Canara Bank SME Loan - Grow Your Business Now

Enter Pincode

Personal Details

Key Features of Canara Bank SME/MSME Loans

Diverse Loan Schemes: Canara Bank provides multiple schemes catering to different business needs, such as:
- Canara MSME Star: Comprehensive loan for term loans, working capital, and non-fund-based facilities up to ₹30 crore.
- Canara GST: Working capital loan for GST-registered businesses based on GST turnover.
- Pradhan Mantri Mudra Yojana (PMMY): Collateral-free loans up to ₹10 lakh for micro-enterprises.
- Canara MSE Vijeta: Special scheme for women entrepreneurs to purchase premises or equipment.
- Canara Caravan: For purchasing commercial vehicles like trucks and buses.
- Doctor's Choice: For medical practitioners to set up clinics, labs, or hospitals.
- Canara Start-Up: For new businesses with loans up to ₹2 crore for start-ups and ₹5 crore for early-stage units.
- Canara MSME Gold Loan: Loan against gold ornaments for MSMEs.

- Loan Amount: Minimum: ₹50,000 (e.g., Mudra Shishu loans).
  Maximum: Varies by scheme, up to ₹10 lakh for Mudra Yojana, ₹2 crore for start-ups, and ₹30 crore for established businesses under Canara MSME Star.
  Example: Canara GST offers loans based on turnover, while Canara Caravan provides financing for commercial vehicles.
- Interest Rates: Competitive rates starting from 9.20% onwards, linked to the Repo-Linked Lending Rate (RLLR).
  Rates vary based on:
  - Loan amount and tenure
  - Collateral coverage
  - CIBIL score (higher scores may secure lower rates; minimum 700 recommended)
  - Business stability, turnover, and profitability
  Specific examples:
  - Mudra Yojana: 10.5%-15.75%
  - Doctor's Choice: RLLR + margin
  - Canara GST: Based on GST turnover and business performance
  Concessions: 0.25% concession for CGTMSE accounts, 0.50% for women entrepreneurs.
- Loan Tenure: Working Capital Loans: Typically 1 year, renewable annually.
  Term Loans: Up to 7-10 years depending on the scheme.
  Mudra Loans: Up to 5 years repayment period.
  Construction-related loans may include moratorium periods during project execution.
- Security and Collateral: Collateral-Free Loans: Available for loans up to ₹10 lakh under CGTMSE (Credit Guarantee Fund Trust for Micro and Small Enterprises) coverage, extendable to ₹25 lakh for some schemes.
  Hypothecation: Assets purchased with the loan (e.g., equipment, vehicles) are hypothecated to the bank.
  Collateral for Higher Amounts: For loans above ₹10 lakh, collateral in the form of immovable property, gold ornaments, or financial securities may be required.
  Flexible Options: Properties owned by close relatives may be accepted if they act as guarantors.
  Specific Schemes:
  - Canara MSME Gold Loan: Gold ornaments as collateral
  - Mudra Yojana: No collateral required
  - Canara MSE Vijeta: Relaxed collateral norms for women entrepreneurs
- Repayment Options: Flexible repayment through Equated Monthly Installments (EMIs). Prepayment allowed with minimal charges. Moratorium periods available for term loans during project execution. Aligned with business cash flows for working capital loans.
- Processing Fees and Charges: Up to 1.5% of the loan amount plus taxes, varying by scheme. 25% reduction in processing fees for certain schemes. No processing fees for Mudra Shishu loans. Documentation charges and other fees vary by scheme and loan amount.
- Eligibility Criteria: Age: Minimum 21 years at loan sanction, maximum 65 years at loan maturity.
  Business Continuity: Minimum 3 years of business operations (relaxed for start-ups).
  Entities: Self-employed individuals, proprietors, partnership firms, private/public limited companies, LLPs, MSMEs.
  CIBIL Score: Preferably 700 or above for lower interest rates.
  Specific Requirements:
  - Doctor's Choice: MBBS/BDS qualification for medical practitioners.
  - Canara MSE Vijeta: Women-controlled MSMEs.
  - Canara GST: GST-registered MSMEs.
- Digital Application Process: Online application through Canara Bank's official website or platforms like PSB Loans in 59 Minutes for loans between ₹5 lakh and ₹1 crore.
  Mudra Portal: For Mudra loan applications. Minimal documentation for online applications, including business financials, identity/address proofs, and GST details.
- Government Support and Subsidies: CGTMSE Coverage: Collateral-free loans up to ₹10 lakh (extendable to ₹25 lakh).
  Credit Linked Capital Subsidy Scheme (CLCSS): 15% subsidy for technology upgrades up to ₹1 crore.
  PMEGP Scheme: Support for new enterprises under the Prime Minister's Employment Generation Programme.
  Standup India: For women and SC/ST entrepreneurs.
- Additional Benefits: Pre-Approved Loans: Available for existing customers with good track records.
  Flexibility: Combination of fund-based and non-fund-based facilities.
  Nationwide Access: Available across Canara Bank branches in India.
  Competitive Rates: Lower borrowing costs compared to many other lenders.
  Support for Women and SC/ST Entrepreneurs: Special schemes promote inclusivity.

Benefits of Canara Bank SME/MSME Loans

Access to Flexible Financing: Loans cater to diverse needs like working capital, equipment purchase, business expansion through schemes like Canara MSME Star, Canara GST, Mudra Yojana, and Canara Start-Up. Loan amounts range from ₹50,000 to ₹30 crore, ensuring flexibility for businesses of all sizes.
Collateral-Free Options: Loans up to ₹10 lakh (and up to ₹25 lakh for some schemes) are available without collateral under CGTMSE coverage. Schemes like Mudra Yojana and Canara Start-Up require no security, making them accessible to new or small-scale entrepreneurs.
Competitive Interest Rates: Rates start at 9.20% onwards, linked to RLLR, ensuring cost-effective borrowing. Concessions (e.g., 0.50% for women entrepreneurs) and lower rates for high CIBIL scores help reduce borrowing costs.

- Flexible Repayment Terms: Repayment tenures range up to 7-10 years for term loans, with options like EMIs aligned with business cash flows. Minimal prepayment charges.
- Support for Diverse Business Needs: Specialized schemes address specific sectors:
- Doctor's Choice: For medical practitioners to set up or expand practices.
- Canara MSE Vijeta: Empowers women entrepreneurs.
- Canara Caravan: Finances commercial vehicles.
- Canara Contractor: Supports construction businesses.
- Digital and Hassle-Free Application: Online platforms like PSB Loans in 59 Minutes enable quick, paperless applications with in-principle approval within 59 minutes.
- Government-Backed Support: CGTMSE coverage for collateral-free loans reduces risk. Subsidies under schemes like CLCSS (15% for technology upgrades) and PMEGP enhance affordability.
- Boosts Business Growth: Funds can be used for purchasing fixed assets, expanding operations, or meeting working capital needs, driving scalability and profitability.
- Inclusivity for Underserved Groups: Dedicated schemes for women (Canara MSE Vijeta), SC/ST entrepreneurs (Standup India), and medical professionals promote financial inclusion.
- Low Processing Costs: Processing fees up to 1.5% with concessions (25% reduction for some schemes). No fees for Mudra Shishu loans.
- Quick Disbursal: Digital loans ensure fast approval and disbursal, often within days. PSB Loans in 59 Minutes offers in-principle approval quickly.
- Customized Solutions: Tailored schemes like Canara MSME Gold Loan and Doctor's Choice address niche financing needs. Combination of fund-based and non-fund-based facilities for comprehensive support.

How to Apply for Canara Bank SME/MSME Loans

1. Online Application
- A. Through Canara Bank Official Website (www.canarabank.com):
  - Step 1: Visit the Website: Go to www.canarabank.com and navigate to the "Loans" or "MSME Banking" section.
  - Step 2: Select SME Loan Scheme: Choose the appropriate loan scheme (e.g., Canara MSME Star, Canara GST, Mudra Yojana, etc.) based on your business needs.
  - Step 3: Fill Application Form: Complete the online application form with details like personal information, business details, loan amount, and purpose.
  - Step 4: Upload Documents: Upload scanned copies of required documents (see list below).
  - Step 5: Submit Application: Review and submit the form. You'll receive an application reference number for tracking.
  - Step 6: Verification and Disbursal: Canara Bank will verify your application, conduct credit checks (e.g., CIBIL score), and contact you for additional details if needed. Upon approval, funds are disbursed to your Canara Bank account.
- B. Through PSB Loans in 59 Minutes Platform:
  - Visit www.psbloansin59minutes.com
  - Register and provide business details (GST, ITR, bank statements)
  - Select Canara Bank as the preferred lender
  - Get in-principle approval within 59 minutes (subject to verification)
- C. Through Government Portals (For Specific Schemes):
  - Mudra Portal: For Mudra Yojana loans
  - Standup India Portal: For women and SC/ST entrepreneurs
2. Offline Application (At Canara Bank Branch)
- Step 1: Visit Nearest Canara Bank Branch: Locate a branch using the branch locator on www.canarabank.com.
- Step 2: Request Application Form: Ask for the SME loan application form specific to your chosen scheme.
- Step 3: Fill and Submit Form: Complete the form with personal, business, and loan details. Attach physical copies of required documents.
- Step 4: Verification Process: The branch will verify documents, assess eligibility (e.g., CIBIL score, business stability), and may request additional information.
- Step 5: Loan Approval and Disbursal: Upon approval, sign the loan agreement, and funds will be credited to your Canara Bank account.

Eligibility Criteria for Canara Bank SME/MSME Loans

1. Applicant Type
- Individuals: Self-employed professionals or proprietors.
- Business Entities: Sole proprietorships, partnership firms, Limited Liability Partnerships (LLPs), private limited companies, or public limited companies (excluding NBFCs).
- Eligible Sectors: Businesses engaged in manufacturing, trading, services, or allied activities classified as MSMEs under the MSME Development Act, 2006.
2. Age
- Minimum: 21 years at the time of loan application.
- Maximum: Typically up to 65 years at the time of loan maturity.
3. Business Continuity
- Minimum 3 years of business operations or profitability, depending on the scheme.
- New businesses may qualify under specific schemes like Mudra Shishu or Canara Start-Up with a viable project report.
4. Credit Score
- A CIBIL score of 700 or above is preferred for competitive interest rates and faster approvals.
- Lower scores may be considered, but they could result in higher interest rates or additional scrutiny.
5. Bank Account
- Applicants must have or open a current/savings account with Canara Bank for loan disbursal and repayment purposes.
6. Business Registration
- Valid business registration proof, such as:
  - Udyam Registration Certificate (for MSME classification)
  - GST registration (mandatory for GST-based loans)
  - Shop and Establishment License, partnership deed, or incorporation certificate (for companies)
7. Financial Stability
- Demonstrable income and profitability through Income Tax Returns (ITR) for the last 3 years.
- Satisfactory bank statements (last 6-12 months) showing consistent transactions.
8. Collateral (If Applicable)
- For loans up to ₹10 lakh (or ₹25 lakh for some schemes), no collateral is required under CGTMSE coverage.

Documents Required for Canara Bank SME/MSME Loans

1. Identity Proof (Any one):
Aadhaar Card
PAN Card
Voter ID
Passport
Driving License
2. Address Proof (Any one):
Aadhaar Card
Utility Bills (electricity, water, or telephone bill, not older than 3 months)
Rental Agreement (registered)
Passport
Voter ID
3. Business Proof (Any one or more, as applicable):
Udyam Registration Certificate (for MSME classification)
GST Registration Certificate
Shop and Establishment License
Partnership Deed (for partnership firms)
Certificate of Incorporation and MoA (for companies)
Trade License issued by local authorities
4. Financial Documents:
Income Tax Returns (ITR) for the last 3 years (self and business)
Audited Balance Sheets and Profit & Loss Statements (3 years)
Bank Statements (last 6-12 months) of the business account
Projected financials or cash flow statements (for term loans)
5. Photographs:
2-3 recent passport-sized photographs of the applicant(s) or authorized signatory
6. Loan Application:
Duly filled and signed Canara Bank SME loan application form
7. PAN Card:
Individual PAN for proprietors/self-employed
Business PAN for partnerships, LLPs, or companies
8. Bank Account Details:
Proof of active Canara Bank current/savings account (passbook or statement)
Cancelled cheque of the Canara Bank account
9. Scheme-Specific Documents:
Mudra Yojana: Business plan/project report for Kishore and Tarun categories
Canara GST: GST returns for last 6-12 months

Factors Considered for Canara Bank SME/MSME Loans

1. Credit Score (CIBIL Score)
Importance: A CIBIL score of 700 or above is preferred for better interest rates and faster approvals.
Impact: Reflects the borrower's credit history, repayment track record, and outstanding debts.
2. Business Financials
Importance: Evaluated through ITRs (3 years), audited financials, and bank statements (6-12 months).
Impact: Strong revenue and profitability increase approval chances and may lower interest rates.
3. Business Continuity and Experience
Importance: Typically 3 years of profitable operations required (relaxed for startup-oriented schemes).
Impact: More established businesses are seen as less risky.
4. Loan Purpose and Viability
Importance: Loan must align with the scheme's objective.
Impact: Well-defined business plan improves chances of approval.
5. Collateral and Security
Importance: Loans up to ₹10 lakh may be collateral-free under CGTMSE. Higher loans need property/machinery as collateral.
Impact: Higher-value unencumbered collateral boosts eligibility.
6. Debt Service Coverage Ratio (DSCR)
Importance: DSCR = Net Operating Income / Total Debt Obligations. Canara Bank prefers 1.5+.
Impact: Indicates business's ability to meet EMI commitments.
7. Business Turnover and Scale
Importance: Turnover determines loan eligibility and MSME classification.
Impact: Higher turnover supports larger working capital limits.
8. Applicant Profile and Eligibility
Importance: Based on age, entity type, and scheme-specific requirements.
Impact: Determines basic eligibility and scheme fit.
9. Industry and Market Conditions
Importance: Assessed for sector stability and growth.
Impact: Favorable sectors may enjoy relaxed criteria.
10. Repayment Capacity
Importance: Based on profit margins, cash flows, and liabilities.
Impact: Strong capacity improves approval and reduces interest burden.

Frequently Asked Questions (FAQs)

1. What are Canara Bank SME/MSME loans?

These are financial products designed for Micro, Small, and Medium Enterprises (MSMEs) to meet working capital needs, purchase machinery, expand businesses, or address specific sector requirements (e.g., medical, exports). Schemes include Canara MSME Star, Canara GST, Mudra Yojana, and more.

2. Who is eligible for Canara Bank SME/MSME loans?

Eligible Entities:
- Individuals, proprietorships, partnership firms (except HUF partners), LLPs, private/public limited companies, and trusts engaged in MSME activities (excluding NBFCs).
Age: 21–65 years (at loan maturity).
Business Experience: Minimum 3 years (relaxed for start-ups or Mudra Shishu loans).
Registration: Udyam Registration Certificate is mandatory; GST registration for specific schemes.
Credit: Good CIBIL score (preferably 700+), no defaults.
Specific Schemes: Women entrepreneurs (Canara MSE Vijeta), medical practitioners (Doctor’s Choice), or SC/ST applicants (Standup India) have tailored eligibility.

3. What is the loan amount offered?

- Ranges from ₹50,000 (Mudra Shishu) to ₹30 crore (Canara MSME Star), depending on the scheme and business need.
- Examples:
- Mudra Yojana: Up to ₹10 lakh.
- Canara Start-Up: Up to ₹2 crore (start-ups), ₹5 crore (early-stage units).
- Canara GST: Based on GST turnover.

4. What are the interest rates for SME/MSME loans?

- Start at 9.20% p.a. (linked to Repo-Linked Lending Rate, RLLR).
- Vary by scheme, loan amount, collateral, and risk rating (e.g., 10.5%–15.75% for small loans).
Concessions: 0.50% for women entrepreneurs. 0.25% for CGTMSE-covered loans.
- Verify current rates on Canara Bank’s website.

5. Are collateral-free loans available?

Yes, loans up to ₹10 lakh (or ₹25 lakh for select schemes) are collateral-free under the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE).
Examples: Mudra Yojana, Canara MSME Star (up to ₹25 lakh).

6. What types of collateral are accepted for secured loans?

Immovable Property: Land, building, or commercial property (clear title, valuation required).
Gold Ornaments: For Canara MSME Gold Loan (valuation certificate needed).
Financial Securities: Bank deposits, LIC policies, or National Savings Certificates (NSC).
Flexible Options: Properties owned by close relatives (e.g., sister-in-law) may be accepted if they act as guarantors.

7. What documents are required to apply?

General Documents:
- Loan application form.
- KYC (PAN, Aadhaar, passport, etc.).
- Business proof (Udyam certificate, GST registration).
- Financials (ITR, balance sheet, bank statements for 3 years).
- Photographs.
Collateral Documents: Property papers, gold valuation certificate.
Scheme-Specific: GST returns for Canara GST, Medical degree for Doctor’s Choice, Business plan for Canara Start-Up.

8. How can I apply for an SME/MSME loan?

Online:
- Through Canara Bank’s website (select schemes).
- Via PSB Loans in 59 Minutes (for ₹5 lakh–₹1 crore, in-principle approval).
- Government portals (e.g., Mudra or Standup India).
Offline:
- Visit a Canara Bank branch, submit the application form and documents.
Process:
- Submit documents, undergo verification, and receive approval/disbursement (7–15 days post-verification).

9. What is the repayment tenure for SME/MSME loans?

- Up to 7–10 years for term loans, with moratorium periods (e.g., for construction loans).
- Mudra loans: Up to 5 years.
- Flexible repayment schedules aligned with business cash flows.

10. What are the processing fees?

- Up to 1.5% of the loan amount (varies by scheme).
- Concessions: 25% reduction for certain schemes; nil for Mudra Yojana.
- Confirm fees at the time of application.

List of Canara Bank SME Loans

Canara MSME Star
Canara GST
Canara MSE Vijeta

Doctor’s Choice
Canara Start-Up
Pradhan Mantri Mudra Yojana (PMMY)

Canara Contractor
Canara MSME Expo
Laghu Udyami Credit Card

Standup India
Canara MSME Gold Loan
Canara Caravan

Create Account

Sign In

Welcome Back!

Hello, Friend!

Reset Password

Reset Your Password

Change Password

Update Your Password

Logintoloans Assistant