Based on their nature, scale, investment limit and turnover, businesses are classified as micro, small or medium enterprises (MSMEs). These enterprises are covered under the MSME Development Act, 2006, and are broadly of two types- manufacturing or services. Business owners can get registered and get MSME certificates to avail of the benefits made available by the government for the growth and support of such enterprises. The government extends support measures in the form of easy credit facilities or policy steps to facilitate their growth.
For MSMEs that needs funds either for their working capital needs or to finance their growth and expansion plans, HDFC Bank offers Business Loans curated to fit their requirements. Whether you own and operate a business in construction, education or infotech, we have you covered when it comes to financial assistance. MSME enterprises can avail of Business Loans of up to Rs 50 lakh, provided they meet the eligibility criteria outlined by HDFC Bank.
Difference between micro, small and medium enterprises
There are different business enterprises and companies, starting from small neighbourhood outlets or stores to the bigger grocery store chains or franchise stores. These firms employ several people depending on their manpower requirements. To start such business ventures, there is a minimum capital requirement. We see a large number of micro and small business enterprises on a daily basis, ranging from the photocopy shop in the neighbourhood market or the chaat stall that makes an appearance every evening to the small restaurant in the town square and the home decor outlet.
The government has recently redefined MSMEs by raising the investment limit cap, adding an additional turnover criterion, and removing existing differences between the manufacturing and services enterprises.
As per the latest revision, all those units or businesses with an investment of over Rs 10 crore but less than Rs 50 crore and a turnover of Rs 50 crore to Rs 250 crore are categorised as medium enterprises. Those firms with up to Rs 1 crore-Rs 10 crore investment and a turnover of over Rs 5 crore, but under Rs 50 crore are termed small enterprises. Lastly, those companies with up to Rs 1 crore investment and a turnover of less than Rs 5 crore are defined as micro-enterprises.
Key differences: Micro, small and medium enterprises | |||
Composite Criteria: Investment in Plant & Machinery/equipment and Annual Turnover [1] | |||
Classification | Micro | Small | Medium |
Manufacturing Enterprises and Enterprises rendering Services | Investment in Plant and Machinery or Equipment: | Investment in Plant and Machinery or Equipment: | Investment in Plant and Machinery or Equipment: |
If you are a business owner- micro, small or medium enterprise- looking for ways to scale your firm, HDFC Business Loan is the right fit for you. A collateral-free loan option solves all your funding problems, paving the way for the growth of MSMEs in India. So why wait? Click here to find out more about our Business Loan and apply now.
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*Terms and conditions apply. Business Loan at the sole discretion of HDFC Bank limited. Loan disbursal is subject to documentation and verification as per Banks requirement.