A Brief Introduction to Different Types of MSME Loans Offered by Axis Bank

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Axis Bank MSME Loans

A brief introduction to different types of MSME loans from by Axis Bank

One of the popular private sector banks in India, Axis Bank was founded in 1993 as UTI Bank. The first branch was inaugurated in 1994 in Ahmedabad. It now has over 4,800 domestic branches and 9 international offices. Axis Bank offers a wide range of financial services and products to its retail and corporate customers.

It also caters to the small business sector and offers quite a few small business loans to its MSME customers.

Let’s summarise them for you below.

Working Capital Finance

Small businesses can go for the Axis Bank Working Capital Finance scheme to get funds in order to meet their financial needs for day-to-day operations. This is the perfect loan scheme for enterprises running seasonal businesses, waiting for payment from the client after project completion or reduced business activity. The loan amount sanctioned by the bank depends on the needs of the borrower.

Term Loan

MSME units that need financial assistance for business expansion and growth-related activities can opt for the Axis Bank MSME Term Loan. Eligible activities include acquisition of long-term assets like land/property, purchase of equipment / machinery and setting up of new office units. This is a need-based loan and businesses can get loan amounts based on their repayment capacity.

Industry-specific Loans

Axis Bank has a few loan schemes reserved for specific industry sectors. They are:

  • Trade Finance: Small businesses in the trading sector can avail of this loan scheme for business-related activities at any stage right from sourcing of raw material up to exporting of finished goods. Axis Bank extends this loan in local (i.e. Indian) as well as major foreign currencies
  • Supply Chain Finance: Axis Bank offers financial assistance to SME dealers and vendors in the supply chain to meet their working capital and capital expenditure needs. This is an umbrella loan scheme and the bank extends it as a term loan, overdraft facility, cash credit, bill discounting, bank guarantee, etc.
  • Construction Finance: Small businesses in the real estate sector can get funds for their projects at various stages of construction so that they can be completed on time. The creditworthiness of the borrower and the cash flow of the project determine the loan amount that can be sanctioned by Axis Bank

Asset-backed Loans

Many small businesses decide to apply for financial assistance by leveraging the power of property or other assets. Axis Bank offers three asset-backed loans to its MSME customers:

  • Loan Against Rent Receivables: This loan scheme offers financial assistance to small businesses against rental receipts of their rented property to meet their business needs. The maximum loan amount for this loan is Rs. 20 crore
  • MPower Loan Against Property: Small businesses can avail this loan scheme to raise capital towards expanding their business by pledging residential, commercial or industrial property as collateral. Axis Bank sanctions up to Rs. 5 crore under this scheme
  • Lease Rental Discounting: Axis Bank offers this loan scheme to help small businesses get funds for their business needs by pledging rental receipts from lease contracts with tenants to the banks as collateral. Borrowers can easily repay the loan through the Axis Bank Escrow Account

Special Loan Schemes for MSME Units

Axis Bank offers a few special loan schemes to micro enterprises. They are:

  • Zero Collateral Loan Under CGTMSE: Businesses in the Micro and Small Enterprises sector with a turnover of Rs. 250 crore or less can get a zero collateral loan, i.e. an unsecured loan from Axis Bank if they are covered under the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE). Axis Bank loans up to Rs. 1 crore under this scheme
  • Loan for Business Property: This special loan scheme helps small businesses get funds to acquire their first office space or to set up a new office space for business expansion. The maximum loan amount sanctioned by Axis Bank under this loan is Rs. 5 crore
  • Project Finance: Small businesses in the infrastructure business are eligible to get financial assistance for funding all types of projects. Axis Bank offers this loan for new projects as well for expansion, modernisation or diversification of existing infrastructure projects
  • Small Business Banking Loan: Small businesses that have a turnover of Rs. 15 crore can avail of this special loan scheme to meet their financial needs for running their business on a day-to-day basis as well as for business-growth related activities

A Final Word

So, now you know what Axis Bank offers in terms of loan schemes for small business owners. If you are interested to know more, please check out our MSME loans section to know more about MSME loans offered by other major Indian banks.

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