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Various banking and non-banking financial institutions offer instant business loans. However, the amount of instant loans is usually lower. In such scenarios, what an MSME can do if it has an urgent requirement for a loan worth ₹1 crore? Let’s take a closer look at how to get a business loan worth ₹1 crore.
1 Crore business Loan: Obtaining loan without collateral
Apart from various banks, a few government schemes also offer a loan of up to ₹1 crore without any collateral.
Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE)
CGTMSE scheme also known as Credit Guarantee Scheme offers credit facilities of up to ₹5 crore. Some of the salient features of CGTMSE include:
- Loan amount of up to ₹5 crore
- No requirement for collateral or third-party guarantor
- Lower interest rate
Stand-Up India scheme
Stand-Up India scheme is specially designed for scheduled caste (SC)/scheduled tribe (ST) and women entrepreneurs.
- Loan amount between ₹10 lakh to ₹1 crore
- No requirement of any collateral or security
- Lower interest rate than the prevailing business loan interest rate
- GST business loan
Apart from the government schemes, you can also opt for a GST business loan. GST business loan is approved based on GST returns’ track record. Most banks offer GST loans of up to ₹1 crore depending on your eligibility and creditworthiness.
- Usually, it does not require any collateral
- Minimal documentation involved
- Quick disbursal
- No consideration of credit score
How to get ₹ 1crore business loan instantly?
Although there are various loan schemes available for startups, not all address the urgent funding needs. Realising the need for instant funding, the government of India has launched PSB loans in 59 minutes.
PSB loans in 59 minutes
PSB loans in 59 minutes is an initiative by the government of India. MSMEs now can get digital approval for a loan amount between ₹10 lakh to ₹5 crores. Key features of the PSB loans in 59 minutes are:
- Collateral is not required
- One portal many banks
- Minimal documentation
- The loan is sanctioned and disbursed under 7-10 working days
How to apply for a ₹1 business loan on PSB loans in 59 minutes?
- Visit the official website of PSB loans in 59 minutes for MSMEs.
- Click on Apply now.
- Register by filling in your name, email address and mobile number.
- Enter the OTP received on your mobile number.
- Next, enter your GST details and income tax details. You can also upload income tax statements.
- Upload your bank statements for the past six months.
- Enter details of directors/proprietors of the company.
- Select the purpose of the loan and previous loan history.
- Enter the amount required i.e. ₹1 crore and select the bank of your choice.
- Pay ₹1000 convenience fee, plus taxes for approval.
Bank of Baroda MSME loan
Bank of Baroda also has a wide range of loan schemes for MSMEs. The bank offers MSME loans through its digital lending initiative Dil Se Digital. The bank sends an in-principle approval for working capital loans of up to ₹5 crore in 30 minutes. Here are the key features of the Bank of Baroda MSME loan.
- In-principle approval in 30 minutes
- No requirement for physical documentation
- Hassle-free and convenient
Documents required for Bank of Baroda MSME loan (Digital lending)
- PAN and GSTIN
- Latest ITR
- 6 months bank statements
- Business or Udyam registration
- KYC details and documents
- Details on any ongoing loans
You can visit the Bank of Baroda’s website to apply for the MSME loan with quick approval.
Interest rates: 1 Crore business Loan
You need to keep the following things in mind about interest rates:
- The interest rate on any loan is determined by RBI guidelines.
- Government schemes generally attract lower interest rate. For example, interest rate for Stand-Up India scheme is usually fixed at the lending bank’s MCLR + 3% + tenor premium.
- The interest rate on GST loans is around 16%
Note: interest rates on any business loan fluctuate as per the RBI guidelines. It is best to get information from the lending institution.
Although the criteria for each loan scheme changes. However, some basic eligibility criteria for business loans are mentioned below:
- Age limit: Usually, the age of the applicant needs to be between 21-65 years.
- Business vintage: Usually business vintage of 2 years is required to be eligible for most business loans. However, government schemes usually do not require any business vintage.
- CIBIL score: Having a good CIBIL score of about 650 or more is mandatory for most business loan schemes. However, government loan schemes and a few other loan schemes such as GST loans are exceptions to this criterion.
- Business turnover: A few loan schemes require the minimum annual turnover of the business to be ₹40 lakh and above.
Note: It is best to understand the loan eligibility criteria from the respective bank for financial institution.
1 crore business loan: Things to keep in mind
- For obtaining a business loan worth ₹1 crore, many banks and financial institutions ask for collateral.
- It is best to maintain a higher CIBIL score for quick loan approval and disbursal.
- It is best to understand the eligibility criteria before applying for the loan. Otherwise, your loan may be rejected on account of not fulfilling the eligibility criteria.
- Understand the loan repayment terms and conditions. Loan rejections have adverse effect on your CIBIL score.
- While choosing a government scheme, compare all schemes and choose that one that suits your requirements the most.