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May 16, 2020

Online process for MSME to apply Loan upto 5 Cr receive in-principal approval in 59 minutes

by Mahesh Mara in Compliance Law

Online step wise process for MSME to apply Loan upto 5 Cr and receive in-principal approval in 59 minutes

How to apply for MSME loan online?

MSME stands for Micro, Small and Medium Enterprise, they are the backbone of the Indian economy. MSME are also known as small scale industries. With around 63.4 million units throughout the geographical expanse of the country, MSMEs contribute around 6.11% of the manufacturing GDP and 24.63% of the GDP from service activities as well as 33.4% of India’s manufacturing output. They have been able to provide employment to around 120 million persons and contribute around 45% of the overall exports from India. The growth of the Indian economy depends upon this sector.

Micro, Small and Medium Enterprises (MSMEs) play an important role in the social and economic development of India. Access to timely and adequate finance is one of the crucial challenges faced by the sector. It is of paramount importance to cater to funding needs of this important segment of Indian economy along with simplifying decision-making process for a credit manager.

In a competitive world, running a successful business is not an easy task. We understand how important it is for a business to avail timely finance without undergoing tedious and long formalities. Applying for a business loan (term loan, working capital loan & mudra loan) should be a smooth, easy and fast process.

In the Digital Arena, we are offering MSMEs through this platform a great provision to fulfil their funding requirements by reducing turnaround time for receiving in-principle approval from days to just 59 minutes!

The ultimate benefit of the platform is that it reimagines and improves the overall process of fund raising. It digitizes and automates a very significant part of the process. Businesses demand not only convenience, but peace of mind and the platform offers both.

Definition of MSME:

Earlier the MSME was classified as Micro, Small and Medium depending upon the initial investment made in the business. The definition is different for service unit and Manufacturing unit under MSME. The MSME was defined as follows:

In case of business, a micro-unit with the investment of up to Rs 25 lakh, a small enterprise with investment between Rs 25 lakh and Rs 5 crore and a medium one with investment between Rs 5 crore and Rs 10 crore.

In case of services, the investment limit for micro was up to Rs 10 lakh, for small, the investment cap was Rs 10 lakh to Rs 2 crore and for medium, the limit was Rs 2 crore to Rs 5 crore.

New Definition of MSME

As per the new guide lines laid down by the Finance Minister on 13th May 2020, the definition of the MSME has been changed and an additional criterion of turnover has been introduced for the MSME. The new MSME definition is as follows:

  • A micro unit is one with investment up to Rs 1 crore and turnover less than Rs 5 crore,
  • The small unit has investment up to Rs 10 crore and turnover up to Rs 50 crore, and
  • The medium-firm will be one with an investment of up to Rs 20 crore and turnover under Rs 100 crore.

The new definition applies for both service and Manufacturing unit

Udyog Aadhaar Registration IS COMPULSORY to Apply Loans Online and help in geting credit

Step wise Process of Udyog Aadhaar Registration- Documents required and Benefits

In the recent years in order to boost the small scale business in the country the government of India has initiated the Udyog Aadhaar registration process. Previously, in case a person wants to start a business he/ she must get registered itself under both Small scale industry and MSME.

This process has now been made easy by introducing only two form under the Udyog Aadhaar registration which are Entrepreneur memorandum I and Entrepreneur memorandum II, whereas earlier one use to fill 11 different types of forms that were required earlier.

The following are the details required at the time of registration of Udyog Aadhaar:

  1. Twelve-digit Aadhaar number which is issued to the applicant. In case of firm, company or any other body corporate the Aadhaar number of Managing Director, Authorised partner etc. must be provided.
  2. Name of the of Entity under which it is conducting its business.
  3. Type of Business entity like Individual, firm, company etc.
  4. Postal Address of the business for communication purposes including contact numbers and email address.
  5. Date of commencement of business.
  6. Details of any previous MSME registration.
  7. Banking details of the of the company which includes Bank Account number and IFSC Code.
  8. Key areas of activity of the business –service or manufacturing.
  9. The number of employees in the business.
  10. Total amount investment in terms of machinery and equipment by the business.
  11. Social Category- The Applicant may select the Social Category (General, Scheduled Caste, Scheduled Tribe or Other Backward Castes (OBC). The proof of belonging to SC, ST or OBC may be asked by appropriate authority, if and when required
  12. Physically Handicapped- The Applicant can select Physically Handicapped status of Entrepreneur
  13. Location of Plant- The Applicant may add multiple plant location in one registration by clicking Add Plant button
  14. Major Activity- The major activity i.e. either “Manufacturing” or “Service” may be chosen by the enterprise for Udyog Aadhaar. If your enterprise involves in both type of activities and if major work involves in Manufacturing and small portion of activity involves in Service sector then select your major activity type as “Manufacturing” and if major work involves in Services and small portion of activity involves in Manufacturing then select your major activity type as “Services”
  15. National Industry Classification Code (NIC Code)- The Applicant may choose multiple National Industrial Classification-2008 (NIC) Codes to includes all their activities. Which means user can select multiple NIC code of Manufacturing and Service sector by clicking “Add More” button.If you want to add Manufacturing then select “Manufacturing” radiobutton and keep on adding by clicking “Add More” button otherwise if you want to add Service then select “Services” radio button and keep on adding by clicking “Add More” button. The NIC codes are prepared by the Central Statistical Organisation (CSO) under the Ministry of Statistics and Program implementation, Government of India.The Applicant may use National Industrial Classification-2008 (NIC) Codes searching facility to avoid 3 steps selection process.

Procedure for registration of Udyog Aadhaar:

Below is the procedure for Udyog Aadhaar registration:

  1. Go to https://udyogaadhaar.gov.in/UA/UAM_Registration.aspx
  2. 2. Enter Aadhaar number and Name of the person who is the representative of the firm and validate the Aadhaar number:
  3. 3. Enter OTP and Validate further.
  4. After validating it will redirect to Udyog Aadhaar form Enter the below details in the form.
    • Social Category (like : SC/ST/OBC/General.
    • Gender
    • Whether physically handicapped or not
    • Name of Enterprise
    • Type of Organisation
    • PAN no of the concern person
    • Address of the business entity
    • Communication address of the entity and Mail and Mobile number of the authorized person
    • Date of commencement of BusinessPrevious MSME registration details if any
    • Bank details of the enterprise like IFSC code and Bank Account number
    • Major activity of the unit (whether engaged in manufacturing or service)
    • National Industry Classification (NIC) Code for Activities (One or more activities can be added)
    • Total no of persons employed by the entity
    • Total initial investment by the entity
    • District where the entity is situated

Click on declaration check box and submit

5. After submission you will receive an OTP for submission of form- enter OTP and click on final submit

6. After submission it will redirect to Udyog Aadhaar memorandum page. Below the Udyog Aadhaar Memorandum you will find button for generating Udyog Aadhaar Certificate. Click on it and generate Udyog Aadhaar Certificate. After clicking on the generate Certificate button it will generate the Udyog Aadhaar Card

Benefits of registration in MSME Udyog Aadhaar:

The major benefits by registering under Udyog Aadhaar is summarized below:

  1. Easy Availability of Collateral Free loans from banks
  2. 50% subsidy for patent registration
  3. Simplification in getting Licenses, approvals and other registrations
  4. Reimbursement of ISO Certification
  5. Subsidy on NSIC Performance and Credit ratings:
  6. Concession in electricity bills and may more

Who can avail and Apply Online Loans and what amount?

Individuals/Proprietorship, Institutions, Incubation Centers, Companies, Firms, LLPs and any other legal entities

Business Loan In-principle approvals, with /without collateral, are currently provided for value from INR 1 Lac to INR 5 Crore. The Rate of Interest starts from 8.5% onwards. The Platform is integrated with CGTMSE to check eligibility of borrowers.Mudra Loan In-principle approvals are currently provided for value from INR 10,000 to INR 10 Lacs.

Personal Loan In-principle approvals are currently provided for value up to INR 20 Lacs, Home Loan In-principle approvals are currently provided for value up to INR 10 Crores and Auto Loan In-principle approvals are currently provided for value up to INR 1 Crore.

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Documents required to be kep ready in pdf form for MSME loan application online:

1. 6 months Bank statement in pdf

2. Business registration proof i.e. Incorporation certificate in case of company in pdf

3. Director/ Partner details

4. GST registration details in pdf

5. Profit and Loss and Balancesheet details for the last 3 years and estimated details for current year.

6. ITR in XML / Income tax returns in XML format. ITR related to Businesses and presumptive income scheme are eligible

Procedure to apply for MSME loan online:

The following is the step wise detail to apply for MSME loan online:

Step 1: Go to https://www.psbloansin59minutes.com/home and Click on “Apply Now”

Step 2: Sign up for the loan application by entering your Name, Mail Id and Mobile and click on Send OTP button. An OTP will be received on the mobile. Enter the OTP and click on Proceed button

You will be prompted to enter new password for Login. Enter the password and click on “Proceed”

Step 3: Submit your requirement

In the next step you will be asked to submit your requirement i.e. whether you want MSME loan or Business loan under Mudra Scheme.

Select “Business Loan” and Click on Proceed

Step 4: Filing of Loan application form:

The loan application is of 3 parts:

  1. Provide Your Data
  2. Select Banking Partner and
  3. Get approval

Let us start with filing your data, the first page will ask you the following questions:

  1. Are you registered under GST and am regular in filing my GST Returns?
  2. Are you having last 6 months Bank statement along with you?
  3. Have you filed Income tax returns?
  4. Are you regular in Loan Repayment and have not defaulted in the past?

Select, either yes or no appropriately and click on proceed button.

1. Now, enter your GSTIN details like GSTIN username and GSTIN no and click on send OTP button an OTP will be send to your registered mobile no. Before sending OTP ensure API access is enabled on your GST profile. Steps for enabling API is as follow:

a. Visit http://www.gst.gov.in, click on the “Login” button and Insert your credential to log in to your GST account.

b. After logging in, click on the “View Profile” link located on the right-hand side.

c. Under Quick Links, click on the “Manage API Access” link.

d. Click on the “Yes” button next to the “Enable API Request”, select “Duration” from the drop down provided and click on “Confirm” button

Now, Enter the OTP and Click on Submit button. You will be prompted to enter the sales details of GST from July 2017 to March 2020. Enter the details and Click on Submit button

2. Enter self declared Income and Financial data of the company like:

a. Name of the entity and Date of incorporation

b. Correspondence address of the company

c. Sales and Net profit of the company for last 3 years and estimated details for FY 2019-20

d. Also provides details of Total asset and Liabilities details for last 3 years and estimated details for FY 2019-20 and click on submit button

3. Now, upload the bank statement for last 6 months, select the Bank name from the drop down and from when the bank account is in operation i.e. select the month and year when the bank account was opened, now click on Upload bank statement button, select the path of the bank statement file.

Now, click on “Submit button”

4. Now, enter the company address and director details like:

a. Name of the Director

b. Address of the director

c. PAN and aadhaar of the director

d. Qualification of the director

After entering the director details click on “Submit’” button and Verify details

5. Now enter your loan requirement details. Before providing loan details confirm the details of the existing credit facility provided by the website. After confirmation click on “Submit” button, OTP will be sent to the registered mobile no. enter the OTP and click on Submit button.

6. Once, the submission is done you will be able to view all the lender proposals that have been matched with the application, which will show the EMI and processing fees of the various proposals. Select the proposal of your choice and select the branch of the bank.

Afterwards pay the processing fees of the bank. Once the fee payment is made you will receive the bank approval letter on the email.

Important Point to get approval for Loan

The ultimate benefit of the platform is that it reimagines and improves the overall process of fund raising. It digitizes and automates a very significant part of the process. Businesses demand not only convenience, but peace of mind and the platform offers both.

The user-friendly platform offers a simple loan application journey where an MSME borrower is not required to visit the bank branch for In-principle approval. The initiative automates various processes to Loan Appraisal in such a way that the borrower gets an In-principle approval in less than 59 minutes.

The platform also caters to financial requirement of businesses not-registered with gst. All the processes remain the same except gst details where the non-gst business needs to manually provide some business details

The Platform  Online PSB Loans Limited  has integration with various Fraud Check data points and it may act on its own or on behalf of SIDBI or any other Bank or Financial Institution for conducting necessary checks. You hereby provide your consent for conducting any such Fraud check necessary for processing the application on the Platform.

The company  Online PSB Loans Limited  maintains a data collection center for all Corporate/MSME/Retail Products proposals received under the categories of Fund Seekers and Fund Providers. The company shall match requirements of corporate/MSME/Retail Products proposals with parameters of various Fund Providers and once a particular Corporate/MSME/Retail Products proposal is matched the company shall electronically connect the relevant parties to each other and share information as available in the database.

As a facilitator, the company’s Platform shall purely facilitate lead generation as well as the collection, uploading and integration of information received from a Fund Seeker with the Fund Provider’s system in the manner, to the extent possible, as required by the Fund Provider. It is the obligation of the Fund Seeker to ensure that all information uploaded is true and correct and the company is at no stage required to check the veracity, accurateness or authenticity of any of the information/documents uploaded by the Fund Seeker.

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