Affordable Finance
Enabled Quickly!


MSME loans are instalment loans given for manufacturing activities and service enterprises in the MSME segment, as per the MSME definition in the MSMED Act.

Lulu Finserv would assess the credit worthiness of the applicant, approve, and disburse the Unsecured loan or mark a hypothecation lien on the stocks, receivables, assets as security. Collateral of property will be insisted based on the product norms.

This product document describes the credit parameters and operating aspects for MSME Loans (Secured and Unsecured), ensuring Know Your Customer (KYC) Standards and the process of valuation, field investigation etc.

Enquire Now
  • Personal loan – EMI
  • Pre-approved Personal Loans-Offered to existing Gold Loan customers
  • PL-Balance Transfer
  • PL-Top up loans
Get to know more about

    MSME Loan EMI Calculator

    0 Lac 10 Lac
    1% 30%
    1 Month 180 Months
    EMI Details

    Monthly EMI

    Principal Amount

    Interest Amount

    Total Amount Payable

    Target Segment

    The target customers will be business enterprises belonging to the priority sector engaged in manufacturing, trading and services, under the following segments.

    Those who intend to renovate, expand existing business, and add stock. Those who are generating income with the help of newly purchased assets, etc.

    • Partnership firms
    • Private & public limited companies
    • Entities considered safe & credit worthy.
    • Trusts and Societies

    How To Apply

    Submit Aadhar Card / PAN Card

    We will check your Cibil Score

    Submit Income Proof

    We will check your eligibility based on Income / Cibil Score

    Receive Money

    Receive your money in 1-2 business
    days after verification


    Factors That Affect MSME Loan Eligibility

    Nationality icon

    Individuals / self-employed professionals [Firms / Companies or any other legal entity] engaged in manufacturing / service trading are eligible to be financed under the scheme.

    Scheme icon

    New or existing units can be considered under the scheme.

    Net worth icon
    Net worth

    Net worth of the borrower/s shall be positive.

    Take over loan icon
    Take over loan

    Take over loans are permitted under the scheme. While considering take over loans/ utmost care shall be taken to assess the viability / past performance of the business unit.

    Borrowers icon

    Borrowers enjoying credit facilities with other banks / FIs can also be covered under the scheme. However, it shall be ensured that the same asset is not already financed.

    GST returns icon
    GST returns

    Businesses filing GST returns shall be most preferred.

    Applicant age icon
    Applicant age

    Individuals- Minimum Age 24. Maximum Age at the end of loan tenor shall not exceed 70 Years.

    Others icon

    Minimum 2-year Business vintage.

    Turnover and profit icon
    Turnover and profit

    Turnover and profit should have a positive trend for the past two years.

    Specific exclusions icon
    Specific exclusions

    Self-employed-Minimum 2-year vintage.


    The repayment shall be in equated periodical instalments (weekly/Monthly/Quarterly)

    Repayment Capacity
    FOIR shall not exceed 60%.
    Or DSCR shall be minimum 1.25%

    Autopay icon

    Can make use of internet banking to set up autopay for your EMI payments.

    Standing Instructions icon
    Standing Instructions

    Can set up standing instructions using NACH mandate.

    Draft / Cheque icon
    Draft / Cheque

    EMI payments can also be made via drafts or post-dated cheque.

    Online Transfer icon
    Online Transfer

    EMI payments can also be made online using NEFT, RTGS, IMPS payments.

    Loan Amount

    Rs. 20000/-


    to be decided periodically

    Loan Tenor

    6 months


    60 Months


    It is the ratio of maximum amount of loan to the value / cost of product / Asset to be purchased (Applicable in case of Equipment / Asset Purchase) at a maximum of 90% depending upon asset category and up to 75% depending on mortgaged property.

    1. Business Loan-Secured- (For the purpose of asset purchase / stock additions / business renovation)- Hypothecation in favour of LFS to be endorsed.
    2. In case of loans with collateral: EM should be created in favour of LFS (LTV derived based on the valuation by the authorised external valuation expert on land and buildings provided by the applicant.)
    3. Business Loan-Unsecured-No Hypothecation
    Co-Applicant / Guarantor
    1. Co-applicant mandatory for all types of business loans in the name of individuals and sole proprietorship concerns. Spouse / Family Member can be a co-applicant / guarantor.
    2. Personal guarantee of all partners in partnership firms and major Directors in the case of companies.
    3. Owner of property shall invariably join as co-applicant.
    4. Deviation authority – Head-Credit &Risk
    Rate of Interest

    To be decided by the Committee
    Interest type: Fixed

    Processing Fee

    4% + GST (Minimum Rs. 400/-)

    Other Charges
    1. Late Payment fee: 2% month (24% per annum) for the defaulted amount for the defaulted period.
    2. Pre-closure charges: 5% of principal outstanding
    3. Prepayment charge- 5% of amount prepaid.
    4. Penalty for cheque / NACH bounce: Rs. 500+ GST
    5. Change of Bank Account: Rs. 500 + GST

    Disbursement to the Customer bank account given at the time of application or direct payment to the supplier.

    1. Credit shield insurance to be taken in the name of the Applicant.
    2. Assets created out of the finance to be insured with Bank clause
    Credit Bureau
    1. Credit bureau checking is a must for all parties to the contract even if additional party is included.
    2. Minimum Cibil score should be 650 and above. Anything below this-deviation authority is Credit & Risk Head.
    3. Never 60+ DPD in loans and 90+ DPD in credit cards
    4. Not more than one 30+ DPD in last 12 months
    5. No written off & Suit filed cases
    6. Commercial Cibil to be checked for all entities.
    7. CRIF Highmark Score to be checked in appropriate cases.
    Tele Verification
    1. TVR is a must for all cases and should be satisfactory and positive
    2. TVR to be done by Branch Head / Designated Employee.
    3. IF Negative case will not be considered
    Field Investigation
    1. Field verification should be done by designated verifying officers
    2. Selfie photo of residence is a must along with another residence photo.
    3. Selfie photo Shop / Business Establishment along with another 8 photos showing all sides of the Shop / Business establishment. Nearest shops, Landmarks (Banks / Temple / Govt Offices / Schools)- Not applicable for Individuals who purchase Equipment / Machines.
    4. Residence Field verification is mandatory for all cases of applications.
    5. Field Investigation must be done for all cases.


    1. The Field Investigation report is to be prepared by designated verifying officers / Branch Heads
    2. FI Report should contain details of applicant, co applicant and guarantor if any and report should be properly scrutinised by verifying officers with regard to residence, income source and their stability and also living standard of the customer
    3. A field investigation report should contain all details about the applicant, co-applicant, source of income also that of the guarantor if any
    4. If at any point of time guarantor is not a blood relation and staying separately from applicant residence, in such cases residence verification should be done of guarantor’s house as well.
    5. A selfie photo of residence or office with additional photo should be taken along with other photos of Shop / Business establishment.
    Residence stability
    1. Minimum 6 Month in case of owned House-Deviation – Credit & Risk Head
    2. Minimum 12 months stability in case of rented house – Deviation Credit & Risk Head
    3. If current residence is owned-No minimum stability norm
    4. LTR is mandatory for all cases (self-owned, parental, spouse owned, Co applicant / Guarantor owned.) Any deviation require approval from Credit & Risk Head
    GST Conduct & Account conduct
    1. 6 months Bank statement to be verified
    2. Not more than 3 cheque returns during 6 months
    3. Minimum revenue as per GST should be Rs. 25 L in 12 months
    Documentation Norms

    Application Form

    1. Loan Application form / CKYC Application form duly filled in with all details, photograph and signature separately for Applicant, Co-applicant & Guarantor(s) (To be verified and signed by the Branch Manager / Branch In-charge).
    2. Mother’s name of Applicant, Co-Applicant and Guarantor(s) must be mentioned in respective Loan Applications without fail.
    3. Separate Mobile number in the name of Applicant, CoApplicant and Guarantor/s should be mentioned in the Application Form.

    The following are the list of documents that should be collected prior to login

    1. KYC documents
    2. Application form
    3. FI verification report including Valuation report by verifying officers
    4. Financials, ITR, GST Payslips, Bank statement etc, Latest LTR
    5. 6 months latest banking transactions
    6. Property documents copy (in case of mortgage loan)


    Duly filled and signed Agreement Kit.

    Property Document (For Mortgagebacked loans)

    1. Title deed
    2. Prior deed
    3. Latest land tax receipt
    4. Encumbrance certificate
    5. Possession certificate
    6. Location sketch.

    Mortgage of property

    The loan approved against the collateral security of any Mortgage asset provided by the borrower, the same must be clearly mentioned in the CAM by the approval authority. The following data should capture in the CAM

    1. Area (In ARE) of the property
    2. Location of the property
    3. Valuation done by the authorised person.
    4. Legal verification of all mandatory documents.

    The Creation of Mortgage follows the steps mentioned below from the login of documents for appraisal to Disbursement of loan amount.

    1. Financial approval (The approving authority’s approval on the basis of assessing the documents provided for checking the applicant’s repayment capacity)
    2. Verification of Documents (if the applicant gets the financial approval, The documents should be submitted to the Legal Advisor for taking the Legal report)
    3. Valuation Report.
    4. Mortgage creation (The mortgage should be created before disbursement and the documents should be collected prior to disbursement)

    EMI Cheques / NACH

    1. Completed and signed EMI Cheques (3-5 Nos)
    2. NACH mandate – (2 Nos) including one Security NACH mandate.
    3. EMI cheques can be excluded if the mandate registered by using Debit card / Net banking.

    For the operational convenience Repayment / Collection dates are specified and pre-fixed.

    1. The Applicant / Borrower has the liberty to choose any one of the convenient date as Repayment / Collection due date.
    2. The repayment due date once opted cannot be altered as it would upset the entire accounting system.
    3. Branch / Field Staff sourcing business should first obtain the choice of the borrower and then fix the Periodical instalment due date.
    4. The Borrower, Co-borrower & Guarantor(s) should be clearly told about the first Periodical instalment due date fixed for arranging funds accordingly.
    5. For the number of days in excess of 30 days, broken period interest shall be recovered along with the first instalment.

    Photograph & KYC Documents

    1. Photograph on the Application / KYC Form required.
    2. Copy of valid ID proof with photograph and Address proof self-attested by the Applicant, Co-applicant & Guarantor(s) and verified with original by the Branch Manager with remarks “Verified with Original”.

    Income Proof Documents

    Valid income proof prescribed for individuals (salaried/business) / partnership firm / proprietary concerns / Companies / Trusts etc

    Proprietary Firms / Partnership Firms / LLP / Private Limited Ltd / Public Limited Company.

    1. Last 6 months GSTR
    2. Last 3 Assessment Year Income Tax Return
    3. Last 3 Financial year Annual Report
    4. Financial statements projection for the nearest Financial Year based on the performance of past year.
    5. Last 6 months bank statement.

    Residence Proof (Self Attested Photocopy)

    Any one of the following:

    1. Passport
    2. Aadhar Card
    3. Ration Card
    4. Telephone Bill
    5. Electricity Bill
    6. LPG Connection proof
    7. Municipal Water Bill
    8. Post-Paid Cell phone Bill
    9. Driving Licence
    10. Credit Card Bill
    11. Lease Deed (for salaried segment only)
    12. Printed Insurance Premium Receipt
    13. Bank Passbook with full address
    14. Ownership proof in form of Sale Deed / Power of Attorney

    Statutory Licence

    1. GST Registration certificate
    2. Udyog Aadhar
    3. Registration certificate from statutory bodies
    4. Registration certificate / Membership ID issued by govt approved bodies and organisations.
    5. License from Local Body
    6. All the required license from regulatory bodies

    Identity Proof (Self attested photocopy)

    Any one of the following:

    1. Passport
    2. Aadhar Card
    3. PAN Card
    4. Voter’s ID Card
    5. Driving Licence
    6. Bank Passbook with photo attested by Banker
    7. Employment ID Card (applicable to those working in Multinational Companies/Public Sector Units / Public Limited Companies / Government Companies).

    Signature Verification

    Any one of the following:

    For Self-employed Individuals / Partnership Firms / Private Limited Companies

    1. Passport
    2. Banker’s verification
    3. PAN Card
    4. Income-Tax Return (for salaried & self- employed
    5. ID Card from Government and Public Limited Companies

    For Limited Companies

    1. Banker’s verification
    2. Copy of Board authorisation giving names and signatures of persons authorised to sign,
    3. Signature attestations as part of Board Resolution

    ID Proof and Address Proof for Limited Companies

    Any one of the following:

    1. Memorandum and Articles of Association
    2. Certificate of Incorporation
    3. Annual Report mentioning the full address of the Company, including financial statements signed by the officer of the Company.

    Down Payment Receipt

    1. Down Payment confirmation from Manufacturer / Dealer (pre-disbursement) should be in place.
    2. Down Payment confirmation either by Mail or by the stamped receipt copy or by through the proforma invoice. Down payment receipt is only for those cases of New asset purchase.

    Field Investigation (FI) Report

    Detailed FI Report in the prescribed format should be available.

    Partnership Deed / Memorandum & Articles of Association

    1. Mandatory in case of Firms
    2. Mandatory in case of Companies

    Authority Letter signed by all the Partners / Board Resolution

    For Partnership Firms and Companies.

    Delegation for sanction

    To be decided periodically


    Age deviation, Cibil Score Deviation, and waiver of insurance shall be within the delegation of Head-Credit & Risk.

    Instructions to Branches
    1. Forward scanned copies of the required documents to Corporate Office for processing.
    2. Sanction / rejection of loan as communicated by Credit Department, should be intimated to the applicants immediately on getting such information from Corporate Office

    What Our Customers Says

    inverted quote

    Transparency and the right financial assistance are the key factors for me in choosing LuLu Finserv. The branch staff rightly helps you choose the right scheme based on your financial requirements.

    George Facister Image
    George Facister


    inverted quote

    LuLu Finserv is one of the best customer-centric and service-oriented NBFCs in the region, and I would recommend that everyone confidently avail of their services.

    Lekhakumari Image


    inverted quote

    The easy loan process and quick disbursal of funds is the best part about LuLu Finserv.

    Nithin P.P Image
    Nithin P.P


    inverted quote

    I am happy to say that LuLu Finserv has been a great support during any urgent financial need. The genuine customer service and choice of lending schemes make it the right place for all.

    Rajesh P Image
    Rajesh P


    Frequently Asked Questions

    What are the specialities of LuLu Business and MSME Loans?
    • Faster and smooth disbursal
      Our Business Loan is designed to suit your busy lifestyle and schedule. We offer quick loans, ensuring you have a hassle-free experience whenever you need funds for your business.
    • Competitive interest rates
      When you opt for LuLu Business Loans, you enjoy a competitive interest rate. Among the many business loan features, this provision makes our offering a cost-effective solution that you can rely on to maximise revenue.
    • Simplified documentation process.
      To minimise delays altogether and speed up loan processing, we only require you to submit basic business loan documents.
    • Extended loan tenure
      Loan EMIs should never strain the borrowers cashflows. With our business loan, you don’t have to worry about this as you can opt for a flexible tenure ranging up to 36 months. This helps you tailor repayment optimally based on your business’ cash flow.
    • Quick approvals
      Delays, especially because of a lack of funding, can affect profits or cause losses in business. To ensure you never face this problem, we offer quick approvals on our business loan.
    • No hidden costs.
      There are no concealed or hidden charges or costs applicable on our Business Loans. We maintain complete transparency in all loan dealings and highly value our relationship with all borrowers.
    Please explain the definition of MSME as per the Act.
    • A micro enterprise is an enterprise where the investment in plant and machinery or equipment does not exceed ₹1 crore and turnover does not exceed ₹5 crore;
    • A small enterprise is an enterprise where the investment in plant and machinery or equipment does not exceed ₹10 crore and turnover does not exceed ₹50 crore; and
    • A medium enterprise is an enterprise where the investment in plant and machinery or equipment does not exceed ₹50 crore and turnover does not exceed ₹250 crore.
    • All enterprises are required to register online on Udyam Registration Portal and obtain ‘Udyam Registration Certificate’
    What is the difference between Business loans and MSME Loans?
    • Business Loans are instalment loans for the purchase/ Renovation/Stock Addition/Asset Purchase for the purpose of upgradation of business to the next level. A Business loan can be availed by Individuals, Sole Proprietors, Partnership Firms, Private and Public Limited Companies, Limited Liability Partnerships, Trusts and Societies and who satisfy the credit parameters prescribed by LuLu Finserv.
    • MSME loans are instalment loans given for manufacturing activities and service Enterprises in the MSME segment as per the MSME definition in the MSMED Act.