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Key Features of SME Loans

  • Loan Amount: Up to ₹5 crore based on business requirements.
  • Flexible Repayment: Loan tenure of 1 to 7 years.
  • Competitive Interest Rates: Starting from 8.50% p.a.
  • Quick Loan Processing: Approval within 24-72 hours.
  • Collateral-Free Options: Unsecured SME loans available.
  • Use for Multiple Purposes: Expand business, buy equipment, manage cash flow, etc.
  • Customizable EMI Options: Based on business revenue.
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Who Can Apply for a Self-Employed SME Loan?

  • Small Business Owners: To expand business operations.
  • Manufacturers & Traders: To purchase raw materials and increase production.
  • Retailers & Wholesalers: To stock up on inventory.
  • Service Providers: To upgrade office infrastructure and hire staff.
  • Startups & Entrepreneurs: To kickstart business ventures.

Eligibility Criteria for Self-Employed SME Loans

  • Age: 21 to 65 years.
  • Business Stability: Minimum 1 years of profitable operations.
  • Credit Score: 750+ preferred for better loan terms.
  • Annual Turnover: Minimum ₹10 lakh to ₹50 crore (varies by lender).
  • Business Vintage: Minimum 1-3 years for NBFC and bank approvals.
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Documents Required for an SME Loan

Applying for an SME loan is simple. You need:

  • KYC Documents: PAN Card, Aadhar Card, Passport, or Voter ID.
  • Business Proof: GST Registration, Trade License, or Business Incorporation Certificate.
  • Income Proof: Last 2-3 years’ ITR and Profit & Loss statements.
  • Bank Statements: Last 6-12 months to verify cash flow.
  • Collateral Documents (if applicable): Property or asset details for secured loans.

Why Choose Login to Loans for a Self-Employed SME Loan?

  • Customized Loan Solutions: Tailored financing options for SMEs.
  • Quick Approval & Disbursal: Funds transferred within 24-72 hours.
  • Low-Interest Rates: Competitive financing for small businesses.

How to Apply for an SME Loan?

  • Step 1: Check your loan eligibility online.
  • Step 2: Submit your documents for verification.
  • Step 3: Get loan approval and finalize the terms.
  • Step 4: Loan disbursal to your business account.

Frequently Asked Questions (FAQs) About SME Loans

What is an SME loan?
An SME loan is a type of financing provided to micro, small, and medium enterprises to support business operations, expansion, or working capital needs. These loans can be used for purchasing equipment, managing cash flow, paying salaries, or upgrading technology. They are offered by banks, non-banking financial companies (NBFCs), and government-backed schemes.
What qualifies as an SME/MSME?
In India, as per the Government of India Gazette Notification S.O. 2119(E) dated June 26, 2020, MSMEs are classified based on investment in plant and machinery/equipment and annual turnover:
Micro: Investment ≤ ₹1 crore, Turnover ≤ ₹5 crore.
Small: Investment ≤ ₹10 crore, Turnover ≤ ₹50 crore.
Medium: Investment ≤ ₹50 crore, Turnover ≤ ₹250 crore.
This definition applies to both manufacturing and service enterprises.
Who is eligible for an SME loan?
Eligibility varies by lender but generally includes:
Businesses registered as Sole Proprietorships, Partnership Firms, Private/Public Limited Companies, or LLPs.
Minimum age of applicant: 21 years; maximum age: 65 years.
Business operational for at least 1–3 years with a minimum turnover (e.g., ₹10 lakh/year) and stable financials.
Credit score of 750 or above and no prior loan defaults.
Specific schemes may prioritize women entrepreneurs, SC/ST/OBC categories, or first-time entrepreneurs.
What types of SME loans are available?
Common types include:
Term Loans: Fixed amount repaid over a set period for equipment or expansion.
Working Capital Loans: Short-term loans for daily operations or inventory.
Lines of Credit: Flexible borrowing up to a limit for ongoing needs.
Equipment Financing: Loans for purchasing machinery, with equipment as collateral.
Invoice Financing/Factoring: Immediate cash against unpaid invoices.
Government-Backed Loans: Schemes like PMMY (MUDRA), CGTMSE, or SMILE for collateral-free or subsidized loans.
Merchant Cash Advances: Lump sum repaid via future sales.
What are popular government schemes for SME loans in India?
Pradhan Mantri MUDRA Yojana (PMMY): Loans up to ₹10 lakh for non-corporate, non-farm micro/small enterprises.
Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE): Collateral-free loans up to ₹200 lakh with guarantee coverage of 50%–85%.
SIDBI Make in India Loan for Enterprises (SMILE): Soft or term loans for MSMEs in manufacturing/services.
Credit Linked Capital Subsidy Scheme (CLCSS): 15% subsidy on investments up to ₹1 crore for tech upgrades.
Stand-Up India: Loans of ₹10 lakh–₹1 crore for SC/ST and women entrepreneurs to set up greenfield businesses.
Are SME loans collateral-free?
Many SME loans, especially under schemes like CGTMSE or MUDRA, are collateral-free, meaning no assets need to be pledged. However, non-CGTMSE loans may require collateral or third-party guarantees, depending on the lender’s policy and loan amount.
What are the interest rates for SME loans?
Interest rates vary by lender, loan type, and borrower profile. Typically:
Government-backed loans (e.g., MUDRA, CGTMSE): 8%–12% p.a.
Bank/NBFC loans: 10%–20% p.a., based on creditworthiness.
Rates are often competitive for MSMEs, but collateral-free loans may have slightly higher rates to offset lender risk. Check with specific lenders like SBI, HDFC Bank, or NBFCs for exact rates.
What documents are required to apply for an SME loan?
Common documents include:
Identity Proof: Aadhaar, PAN, Voter ID, Passport, or Driving License.
Address Proof: Utility bills, rental agreement, or Aadhaar.
Business Proof: GST registration, Udyam Registration, or CAC certificate.
Financials: ITR, balance sheets, profit/loss statements (last 2–3 years).
Bank statements: Last 6–12 months.
Others: Loan application form and business plan (if required).
How can I apply for an SME loan?
Online: Visit the lender’s website (e.g., SBI, HDFC Bank, Bajaj Finance) or government portals like www.JanSamarth.in or www.psbloansin59minutes.com. Fill out the application, upload documents, and submit. Approval takes 59 minutes to 7–8 days.

Offline: Visit a bank/NBFC branch, request an application form, submit documents, and follow up with the loan officer. Some government schemes may require application through nodal banks (e.g., SIDBI, SBI).
How long does it take to get an SME loan approved?
Approval times vary:
Digital platforms: In-principle approval in 59 minutes; final disbursal in 7–8 working days.
Traditional methods: 1–4 weeks, depending on documentation and loan complexity.
Many MSME loans emphasize quick disbursal, especially with minimal documentation.
What are the repayment terms for SME loans?
Repayment tenures are flexible, typically ranging from 3 months to 7 years, depending on loan type and amount. Options include:
Monthly/quarterly EMIs for term loans.
Daily/weekly deductions for merchant cash advances.
Some schemes offer grace periods or waive prepayment penalties.
Can startups apply for SME loans?
Yes, startups can apply, especially under schemes like CGTMSE, PMMY, or Stand-Up India. However, lenders may require a business plan, proof of concept, or a minimum operational period (e.g., 1 year). New businesses may face stricter scrutiny due to limited credit history.
What are the challenges in accessing SME loans?
Common challenges include:
Limited collateral for traditional loans.
High perceived risk by lenders, especially for startups or micro-enterprises.
Complex documentation for non-digital applications.
Regional financing gaps: Globally, 40% of MSMEs face an unmet need of $5.2 trillion annually.
Government schemes and digital platforms aim to bridge these gaps.

List of SME Loans Banks in India