Looking for an MSME Business Loan from Canara Bank?

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MSME Loans from Canara Bank

Being one of the largest public sector banks in India, Canara Bank offers a range of business loans including those specifically designed for Micro, Small and Medium Enterprises (MSMEs). Embracing digitalization, the bank offers the “PSB Loan in 59 minutes” facility through which borrowers can get “in-principle” approval online based on the bank’s policies and parameters without any physical interaction with the bank. MSME loans in the range of Rs. 5 lakh to Rs. 1 crore can be processed under this platform.

As of February 2020, Canara Bank offers 34 MSME business loans, suitable for different types of micro, small and medium businesses.

The MSME loans from Canara Bank are:

  1. Canara Loan Scheme for Financing Start-ups and Early Stage Units
  2. Canara Loan for Financing Traders Under MSE Against Negotiable Warehouse Receipts of Agricultural Commodities
  3. Canara MSME Credit Against Property (CAP) Loan Scheme
  4. Canara MSME Vahan Loan
  5. Canara MSE Vijeta Loan
  6. Canara MSE Smart Loan Scheme
  7. Canara OD-MSME Loan Scheme (Manufacturing)
  8. Canara Doctor’s Choice Loan
  9. Canara Trade Loan
  10. Canara Caravan Loan
  11. Canara Contractor Scheme
  12. Canara MSME Expo Loan
  13. Pradhan Mantri Mudra Yojana (Mudra Loan)
  14. Canara Stand-by Credit for Capital Expenditure
  15. Canara Standby Term Loan Scheme for Apparel Exporters in SME
  16. Canara Loan Scheme for Reimbursement of Investment Made in Fixed Assets
  17. Canara Term Loan Scheme for Extending Quasi Equity (Risk Capital) Assistance to MSMEs
  18. Canara MSME Loan for Pre-shipment Credit to Exporters
  19. Canara MSME Loan for Post-shipment Credit to Exporters

Subsidy Linked Schemes for MSMEs from Canara Bank are:

  1. COIR Udyami Yojana (CUY)
  2. Prime Minister Employment Generation Programme (PMEGP)
  3. Energy Savings for Small and Medium Enterprises (SME)
  4. Deendayal Antyodaya Yojana – National Urban livelihood Mission (NULM) – Self-employment Programme (SEP) for Individual Enterprises (NULM-SEP-I)
  5. Deendayal Antyodaya Yojana – National Urban livelihood Mission (NULM) – Self-employment Programme (SEP) for Group Enterprises and Self-help Groups (NULM-SEP-G)

Cluster-specific Loans for MSMEs from Canara Bank cover the following segments:

  1. Cotton Ginning and Spinning
  2. Oil India Ltd. Road Transport Operators
  3. Mumbai Taximen
  4. Fireworks Manufacturing – Sivakasi
  5. Traders of Koyambedu
  6. Ashok Leyland SRTO Scheme
  7. Unemployed Youth Kerala State KSSEDM
  8. Dry Fruits & Nuts Scheme – Delhi & Chandni Chowk
  9. Marbles & Granites Scheme – Jaipur Circle
  10. Arthiyas Scheme

We give you a brief intro to each below. In addition you have the option to click further and read in detail about most of the loans on a specific page of their own. This specific page has been made specifically for you to get all the information you need on that loan in an uncluttered and easy-to-read format. In case information is less or not available, we have been not been able to create an information page as yet, but we may do so in the course of the next few months.

Canara Bank Business Loan Scheme for Financing Start-ups and Early Stage Units

This loan helps start-ups and Early Stage Units meet their capital expenditure and working capital requirements. This is a need-based loan and the minimum loan amount for this loan is Rs. 10 lakh. The maximum loan amount is Rs. 2 crore for Start-ups and Rs. 5 crore for Early Stage Units.

Features of Loan Scheme for Financing Start-ups and Early Stage Units

Why this Loan?

  • The loan is meant for Start-ups and Early Stage Units in the Manufacturing and Services sectors promoted by or proposed to be promoted by graduates of reputed education institutions such as IIM, IIT, ISB, NIT, etc.
  • Start-ups and ESUs can avail this loan to meet their working capital and capital expenditure needs

For more details on this loan, please click anywhere on this sentence to get to its specific page.

Canara Bank Business Loan Scheme for Financing Traders Under MSE Against Negotiable Warehouse Receipts of Agricultural Commodities

This loan helps Financing Traders under Micro and Small Enterprise Sector to provide finance against Negotiable Warehouse Receipt issued by accredited warehouses. The maximum loan amount is Rs. 5 crore.

Features of Loan Scheme for Financing Traders Under MSE Against Negotiable Warehouse Receipts of Agricultural Commodities

Why this Loan?

  • This short-term loan is meant for Financing Traders under Micro and Small Enterprise Sector to provide finance against Negotiable Warehouse Receipt issued by accredited warehouses
  • The bank offers collateral-free loan up to Rs. 25 lakh

For more details on this loan, please click anywhere on this sentence to get to its specific page.

Canara MSME Credit Against Property (CAP) Loan Scheme

This loan helps MSME businesses in the manufacturing and services sectors to get a loan from Canara Bank against the security of unencumbered land and building belonging to the business/promoters of the business/close relatives of the promoters. The maximum loan amount for this loan is Rs. 10 crore for manufacturing units and Rs. 5 crore for service units.

Features of Canara MSME CAP Loan

Why this Loan?

  • The loan is meant for manufacturing and service units in the MSME sector to raise money for Working Capital or other needs against the security of property
  • The maximum loan amount for this loan is Rs. 10 crore for manufacturing units and Rs. 5 crore for service units

For more details on this loan, please click anywhere on this sentence to get to its specific page.

Canara MSME Vahan Loan

This loan helps MSME manufacturing and service units to invest in vehicles as business assets or to buy new vehicles excluding Goods Carriers for business use. The maximum loan amount is Rs. 25 lakh or up to 90% “On road” cost of the vehicle, whichever is lower.

Features of Canara Bank MSME Vahan Loan

Why this Loan?

  • The loan is meant for Manufacturing and Services units in the MSME category to purchase vehicles such as two-wheelers, passenger cars, jeeps or vans for business use or as business assets
  • The maximum loan amount for this loan is Rs. 25 lakh or 90% of the on-road value of the vehicle

For more details on this loan, please click anywhere on this sentence to get to its specific page.

Canara Bank MSE Vijeta Loan

This loan helps women running Micro and Small Enterprises fulfil their Working Capital needs. The minimum loan amount for this loan is Rs. 10 lakh and the maximum loan amount is Rs. 2 crore. Partnership firms are also eligible for this loan if the majority of partners are women.

Features of Canara MSE Vijeta Loan

Why this Loan?

  • The loan is meant for businesses in the MSE sector run by women to finance their capital requirements. All MSE businesses where the management is controlled by women and partnerships where a majority of partners are women are eligible for this loan
  • This loan can be availed as a term loan or Working Capital by way of the bank’s Overdraft Facility

For more details on this loan, please click anywhere on this sentence to get to its specific page.

Canara Bank MSE Smart Loan Scheme

This loan helps Architects, Civil Engineers, CA, CS, etc. purchase an office, equipment, undertake the construction of office, expansion of units, etc. Term loans are available for maximum up to Rs. 2 crore for Urban and Metro cities and Rs. 50 lakh for other cities. Working Capital loans are available for up to Rs. 5 lakh.

Features of Canara MSE Smart Loan

Why this Loan?

  • The Term Loan is meant for CA, CS, Architects, Civil Engineers, etc. for purchase or construction of office, purchase or upgrade of equipment, expansion of unit, etc.
  • Need-based Working Capital loans are also available under this scheme

For more details on this loan, please click anywhere on this sentence to get to its specific page.

Canara Bank Business Loan Scheme for Manufacturing Units in the MSME Sector

This loan helps manufacturing businesses in the Micro, Small and Medium Enterprises (MSME) sector meet their working capital requirements. The maximum loan amount for this loan is Rs. 3 crore. Let’s take a look at its features:

Features of Canara OD-MSME Loan Scheme (Manufacturing)

Why this Loan?

  • The loan is meant for manufacturing units falling under the MSME sector as defined by the MSMED Act, 2006; i.e. engaged in an industrial activity
  • This loan is provided in the form of running limit to borrowers to meet their Working Capital needs

For more details on this loan, please click anywhere on this sentence to get to its specific page.

Canara Bank Doctor’s Choice Loan

This loan helps medical practitioners meet their working capital requirements right from setting up a clinic, nursing home, hospital, pathology lab, etc. to purchasing of equipment, vehicles, ambulance, etc. The maximum loan amount is Rs. 5 crore for this loan.

Features of Doctor’s Choice Loan Scheme

Why this Loan?

  • The loan is meant for medical practitioners who need financial assistance in fulfilling their Working Capital needs
  • Qualified Medical practitioners from different branches of medicine such as Allopathy, Homeopathy, Unani, Ayurveda, etc. are eligible for this loan if they have experience in running the business. Individuals, Proprietors, LLPs, Trusts and Companies can also avail this loan

For more details on this loan, please click anywhere on this sentence to get to its specific page.

Canara Bank Trade Loan for MSME Units

This loan helps businesses in the MSME sector meet their working capital needs. The maximum loan amount is Rs. 10 crore. It can be availed as a Term Loan or Secured Overdraft (OD) Loan. Let’s take a look at its features:

Features of Canara Bank Trade Loan Scheme

Why this Loan?

  • The loan is meant for businesses in the MSME sector to meet their Working Capital needs
  • Canara Bank offers a higher quantum of loan in the Working Capital loans category as compared to most other banks and financial institutions in the market

For more details on this loan, please click anywhere on this sentence to get to its specific page.

Canara Bank Canara Caravan Business Loan

This loan helps Goods and Passenger Transport Operators finance new vehicles for business use. The maximum loan amount is Rs. 5 crore. The interest rate for this loan is directly linked with the Internal Credit Risk Rating of the borrower.

Features of Canara Caravan Loan Scheme

Why this Loan?

  • The loan is meant for Goods or Passenger Transport Operators who are looking for financing for new vehicles for business use
  • The borrower can use this loan to purchase small, medium and heavy commercial vehicles as well as passenger vehicles

For more details on this loan, please click anywhere on this sentence to get to its specific page.

Canara Bank Canara Contractor’s Scheme

This loan helps contractors and sub-contractors within the MSME category to meet their fund-based and non-fund based Working Capital requirements. Some of the options available are Working Capital Loan, Inland Letter of Credit, Foreign Letter of Credit or Bank Guarantee or term loans for the purchase of new office, equipment, etc. The maximum loan amount is Rs. 10 crore for Working Capital Loan and Rs. 5 crore for Term Loan.

Features of Canara Contractor’s Loan Scheme

Why this Loan?

  • The loan is meant for contractors and sub-contractors to meet their Working Capital Needs
  • All contractors and sub-contractors in the MSME category belonging to the Civil, Mining and Construction sectors are eligible for this loan

For more details on this loan, please click anywhere on this sentence to get to its specific page.

Canara Bank MSME Expo – Business Loan Scheme for Exporters

This loan helps exporters under the Micro, Small and Medium Enterprises sector to purchase software or hardware for fashion designing, financing foreign travels for business and participation in inland and international trade fairs. This is a term loan scheme.

Features of Canara MSME Expo Business Loan

Why this Loan?

  • The loan is meant for exporters under the MSME sector
  • The term loan can be availed to purchase hardware/software for fashion designing, business-related travel abroad, participation in Trade Fairs in India and abroad
  • The loan quantum is directly related to the export turnover of the borrower as well as the purpose of the loan

For more details on this loan, please click anywhere on this sentence to get to its specific page.

Canara Bank Mudra Loan Scheme

This loan helps unfunded individuals, proprietors, partnerships running small manufacturing units, fruit and vegetable shops, food service units, repair shops, small industries, machine operators, truck operators, etc. get funds for their needs. The maximum loan amount is Rs. 10 lakh.

Features of Canara Bank Pradhan Mantri Mudra Yojana (PMMY)

Why this Loan?

  • The loan helps MSMEs in the Non-corporate Small Business Segment to get funds to meet their Working Capital needs
  • The loan scheme is divided into three variants depending on the type and size of business, namely Shishu, Kishore and Tarun. The quantum of loan depends on the loan variant applicable to the business

For more details on this loan, please click anywhere on this sentence to get to its specific page.

Canara Stand-by Credit for Capital Expenditure of MSMEs

This loan helps MSME units meet unforeseen and urgent requirements for acquisition or replacement of fixed assets such as balancing equipment, generator sets, machinery, etc. This is a term loan and the maximum loan amount for this loan is Rs. 25 lakh. Let’s take a look at its features:

Features of Canara Stand-by Credit for Capital Expenditure of MSMEs

Why this Loan?

  • The loan is meant for MSMEs to meet unforeseen and urgent requirements for the acquisition/replacement of fixed assets such as balancing equipment, generator set, machinery, etc.
  • This term loan is only sanctioned to existing Canara Bank customers

For more details on this loan, please click anywhere on this sentence to get to its specific page.

Canara Bank Stand-by Term Loan Scheme for Apparel Exporters in Small and Medium Enterprises

This loan helps Apparel Exporters in the SME sector acquire or replace machinery, buy hardware or software for fashion designing, carry out repairs and renovation of factory building/industrial sheds, fund travel abroad for business, etc. The maximum loan amount is Rs. 1 crore.

Features of Canara Stand-by Term Loan Scheme for Apparel Exporters in SME

Why this Loan?

  • The loan is meant for Apparel Exporters in the SME sector who want to acquire or replace machinery, purchase hardware or software for fashion designing, carry out repairs and renovation of factory building/industrial sheds, need funds to travel abroad for business, etc.
  • This loan can also be avail to participate in Trade Fairs and Exhibitions in India and abroad or other promotional activities

For more details on this loan, please click anywhere on this sentence to get to its specific page.

Canara Loan Scheme for Reimbursement of Investment Made in Fixed Assets by MSMEs

This loan helps businesses in the MSME sector get a reimbursement of investment made in acquiring Fixed Assets excluding Land and Building in addition to Capital Expenses incurred within 6 months of the purchase. The maximum loan amount sanctioned under this loan scheme is Rs. 50 lakh for new machinery and Rs. 15 lakh for second-hand machinery purchased within 2 years from the original date of purchase.

Features of Loan Scheme for Reimbursement of Investment Made in Fixed Assets by MSMEs

Why this Loan?

  • The loan is meant for businesses in the MSME sector who are looking for reimbursement of investment made in acquiring Fixed Assets excluding Land and Building and Capital Expenditure incurred within 6 months of the purchase
  • This loan can be availed on purchase of a pre-owned Fixed Asset as well if it is acquired within 2 years from the original date of purchase

For more details on this loan, please click anywhere on this sentence to get to its specific page.

Canara Bank Term Loan Scheme for Extending Risk Capital Assistance to MSMEs

This loan helps MSME businesses meet bonafide expenditure required to implement MSME projects and/or grow the business. The minimum loan amount is Rs. 25 lakh and the maximum loan amount for this loan is Rs. 10 crore. Let’s take a look at its features:

Features of Term Loan Scheme for Extending Risk Capital Assistance to MSMEs

Why this Loan?

  • Existing Canara Bank MSME customers with 3 years of profitable track record and 2 preceding years of banking  credit records are eligible for this loan
  • New customers can also apply if they have 3 years of the profit track record of promoters and can provide a satisfactory market report/records from their existing banker

For more details on this loan, please click anywhere on this sentence to get to its specific page.

Canara Bank MSME Loan for Pre-shipment Credit to Exporters

This loan helps Exporters get the financial assistance they need for activities prior to shipment including purchase, processing and packing of goods on the basis of the Letter of Credit for export from India. This is a need-based Working Capital loan.

Features of Canara MSME Loan for Pre-shipment Credit to Exporters

Why this Loan?

  • The loan is meant for exporters in the MSME sector who are looking for financial assistance for meeting their Working Capital needs
  • Exporters can avail this loan to purchase, process and pack goods meant for export from India

For more details on this loan, please click anywhere on this sentence to get to its specific page.

Canara Bank MSME Loan for Post-shipment Credit to Exporters

This loan helps exporters get the financial assistance they need for activities after shipping of goods till realisation of export proceeds. This helps them continue running their business operations until the payment is made by the buyer(s). This is a need-based loan.

Features of Canara MSME Loan for Pre-shipment Credit to Exporters

Why this Loan?

  • The loan is meant for exporters in the MSME sector who are looking for financial assistance for meeting their Working Capital needs after the shipment of goods
  • Exporters can avail this loan if they have export orders or Letter of Credit established by the overseas buyer in their favour

For more details on this loan, please click anywhere on this sentence to get to its specific page.

Canara Bank Subsidy Linked Schemes for MSMEs

Canara Bank offers five Subsidy Linked Schemes for Micro, Small and Medium Enterprises. They are:

  1. CUY
  2. PMEGP
  3. Energy Savings for Small and Medium Enterprises (SME)
  4. Deendayal Antyodaya Yojana –NULM-SEP-I
  5. Deendayal Antyodaya Yojana – NULM-SEP-G

For more details on these schemes, please click anywhere on this sentence to get to its specific page.

Canara Bank Cluster-specific MSME Loans

Canara Bank also offers 10 cluster-specific loans for MSME units in the Manufacturing and Services sector. They are:

  1. Cotton Ginning and Spinning (for MSME units in Guntur, Gulbarga, Hubli and Ahmedabad)
  2. Oil India Ltd. Road Transport Operators (for MSME Transport Operators who have tie-ups with Oil India Ltd. and Oil and Natural Gas Corporation Ltd.)
  3. Mumbai Taximen (for Taxi operators in the Mumbai circle)
  4. Fireworks Manufacturing – Sivakasi (for MSME units manufacturing fireworks and crackers in Sivakasi)
  5. Traders of Koyambedu (for Traders at Wholesale Food Grain Market in Koyambedu, Chennai)
  6. Ashok Leyland SRTO Scheme (for MSME units across India that want to purchase new light, medium or heavy commercial vehicles manufactured by Ashok Leyland)
  7. Unemployed Youth Kerala State KSSEDM (to finance 50 Unemployed Youth Entrepreneurs in each Panchayat/Municipality/Corporation in Kerala bearing training certificates issued by Rural Self-employment Training Institutes)
  8. Dry Fruits & Nuts Scheme – Delhi & Chandni Chowk (for Traders/Importers of Dry Fruits in the Chandni Chowk area of New Delhi)
  9. Marbles & Granites Scheme – Jaipur Circle (for MSME units involved in Trading and/or Processing Marble and Granite in Jaipur)
  10. Arthiyas Scheme (for Commission Agents holding Mandi Board License in Punjab and Haryana)

As of February 2020, there is limited information about these loans on the bank’s website. Please get in touch with the bank if you need more details.

Interest Rate for MSME Loans from Canara Bank

  • Working Capital Loans up to Rs. 2 lakh: Repo Linked Lending Rate (RLLR) + 1.05%
  • Term Loans up to Rs. 50,000: RLLR + 1.30%
  • Term Loans from Rs. 50,000 up to Rs. 2 lakh: RLLR + 1.55%
  • All MSME Loans Above Rs. 2 lakh up to Rs 1 crore: Depends on the Credit Risk Rating
  • All MSME Loans Above Rs. 1 crore up to Rs 5 crore: Depends on the value of Immovable Property mortgaged, value of Approved Securities and/or Internal Risk Rating/Grade
  • All MSME Loans Above Rs. 5 crore: Depends on the External Risk Rating/Grade by External Assessment Institutes

Documents Needed for Individuals

  • Loan Application Form duly filled and signed by the applicant and co-applicant, if any
  • Two Passport Size Photographs of applicant and co-applicant
  • Personal ID Proof: Aadhaar Card, PAN Card, Passport or Driving License. PAN Card/PAN Card Issuing Letter is must
  • Signature Proof: PAN Card, Banker’s Verification, Driving License or Passport
  • Residential Address Proof (Any One): Aadhaar Card, Electricity Bill, Post-paid Phone Bill, Valid Rent Agreement
  • Income/Banking Proof: Last 6 months Bank Account Statement of applicant and co-applicant, Loan Statement of Running Loans, Latest Closed Loan NOC, Net Worth of the applicant and co-applicant
  • Security (as applicable): Margin Money, Previous and Current Sales Deed, Plant and Machinery list, Plant and Machinery Current Valuation Report, Property Photographs, Previous Property Search and Valuation Report
  • A4 size copies of the aforementioned documents must be self-attested with blue ink

Documents Needed for Proprietorship and Partnership Firms

  • Loan Application Form duly filled and signed
  • Partnership Deed and Partnership Registration Certificate
  • ID Proof of the Firm: Firm PAN Card or PAN Issuing Letter
  • Office Address Proof: Electricity Bill, Post-paid Phone Bill, Valid Rent Agreement
  • Income Proof: CMA Data and Project Report, Debtors and Creditors Certificate, GST Return, Last 3 years ITR of applicant and co-applicant, Audited or CA Certified Computation of Income/Trading Account/Profit and Loss Account/Balance Sheet, Annual Audit Report and Tax Audit Report if audited, Form 16A if applicable, Net Worth of applicants, co-applicants and guarantors
  • Banking Proof: Last 1-year Statement of Company’s Major Account, Current Account, Cash Credit Account, Overdraft Account, Loan Statement of Running Loans, Latest Closed Loan NOC and Last 6-months Bank Statement of Applicant and Co-applicant’s Savings Account
  • Security (as applicable): Margin Money, Previous and Current Sales Deed, Plant and Machinery list, Plant and Machinery Current Valuation Report, Property Photographs, Previous Property Search and Valuation Report
  • Other Relevant Documents: Partnership’s Business Profile, Promoter/Guarantor’s Profile, Corporate Brochure, Business Experience Supporting Documents, Business References
  • All A4 size copies of the aforementioned documents must be self-attested with blue ink

Documents Needed for Private Limited and Public Limited Companies

  • Application Form duly filled and signed
  • Company ID Proof: Company’s PAN Card
  • Office Address Proof: Electricity Bill, Post-paid Phone Bill, Valid Rent Agreement
  • Business Proof: AOA and MOA, Company Incorporation Certificate, Business Commencement Certificate, Board Resolution, CA/CS verified Share Holding Pattern, ROC Annual Return, DIN Certificate, List of Directors on Company Letter Head, GST Number, Form 32 in case of Director Change
  • Income Proof: CMA Data and Project Report, Last 3 Years ITR Acknowledgement copy of Company and all Directors, Last 3 Years Annual Credit Report or Tax Audit Report with Article 3CB, Article 2D, Article 3CD, TDS Certificate/Form 16A, Net Worth Certificate
  • Banking Proof: Last 1-year Statement of Company’s Major Account, Current Account, Cash Credit Account, Overdraft Account, Loan Statement of Running Loans, Latest Closed Loan NOC and Last 6-months Bank Statement of Applicant and Co-applicant’s Savings Account
  • Security (as applicable): Margin Money, Previous and Current Sales Deed, Plant and Machinery list, Plant and Machinery Current Valuation Report, Property Photographs, Previous Property Search and Valuation Report
  • Other Relevant Documents: Company’s Business Profile, Promoter/Guarantor’s Profile, Corporate Brochure, Business Experience Supporting Documents, Business References
  • All A4 size copies of the aforementioned documents must be self-attested with blue ink

Reference Facts

  • Canara Bank Website: www.canarabank.com, www.canaramsme.com (website for MSME) and www.canarabank.in (net banking)
  • Headquarters: Bengaluru, Karnataka
  • Call Centre Toll-Free Number: 1800 425 0018
  • Email for MSME Loans: [email protected]