Karnataka Bank is India’s one of the leading scheduled private sector banks that provides MSME loans across India. Any person/entity that requires a business/MSME loan for expanding business, buying new machinery, purchase of inventory, or for fulfilling working capital needs can opt for Karnataka Bank’s business loans that provide comprehensive support. The bank offers MSME loans at interest rates of 9.29% onwards and offers funding for MSMEs with simple processing and quick sanction process.
Karnataka Bank MSME Loan – Interest Rate
| Interest rate (Under CGTMSE) | 11.33% onwards |
| Loan Amount | Max. Rs. 1500 lakh |
| Loan Amount (Under CGTMSE) | Max. Rs. 200 lakh |
| Repayment Tenure | 120 months (Term Loan) |
| Repayment Tenure | 34 months (Working capital OD) |
| Cash Margin | 25% of the loan amount |
| Collateral Security of property | To be obtained not less than 60% of the exposure |
| Security | Hypothecation of assets acquired, book debts, stocks and mortgage of business space or acquired property out of loan amount. |
Note: The mentioned interest rates, fees and charges are subject to change and depend on the sole discretion of the bank and RBI. GST and service tax shall be levied extra on the mentioned charges.
Check & Compare – Business Loan Interest Rate of Popular Banks
Eligibility Criteria
All MSMEs involved in manufacturing, production, processing or preservation of goods are considered to be eligible for availing MSME loans.
Purpose
MSME loans offered by Karnataka Bank can be used for following purposes:
- Working Capital Needs
- Purchase of property for self-use. (Property i.e. Office, shop, godown, factory)
- Establishment or improvement of units
- Repairs and renovations of units
- Acquiring equipment, vehicles and machineries, etc.
Document Required for Loan Application
- PAN Card of the applicant, an individual or the company
- Identity proof of the applicant
- Address proof of the applicant
- Bank statement of the last 12 months
- A certified copy of Income Tax Returns, Balance Sheet, Profit and Loss Statement of preceding 2 financial years
- A certified copy as proof of continuation of the business
- Other documents as required by the bank
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Types of MSME loans offered by Karnataka Bank
KBL MSME Loan
Interest Rate: 9.29% onwards
MSMEs can apply for business loans for fulfilling working capital needs, purchase of assets, and purchase and repair of machinery/equipment. KBL has a ceiling of Rs. 1500 lakh for the disbursement of loans to MSMEs. An enterprise can get a collateral-free loan for an amount of up to Rs. 10 lakh. The tenure for working capital loan is for 12, 15, and 18 months, and for term loans, it can extend up to 120 months.
Generally, the collateral security of property is not less than 60% of the exposure. The sanctioning of the loan also requires a guaranteer. Schedule for interest rates for MSME loans is given below:
Note: The mentioned interest rates, fees and charges are subject to change and depend on the sole discretion of the bank and RBI. GST and service tax shall be levied extra on the mentioned charges.
KBL Commodity Pledge
Interest Rate: 10.34% onwards
KBL Commodity Pledge Loan scheme is offered to traders and millers against pledge of their agricultural commodities. Individuals, HUF’s, partnership firms, and companies engaged in the trading or processing of agricultural commodities for not less than 3 years can apply for this loan. Under this loan, the agricultural commodities purchased or processed are taken as collateral. A maximum of 70% of the value of the collateral can be obtained as a loan. The floor and ceiling amount of loans are Rs. 10 lakh and Rs. 200 lakh.
KBL Mortgage OD (Overdraft)
Interest Rate: 10.97% onwards
KBL Mortgage OD is an instrument to provide finance for meeting professional, business, and working capital requirements. Individuals or enterprises eligible under the Priority Sector and of age above 21 years are allowed to avail the benefit of this loan. It can be availed for working capital needs subject minimum amount of Rs. 11 lakh and maximum up to Rs. 100 lakh. The maximum loan repayment period can be 12 months and the margin is minimum up to 60%. The loan schedule for the same is given below:
Note: The mentioned interest rates, fees and charges are subject to change and depend on the sole discretion of the bank and RBI. GST and service tax shall be levied extra on the mentioned charges.
KBL Contractor Mitra
Interest Rate: 9.29% onwards
Individuals, partnership firms, companies involved in the civil contract services can avail KBL Contractor Mitra loan for purchase of new vehicles or machinery required for civil contract services. Against the hypothecation of the vehicle or machinery bought, a maximum amount of Rs. 1000 lakh can be availed for a maximum repayment period of 84 months for new vehicles and machinery, and 48 months for used vehicles.
KBL Mahila Udyog
Interest Rate: 10.14% onwards
KBL Mahila Udyog is a funding scheme in which bank provides finance for women entrepreneurs. Companies/Enterprises in which at least 51% of the shareholding and controlling stake is with women entrepreneurs and women Self-Help Groups (SHG) can apply for this loan for any income-generating activity against hypothecation of assets. Working Capital Loan can be availed for a maximum of Rs. 2 lakh and maximum period of 12 months. Term Loan can be availed for a maximum of Rs. 10 lakh and maximum period of 120 months.