It is well proven that small as well as medium enterprises are considered critical components of any country’s social and economic development. Reports reveal that SME is the biggest employment provider after the agriculture sector. Note that SME is responsible for creating jobs and help to generate significant income for low-income groups. It helps to forecast social stability, economic growth, and also contributes to the development of the private sector.

SME loans are offered to the small and medium size organizations. So many banks around the world are ready to assist enterprises to get a considerable amount in terms of SME finance. If the loans are assigned under the SME category, the interest rates are applicable to Medium, Small and Microenterprises. Note that SME loan interest rates usually start at 12%/annum. It is better to check in with the bank for related terms and conditions before applying for such a loan.


Documents needed for SME loans:

·       Certificate of commencement for the business, certificate of incorporation, articles of association, certified copy of the memorandum of the business.

·       Last three years financial statement of the enterprise and related concerns.

·       List of present shareholders.

·       Wealth tax assessment, IT returns for the past three years.

·       Sales tax return along with assessment order for past three years.

·       A copy of passport, ration card, promotor’s voter ID, guarantors, and directors.

·       Photographs of guarantors, directors, and promoters.

·       Net worth statements of promotors, guarantors and directors along with their bio-data.

·       Title document of building and land where the unit is being operated.

·       Government order for converting the land into industrial land.

·       Building plan and land sitemap.

·       Estimate of the enterprise building prepared by the architecture.

·       Quotations for machinery and plant prepared by the suppliers.

·       Marketing write-

·       SSI registration certificate.

·       NOC issued by the pollution department.

·       Detailed project report and manufacturing process flow chart.

·       Agreement formed with technical consultants.

·       Lease and sale deed copy from collateral securities.

SME loans are also available for the financing of new businesses as well. Reports say that most small and medium scale enterprises fail just because they are not able to receive essential financial assistance on time. Few of them do not have the right machinery and equipment on time, so the industry is not able to function properly. If you are in need of an SME loan, it is better to consult a few financial institutions to check relevant terms and conditions first.