MSME Loan Scheme 2026 is a powerful initiative by the Government of India to support small businesses, startups, and entrepreneurs. Under this scheme, eligible applicants can get government-backed loans at low interest rates to start, expand, or modernize their business.
The MSME Loan Scheme 2026 is designed to provide financial assistance to Micro, Small, and Medium Enterprises (MSMEs). These loans are offered through banks, NBFCs, and government financial institutions under schemes like:
1. Working Capital Loans
2. Term Loans for MSMEs
3. MSME Government Loan Schemes (2026)
To apply for an MSME business loan, you must meet the following conditions:
You can use the loan amount for:
Follow these steps to apply online:
Q1. What is MSME Loan Scheme 2026?
What is MSME Loan Scheme 2026?
- Mudra Yojana
- Credit Guarantee Fund Scheme (CGTMSE)
- Stand-Up India
- PM Employment Generation Programme (PMEGP)
- Minimum Loan: ₹50,000
- Maximum Loan: ₹10 Crore (scheme & bank dependent)
- Small businesses: ₹5 – 10 Lakh
- Medium businesses: ₹10 Lakh – ₹1 Crore
- Low interest government-backed loans
- No collateral required (up to certain limits)
- Easy online application process
- Faster approval for registered MSMEs
- Credit guarantee support by government
- Suitable for startups & existing businesses
Types of MSME Loans (Complete Guide – 2026)
There are different types of MSME loans available in India to meet the diverse financial needs of small businesses, startups, and entrepreneurs. These loans are offered by banks, NBFCs, and government institutions and are designed for working capital, expansion, machinery purchase, and long-term growth.1. Working Capital Loans
- Working capital loans are short-term MSME loans that help businesses manage their day-to-day operational expenses.
- Paying salaries and wages
- Managing inventory
- Paying rent, utility bills, and suppliers
- Meeting short-term cash flow needs
- Short repayment tenure
- Quick approva
- Offered by banks & NBFCs
2. Term Loans for MSMEs
- Term loans are long-term MSME loans used for capital investment and business expansion.
- Business expansion
- Purchase of plant & machinery
- Capital expenditure
- Buying fixed assets
- Medium to long repayment tenure
- Fixed or floating interest rates
- Available as short-term and long-term loans
3. MSME Government Loan Schemes (2026)
- The Government of India offers several MSME loan schemes to support small businesses with low interest rates, subsidies, and credit guarantees.
- The Pradhan Mantri Mudra Yojana (PMMY) provides MUDRA loans up to ₹20 lakh to non-corporate, non-farm micro and small enterprises.
- Commercial Banks
- Small Finance Banks
- MFIs and NBFCs
- Online via JanSamarth Portal
- Shishu: Up to ₹50,000
- Kishore: ₹50,001 to ₹5 lakh
- Tarun: ₹5 lakh to ₹10 lak
- Tarun Plus: ₹10 lakh to ₹20 lakh
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Interest Rate
- Interest Rate: 7% – 12% per annum
- Lower than private business loans
- Subsidy available under selected schemes
- Applicant must be an Indian citizen
- Business should be Micro, Small, or Medium Enterprise
- Business must be Udyam registered
- Age between 18 to 65 years
- Business should not be a bank defaulter
- New & existing businesses both eligible
- Small shop owners
- Manufacturers
- Traders & wholesalers
- Service providers
- Startups & entrepreneurs
- Women entrepreneurs
- Rural & urban business owners
- Documents Required for MSME Loan (2026)
To apply under any MSME Loan Scheme 2026, applicants must submit valid documents to establish their identity, business legitimacy, financial credibility, and repayment capacity. The exact documents may vary by lender, but the following are commonly required for MSME business loans in India.
- Aadhaar Card
- PAN Card
- Voter ID Card
- Passport
- Driving Licence of the business owner / partners / directors
- Latest utility bills (electricity, water, gas)
- Rental or lease agreement
- Property ownership documents
- Passport showing current business or residential address
- GST Registration Certificate
- Udyam Registration (Udyog Aadhaar)
- Partnership Deed (for partnership firms)
- Memorandum of Association (MOA
- Articles of Association (AOA)
- Shop & Establishment Act Licence
- Bank account statements (last 6–12 months)
- Income Tax Returns (ITR)
- Audited Balance Sheet
- Profit & Loss Statement
- Business expansion plan
- Purchase of machinery or equipment
- Working capital requirements
- Cash flow and repayment plan
- Recent passport-size photographs of the applicant
- Photographs of partners or directors (if applicable)
Uses of MSME Loan
- Starting a new business
- Business expansion
- Purchase of machinery & equipment
- Working capital requirements
- Shop renovation
- Technology upgrade
- Promoting entrepreneurship
- Creating employment opportunities
- Supporting startups & small industries
- Strengthening India’s economy
- Financial inclusion of small businesses
MSME Loan Interest Rate 2026 (Latest Bank & NBFC Rates)
The MSME loan interest rate in 2026 depends on several factors such as loan amount, repayment tenure, type of business, credit score (CIBIL), financial stability, and repayment capacity. Both banks and NBFCs offer MSME loans at different interest rates based on risk assessment.- State Bank of India (SBI): 8.00% onwards
- Canara Bank : 9.20% onwards
- Punjab National Bank (PNB) : 9.60% onwards
- Indian Bank : 8.80% onwards
- Union Bank of India : 10.95% onwards
- Mahindra Finance : 7.20% onwards
- Fullerton India : 17% onwards
- Muthoot Fincorp : 18% onwards
- Lendingkart : 1.25% per month onwards
How to Apply Online for MSME Loan Scheme 2026
- Visit the official MSME loan portal or bank website
- Choose MSME Loan / Government Business Loan
- Fill in the online application form
- Upload required document
- Submit the application
- Bank verification & approval process
- Loan amount credited to bank account
Q1. What is MSME Loan Scheme 2026?
- The MSME Loan Scheme 2026 is a government-backed financing facility that provides low-interest business loans to Micro, Small, and Medium Enterprises for working capital, expansion, machinery purchase, and business growth.
- Any Indian citizen running a micro, small, or medium enterprise with Udyam Registration can apply. Startups, women entrepreneurs, traders, manufacturers, and service providers are eligible.
- The loan amount depends on the scheme and lender:
- Small loans: ₹50,000 to ₹10 lakh
- Medium loans: ₹10 lakh to ₹5 crore
- SIDBI loans: Up to ₹50 crore
- MSME loan interest rates generally range between 7% to 12% per annum for banks. NBFCs may charge higher rates depending on risk, credit score, and loan tenure.
- No, many MSME loans are collateral-free, especially under schemes like Mudra Yojana and CGTMSE. However, higher loan amounts may require security.
- Yes. Startups and new businesses can apply under schemes such as:
- Mudra Loan
- PMEGP
- MSME Loan in 59 Minutes
- Startup India-linked MSME loans
- You can apply online through:
- Bank or NBFC official websites
- JanSamarth Portal (for government schemes)
- PSB Loans in 59 Minutes portal
- Yes, Udyam Registration is mandatory for most government MSME loan schemes and helps in getting lower interest rates and faster approval.
- Online portals: 59 minutes to 3 days (in-principle approval)
- Banks: 7–15 working days (after document verification)
- MSME loans can be used for:
- Working capital needs
- Business expansion
- Machinery & equipment purchase
- Shop renovation
- Technology upgrade
- Inventory purchase
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