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Key Features of Andhra Bank SME/MSME Loans

  • Diverse Loan Schemes: Andhra Bank provides multiple schemes catering to different business needs, such as:
    • MSME - Mitra Loan: Short-term financing with one bullet payment in 8 months.
    • ABhivrudhi: Tailored for Micro and Small Enterprises (MSEs) to support growth and operational needs.
    • CGTMSE-Backed Loan: Collateral-free loans up to ₹1 crore with guarantee coverage.
    • Pradhan Mantri Mudra Yojana (PMMY): Loans up to ₹10 lakh for micro-enterprises.
    • Credit Linked Capital Subsidy Scheme (CLCSS): 15% subsidy for technology upgradation.
  • Purpose: Expansion of business or setting up new units. Purchase of production tools, machinery, or equipment. Meeting working capital requirements. Technology upgradation or modernization of existing units.
  • Categories: Loans were categorized for Manufacturing and Service Sectors, with investments primarily in plant, machinery, or equipment.
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    • Loan Amount: Maximum loan amount up to ₹5 crores for Medium Enterprises. For Micro Enterprises, financing up to ₹25 lakhs (manufacturing sector) or ₹10 lakhs (service sector).
    • Interest Rates: Competitive rates, often linked to government schemes like CGTMSE or priority sector lending. Specific rates vary based on the scheme and borrower's credit profile.
    • Loan Tenure: Flexible repayment schedules, ranging from short-term (e.g., 8 months for Mitra Loan) to longer terms (up to 7–10 years). Moratorium periods available (e.g., up to 7 years for principal repayment in certain schemes).
    • Security and Collateral: Collateral-Free Loans: Available for loans up to ₹1 crore under CGTMSE with guarantee coverage (85% for loans up to ₹5 lakhs, 75% for others). For loans not covered under CGTMSE, collateral or third-party guarantees may be required.
    • Repayment Options: Flexible repayment through Equated Monthly Installments (EMIs). Bullet payment option available for short-term loans like MSME - Mitra Loan. Annual renewal for working capital facilities.
    • Processing Fees and Charges: Nominal guarantee fee (1%–1.5%) and annual service fee (0.5%–0.75%) for CGTMSE-backed loans. Documentation charges and other fees vary by scheme and loan amount.
    • Eligibility Criteria: Age: Minimum 18 years at loan sanction. Business Continuity: Typically 1-2 years of operations for existing businesses. Entities: Individuals, proprietorships, partnerships, LLPs, private/public limited companies engaged in MSME activities. Credit Score: Preferably good credit history with no defaults.
    • Digital Application Process: Online application through bank's official website or via portals like www.psbloansin59minutes.com for quick digital approval. Minimal documentation for digital applications.
    • Government Support and Subsidies: CGTMSE Coverage: Collateral-free loans with guarantee cover. Credit Linked Capital Subsidy Scheme (CLCSS): 15% subsidy on investments up to ₹1 crore for technology upgradation. PMMY Scheme: Support for micro-enterprises under the Pradhan Mantri Mudra Yojana.
    • Additional Benefits: Support for women entrepreneurs and SC/ST borrowers. Priority sector lending benefits. Access to technology upgradation subsidies.
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Benefits of Andhra Bank SME Loans

  • Access to Capital for Growth: Enables businesses to fund expansion, purchase machinery, or upgrade technology, fostering growth and competitiveness. Supports working capital needs, ensuring smooth day-to-day operations.
  • Collateral-Free Financing: Loans under the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) scheme offer up to ₹1 crore without collateral. High guarantee coverage (up to 85% for loans up to ₹5 lakhs) minimizes lender risk.
  • Competitive Interest Rates: Priority sector lending and government-backed schemes ensure lower interest rates compared to unsecured business loans. Integration with schemes like Pradhan Mantri Mudra Yojana (PMMY) provides cost-effective financing.
    • Flexible Loan Amounts and Tenure: Loan amounts up to ₹5 crores cater to diverse needs. Flexible repayment schedules align with business cash flows.
    • Government Scheme Benefits: Access to subsidies like the Credit Linked Capital Subsidy Scheme (CLCSS), offering a 15% subsidy on investments. Interest subventions and excise exemptions reduce the overall cost of borrowing.
    • Quick and Simplified Application Process: Digital platforms enable loan approvals within 59 minutes. Online and branch-based application options with minimal documentation.
    • Support for Diverse Business Needs: Funds can be used for setting up new units, modernizing existing ones, or meeting short-term financial requirements.
    • Boost to Creditworthiness: Timely repayment builds a strong credit history, improving eligibility for future financing.
    • Encourages Innovation and Modernization: Loans facilitate investment in advanced technology and equipment.
    • Economic and Employment Impact: By supporting MSMEs, SME loans contribute to job creation and economic development.
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How to Apply for Andhra Bank SME Loans

  • 1. Determine Eligibility and Choose a Scheme
    • Eligibility Criteria: Individuals, proprietorships, partnerships, or companies involved in MSME activities. Minimum 1-2 years of business continuity for certain schemes. Age: 18+ years. No past defaults.
    • Select a Scheme: Choose from schemes such as:
      • MSME - Mitra Loan (short-term financing)
      • ABhivrudhi (for Micro and Small Enterprises)
      • CGTMSE-Backed Loan (collateral-free up to ₹1 crore)
      • Pradhan Mantri Mudra Yojana (PMMY) (up to ₹10 lakh)
      • Credit Linked Capital Subsidy Scheme (CLCSS)
  • 2. Gather Required Documents
    • Common Documents: Identity and address proof, business registration proof, financial statements, bank statements, project report (if applicable).
    • Digital Applications: Aadhaar-linked mobile number, PAN, GSTIN (if applicable), minimal paperwork.
  • 3. Choose Application Method
    • Online Application (Preferred):
      • Visit bank's official website
      • Navigate to "MSME Loans" section
      • Fill in the form and upload required documents
      • Submit application and note reference number
    • Offline Application:
      • Visit nearest Andhra Bank branch
      • Get the MSME loan form
      • Fill and attach all documents
      • Submit to branch officer
  • 4. Application Processing
    • Verification: Online or offline document and credit check
    • Assessment: Evaluation of business viability, repayment capacity, and collateral (if any)
    • Sanction Timelines:
      • Digital applications: Approval within 59 minutes via www.psbloansin59minutes.com
      • Offline applications: 1-4 weeks depending on loan size
  • 5. Loan Sanction and Disbursement
    • Sanction letter issued with loan terms
    • Complete documentation and security formalities
    • Collateral-free loans get CGTMSE coverage
    • Funds disbursed to bank account or to vendors directly

Eligibility Criteria for Andhra Bank SME Loans

  • 1. Business Classification
    • The business must qualify as a Micro, Small, or Medium Enterprise (MSME) per the MSMED Act, 2006:
    • Micro: Investment ≤ ₹1 crore, Turnover ≤ ₹5 crore.
    • Small: Investment ≤ ₹10 crore, Turnover ≤ ₹50 crore.
    • Medium: Investment ≤ ₹50 crore, Turnover ≤ ₹250 crore.
    • Udyam Registration is recommended to confirm MSME status.
  • 2. Business Type
    • Individuals, proprietorships, partnerships, LLPs, private/public limited companies engaged in MSME activities.
    • Excludes units replacing existing equipment/technology with the same type (ineligible for subsidies like CLCSS).
  • 3. Operational History
    • Existing businesses must typically have 1-2 years of operations.
    • New businesses may qualify under schemes like PMMY or CGTMSE with a viable business plan.
  • 4. Credit History
    • No history of default with any bank or financial institution.
    • Good credit score preferred.
  • 5. Purpose of Loan
    • Eligible purposes include working capital, capital expenditure, business expansion, or setting up new MSME units.
  • 6. Financial Stability
    • Ability to contribute margin (typically 20-25% of project cost).
    • Submission of financials (ITR, Balance Sheet, P&L) to demonstrate repayment capacity.
  • 7. Scheme-Specific Eligibility Criteria
    • MSME - Mitra Loan: Short-term financing needs.
    • ABhivrudhi: For Micro and Small Enterprises.
    • CGTMSE-Backed Loan: Collateral-free loans up to ₹1 crore.
    • PMMY: Non-corporate, non-farm micro/small enterprises.
    • CLCSS: MSMEs upgrading technology with approved equipment.
  • 8. Age of Business
    • Businesses that have been in operation for at least 1 year are eligible for most MSME loan schemes.
    • Startups and new businesses can be eligible for specific government-backed schemes (like PMMY).
  • 9. Loan Amount
    • Loan amounts vary depending on the scheme and business needs, ranging from ₹1 lakh to ₹50 crore or more.
    • Higher loan amounts may require additional documentation and guarantees.
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Documents Required for Andhra Bank SME Loans

  • 1. Identity Proof (Any one of the following):
    Aadhaar Card
    PAN Card
    Voter ID
    Passport
    Driving License
  • 2. Address Proof (Any one of the following):
    Aadhaar Card
    Utility bills (electricity, water, or telephone bill, not older than 3 months)
    Rent agreement (with utility bill in landlord's name)
    Passport
    Voter ID
  • 3. Business Proof (To establish MSME status and operations):
    Udyam Registration Certificate (recommended for MSME classification)
    Trade License or Shop & Establishment Certificate
    GST Registration Certificate (GSTIN, if applicable)
    Partnership Deed (for partnership firms)
    Certificate of Incorporation and Memorandum & Articles of Association (for companies)
  • 4. Financial Documents:
    Income Tax Returns (ITR) for the last 1-2 years
    Balance Sheet and Profit & Loss Statement for the last 1-2 years
    Bank Statements for the last 6-12 months (business account)
    Projected financials or business plan (for term loans or new ventures)
  • 5. Proof of Business Premises:
    Ownership documents (property deed) or lease/rent agreement
    Utility bill of the business premises (if applicable)
  • 6. Photographs:
    Recent passport-size photographs of the applicant(s) or authorized signatories

Factors Considered for Andhra Bank SME/MSME Loans

  • 1. Business Classification and MSME Status
    The business must qualify under MSMED Act, 2006, with limits on investment and turnover. Udyam Registration is preferred for eligibility.
  • 2. Credit History and Financial Discipline
    A clean credit record and strong financial discipline are important. Credit score helps, though not always mandatory for smaller loans.
  • 3. Business Viability and Continuity
    Typically, at least 1-2 years of stable business operations required; viable business plans essential for new ventures/startups.
  • 4. Loan Purpose and Utilization
    Loan must be for valid purposes like working capital, capital expenditure, or business expansion. Supported by clear documentation.
  • 5. Financial Contribution (Margin Money)
    Typically 20-25% of project cost. Lower margins may apply under subsidized schemes like CLCSS.
  • 6. Collateral and Security
    Loans up to ₹1 crore may be collateral-free under CGTMSE. For higher amounts, property or asset-based collateral may be needed.
  • 7. Applicant Profile
    Individuals/entities aged 18+ involved in eligible sectors.
  • 8. Documentation Quality
    Must include identity, business proof, financials, and scheme-specific documents. Incomplete documents delay processing.
  • 9. Repayment Capacity
    Assessed through cash flow analysis and existing liabilities. Strong income supports loan approval.
  • 10. Loan Amount and Scheme Fit
    Loan must align with scheme limits and business needs (e.g., PMMY up to ₹10L, CGTMSE up to ₹1 Cr).

Frequently Asked Questions (FAQs)

1. What are Andhra Bank SME loans, and who can apply?
Andhra Bank SME loans are financial products designed for micro, small, and medium enterprises (MSMEs) to meet working capital, expansion, or equipment purchase needs. Eligible applicants include sole proprietorships, partnerships, private/public limited companies, LLPs, and startups engaged in manufacturing, trading, or services, with a valid Udyam Registration Certificate.
2. What types of SME loans does Andhra Bank offer?
Andhra Bank offers:
MSME - Mitra Loan: Short-term financing with one bullet payment in 8 months.
ABhivrudhi: For Micro and Small Enterprises (MSEs) to support growth and operational needs.
CGTMSE-Backed Loan: Collateral-free loans up to ₹1 crore with guarantee coverage.
Pradhan Mantri Mudra Yojana (PMMY): Loans up to ₹10 lakh for micro-enterprises.
Credit Linked Capital Subsidy Scheme (CLCSS): 15% subsidy for technology upgradation.
3. What is the eligibility criteria for Andhra Bank SME loans?
Key criteria include:
Business registered as an MSME with Udyam Registration.
Minimum 1–2 years of operation (startups may qualify with a business plan).
Applicant age: 18+ years.
Good credit history, no defaults.
Stable revenue and financials (ITR, bank statements).
Scheme-specific criteria (e.g., micro-enterprises for PMMY).
4. What is the loan amount I can get?
Loan amounts vary:
PMMY: Up to ₹10 lakh (Shishu, Kishor, Tarun categories).
CGTMSE-Backed Loan: Up to ₹1 crore (collateral-free).
General SME loans: Up to ₹5 crores for Medium Enterprises.
Micro Enterprises: Up to ₹25 lakhs (manufacturing) or ₹10 lakhs (services).
5. Are collateral-free loans available?
Yes, collateral-free loans are available under:
CGTMSE: Up to ₹1 crore, with 75%-85% guarantee cover.
PMMY: Up to ₹10 lakh.
Secured loans require collateral like property or fixed deposits for higher amounts.
6. What are the interest rates for Andhra Bank SME loans?
Rates are competitive, linked to government schemes like CGTMSE or priority sector lending.
Specific rates vary based on the scheme and borrower's credit profile.
Check bank's website or branches for current rates.
7. What is the repayment tenure?
MSME - Mitra Loan: 8 months (bullet payment).
Working capital loans: 12 months (renewable).
Term loans: Up to 7–10 years.
Moratorium: Available for certain schemes (e.g., up to 7 years).
8. What documents are required to apply?
Common documents include:
KYC: PAN, Aadhaar, photographs.
Business Proof: Udyam Registration, GST certificate, partnership deed, or company MoA/AoA.
Financials: ITR (1–2 years), bank statements (6–12 months), balance sheet.
Loan-Specific: Quotations, project report, collateral documents (for secured loans).
Digital schemes: Require fewer documents.
9. How can I apply for an Andhra Bank SME loan?
Online:
- Visit bank's official website, select the loan, fill the form, upload documents, and submit.
Offline:
- Visit a bank branch, obtain the form, and submit with documents.
Alternative:
- Use PSB Loans in 59 Minutes portal for quick digital approval.

List of Andhra Bank SME Loans

  • MSME – Mitra Loan
  • ABhivrudhi
  • CGTMSE-Backed Loan
  • Credit Linked Capital Subsidy Scheme (CLCSS)
  • Pradhan Mantri MUDRA Yojana (PMMY)