Who is eligible for an SME loan in Nepal?

The growing number of entrepreneurs in the nation reflects the need for financial aid like SME loans popular. Although SME loans have been a hot topic in Nepal, there seems to be too little knowledge about the eligibility of a candidate for an SME loan. So understanding the urgency of the situation, we’ve come up with this blog where we shall discuss the eligibility criteria of an SME loan in Nepal.

SME loan: A brief description

A business to operate and flourish requires workforce, plans and designs and most importantly, FUNDS. Keeping this scenario in mind and understanding the utmost need to create accessibility of funds to those willing to be entrepreneurs, many financial institutions, popularly commercial banks, are offering loans to small and medium enterprises to suffice their dream business. Among various business loan options, the SME loan is a special one. SME loans are provided to Small and Medium Enterprises to support their growth- financial and corporate. 

[ Read our blog Why is NIC ASIA Bank the best bank in Nepal? ]

Who needs an SME loan?

Anyone who is a small and medium entrepreneur or a business owner willing to start or upgrade their business needs an SME loan. With SME loans, businesses can go execute their predetermined business plan.

When can a business qualify for an SME loan in Nepal?

To acquire a business loan, the borrower must have an academic or other(business) qualification. Upon meeting the required qualifications, one becomes eligible to apply for an SME loan In Nepal. In Nepal, there are generally two businesses that can apply for an SME loan: 1) An existing business and 2) A start-up business. Both of them need to fulfill the pre-set criteria to apply for an SME loan.

Eligibility for the Business Loan

The eligibility criteria for businesses to get Business Loan in Nepal are as follows: 

For an existing business:

• The business should be registered with government authorities/municipality/rural municipality
• The business should have a minimum of 2 years of profitable operation and cash profit.

For Start-up business

• The business should have the existence for less than a year
• It should be registered with the government authorities/municipality/rural municipality
• Minimum 2 years of experience in a similar business of partners or key people.

Along with these eligibility criteria, the documents needed for the loan processing are:

• Your latest audited and projected financial statements and tax clearance as per the requirements
• Citizenship certificate of applicant and business partners, directors
• Memorandum of Association (MOA)/ Articles of Association(AOA), Board Resolutions as applicable
• Your business registration certificate
• PAN and VAT Registration
• Land Ownership Certificate
• Building Completion Certificate
• Four Boundaries Certificate (Charkilla), BluePint, Trace Map, etc.

Now that you have the major FAQs (Frequently Asked Questions) on SME loan answered, check on your business status and see if you have to apply for an SME loan. 

Which bank is best for SME loans in Nepal?

NIC ASIA Bank, the No.1 Bank in Nepal, is the prime destination for all banking services, including SME loans. Comparatively,  NIC ASIA Bank’s SME loan is one of the bank’s most sought-after banking products after the Digital Banking services. In fact, you can  enjoy comparatively lower interest rates, quick and fast processing, and flexible and considerate terms and conditions.

[ For more information, you can read our blog: Who is eligible for SME loans in Nepal? ]

If you found this blog helpful, please share it with your friends and family