion purposes. Various banks and other lenders provide MSME business loans to their customers in India.
Following are the key MSME loan details:
| Loan Amount | Minimum Rs. 30,000 – Rs. 1 Crore |
| Rate of Interest | Based on the applicant’s profile & business requirements |
| Repayment Tenure | Maximum 15 years |
| Processing Fees | 0% – 3% of the loan amount |
| Collateral | Not required in case of unsecured business loan |
| Foreclosure Charges | 0% – 4% of principal outstanding |
| Subsidy | Offered by some lenders |
| Types | Working Capital Loan, Bill discounting, Overdraft, Cash Credit, Letter of Credit, Bill of Purchase, Merchant Cash Advance, etc. |
MSME loan interest rates vary from one lender to another. For example, SBI SME loan interest rate starts from as low as 8.80% p.a. whereas HDFC MSME business loan interest rate starts from 11.90% p.a. Various factors are considered by lenders when deciding the interest rate on MSME Loan, including the applicant’s profile, credit score, age, income, turnover, business reputation, experience, and so on.
If borrowers have a good credit score, they can get low MSME interest rates. A credit score is a three digit number generated by credit bureaus that summarize an individual’s credit repayment history. A credit score above 750 is usually considered good for MSME Loans, but that doesn’t mean you cannot get an MSME Loan with a lower credit score. You can still apply for a loan from some lenders even if your CIBIL score is 650 or above.
To get instant approval and an attractive interest rate deal on the MSME loan scheme, maintaining a good credit score is always helpful.
| Lender Name | Rate of Interest |
| Axis Bank | 15% onwards |
| Fullerton Finance | 11.99% onwards |
| HDB Financial Services Ltd. | 22% onwards |
| HDFC Bank | 11.90% onwards |
| Hero Fincorp | 18% onwards |
| ICICI Bank | 10% onwards |
| IDFC First Bank | 20% onwards |
| IIFL Finance | 18% onwards |
| Kotak Mahindra Bank | 14% onwards |
| Lendingkart Finance | 15% onwards |
| NeoGrowth Finance | 18% onwards |
| PNB Business Loan | Based on your Business’s Profile |
| SBI | 8.80% onwards (SME Loan) |
| RBL Bank | 19% onwards |
| Tata Capital Finance | 18% onwards |
| ZipLoan | 18% onwards |
Note: You can avail SBI Business Loan with Mymoneymantra.
The interest rates for Bank of Baroda business loans are linked to the bank’s 1-year Marginal Cost of Funds based Lending Rate (MCLR) or Baroda Repo Linked Lending Rate (BRLLR) or Base Rate (BR), which are as follows:
Bank of Baroda interest rate on Business Loans depends on various factors:
Additional Info: Also, check PSB Loans in 59 Minutes is a quick business loan portal for start ups.
Following are the detailed MSME loan eligibility:
Many NBFCs (Non-Banking Financial Companies) in India offer MSME loan for startup business and to other customers at attractive interest rates. Following are some of examples:
| Lender Name | Interest Rate (p.a.) | Loan Amount | Tenure | Processing Fee |
| Fullerton India | 11.99% – 21% | Up to Rs. 50 Lakhs | 12 months – 60 months | Up to 3% of loan amount |
| LendingKart | 15% – 27% | Rs. 50,000 – Rs. 2 Crores | 1 month – 36 months | 2% – 3% of loan amount |
| Mahindra Finance | 14% onwards | Up to Rs. 40 Crores | 6 months – 7 years | Case to case basis |
| Muthoot Fincorp | 12% – 24% | Rs. 15,000 – Rs. 8 Lakhs | 6 months – 36 months | 2% of loan amount + GST |
Listed below are some of the most popular banks in India which offer MSME loans:
| Lender Name | Interest Rate (p.a.) | Loan Amount | Tenure | Processing Fee |
| SBI | 8.80% – 15.35% | Rs. 1 Lakh – Rs. 500 Crores | Up to 15 years | Up to 1% of loan amount |
| HDFC Bank | 11.90% – 21.35% | Up to Rs. 50 Lakhs | 12 months – 48 months | Up to 2.50% of loan amount |
| ICICI Bank | 10% p.a. onwards | Up to Rs. 2 Crores | Up to 7 years | Up to 2% of loan amount + taxes |
| Axis Bank | 15% onwards | Rs. 10 Lakhs – Rs. 20 Crores | Up to 10 years | Up to 2% of loan amount |
| Kotak Mahindra Bank | 14% onwards | Rs. 3 Lakhs – Rs. 75 Lakhs | Up to 48 months | Up to 2% of loan amount + taxes |
Note: Apply for HDFC Bank Business Loan with fastmudra.
Calculating MSME Loan EMI is easy and instant with our Business Loan EMI Calculator. All you need to do is follow the steps mentioned below:
