WHAT IS A SME Loan?

Small and medium enterprises are businesses defined by the Government of India based on their investments in plants, machinery, and equipment. The following table highlights the differences between the two types of businesses:

Investment/Turnover In SME:
Small enterprise:
  • Range of investment : Between Rs. 1 crore and Rs. 10 crore
  • Range of turnover : Between Rs. 5 crore and Rs. 50 crore.
  • Medium enterprise:
    • Range of investment : Between Rs. 10 crore and Rs. 20 crore
    • Range of turnover : Between Rs. 50 crore and Rs. 100 crore.
    Eligibility Criteria for SME:

    Following are the detailed SME loan eligibility:

    • Eligible entities: Self-employed individuals, self-employed professionals, business owners, SMEs, MSMEs, women entrepreneurs, Private/ Public Limited Companies, Partnership Firm, Sole Proprietorship, and Limited Liability Partnership that are engaged in trading, services & manufacturing sectors.
    • Minimum business vintage requirement to meet MSME loan criteria: 1 year.
    • Minimum business turnover requirement: Varies from bank to bank
    • Credit history: Good credit score and repayment history with financial stability
    • Any other personal needs/contingencies
    Documents Required for SME Loan:
    • Identity proof: Aadhaar card, passport, PAN card, Voter’s ID card, etc.
    • Residence proof:Rental agreement, utility bills, ration card, etc.
    • Business address proof:Lease agreement, utility bills, or rental agreement.
    • Income proof: P&L account & balance sheet of last 2 years, income tax returns, sales tax return, PAN card, project report, etc.
    • Proof of securities (if provided): Photocopies of title/ lease deeds offered as securities.