Guide to MSME Loans for Doctors – Secure Your Funding

As part of the ever-growing medical domain, doctors must always have the best technology to offer patients the best care possible. Besides the latest equipment, doctors running private practices require funds to meet everyday expenses, upgrade facilities, and expand. Negligence due to lack of funds can cost patients. Medical professionals can turn to MSME loans for doctors to meet such substantial capital requirements. With loans up to Rs. 2 Crores at affordable interest rates, MSME finance can help doctors scale their clinics.

Understanding MSME Loans for Doctors

On 13th May 2020, the Indian government altered the definition of MSMEs. MSMEs are micro, small, and medium enterprises categorised based on their investment levels and annual turnover. Micro enterprises include businesses with an investment of Rs. 1 Crore and turnover of Rs. 5 Crores. Small enterprises include businesses with an investment of not more than Rs. 10 Crores and an annual turnover of not more than Rs. 50 Crore. Medium enterprises are firms with an investment of up to Rs. 20 Crores and turnover of up to Rs. 100 Crores. 

Upon meeting these eligibility parameters, doctors running private practices or clinics can also qualify for MSME finance. MSME loans for doctors are designed to offer financial assistance to fulfil various business needs. Doctors can avail of MSME finance to acquire premises to start a clinic, polyclinic, diagnostic centre, physiology centre, path labs, etc. MSME loans for doctors can also be used to renovate, modernise, or expand clinics, purchase new medical equipment, or simply meet working capital needs like paying staff salaries. 

Purpose of MSME Loans for Doctors in India

MSME loans cater to the diverse financial needs of doctors, enabling them to grow their practice:

• Overdraft /  Cash Credit: These facilities address working capital requirements, ensuring uninterrupted operations. 
• Term Loans: Used for significant investments such as purchasing specialised medical equipment, establishing new clinics or hospitals, or upgrading infrastructure in existing facilities. This makes the loan for doctors to open clinics a reliable tool for long-term growth. 

Eligibility Criteria to Avail Professional Loans for Doctors

To secure MSME loans for professionals, you need to meet specific doctor loan eligibility criteria:

• Nationality: Indian
• Age: 22 years to 80 years (age must not exceed 80 at loan tenure’s end)
• CIBIL Score: a score of 685 or higher is essential for loan approval. 

Steps to Effectively Secure an MSME Loan for Doctors

Doctors can tap into MSME finance to upgrade and develop various aspects of their business. To effectively secure an MSME loan for doctors, you simply need to follow these steps: 

1. Ensure you are Registered on the Udyam Portal

To qualify for an MSME loan for doctors, you need to have a Udyam registration. The Udyam registration portal was created to help certify and identify micro, small, and medium enterprises. This MSME registration is beneficial for doctors since it serves as proof of legal existence for individual chambers and clinics. It also qualifies the doctor for government-backed collateral free loans.  

2. Check your Credit Score

Maintaining a healthy credit score is crucial when applying for MSME finance. Most lenders assess your credit score and credit history before sanctioning the loan to determine your creditworthiness. Doctors with a credit score of 750 and above have higher chances of securing MSME finance. Conducting a credit score check before applying for a loan is prudent to minimise the chances of rejection. 

3. Choose the Right Lender

Conduct thorough research to look for financial institutions offering doctors MSME loans. Choosing a lender that offers tailored MSME loans for medical professionals can help you tap into customised benefits. Compare loan terms like interest rates, loan amounts, and repayment tenures from different lenders to pick the most affordable option that aligns with your financial goals. 

4. Review the Loan Amount

Most MSME loans for doctors come without end-use restrictions. So, you can use these funds to expand your clinic, buy new medical equipment, or meet working capital requirements. MSME loan amounts start from Rs. 50,000 and can range up to a few crores. However, you should carefully evaluate the loan amount offered to determine if it can adequately cover your business expenses. 

5. Explore Government Initiatives

The Ministry of MSME offers several schemes to help micro, small, and medium enterprises in India as well as self-employed professionals like doctors. Looking for lending institutions that offer MSME loans covered by schemes like the Credit Guarantee Fund Trust for Micro and Small Enterprises, which offers credit guarantees. Loans covered by the CGTMSE eliminate the need for collateral or third-party guarantees for loans of up to Rs. 5 Crores.  

6. Check the Eligibility Checklist

Once you have decided on the purpose, loan amount, and lender, it’s time to check the eligibility criteria. Lenders offer MSME loans for doctors to qualified professionals with MBBS/BAMS/BUMS/BHMS/BDS degrees. Similarly, lenders grant MSME finance to doctors with required statutory approvals from the concerned regulatory authority. Some lenders even require a minimum work experience of 2 years post qualification to sanction the loan. 

7. Select an Appropriate Application Mode

While most lenders offer online and offline application modes, some public banks may mandate offline form submissions. If the lender offers both, choose one based on convenience. Applying online saves the hassle of travel, allowing you to apply from the comfort of your home. Alternatively, you can visit the bank or NBFC office if you prefer the offline mode.  

8. Submit the Required Documents 

Your duly filled MSME finance form must be accompanied by a set of documents supporting your eligibility. Most MSME loans for doctors require nominal documentation, which includes your medical registration certificate, KYC documents as identity and address proof, and bank statements and IT returns. Since this list can vary depending on the lender in question, you should formulate a document checklist before applying for the loan. Submitting the correct documents streamlines loan processing, minimising chances of rejection. 

Benefits of Securing an MSME Loans for Doctors

Here are the detailed benefits of finance for doctors by availing this loan:

• Capital Access: MSME loans provide essential capital to meet various professional needs, including setting up a clinic, acquiring medical equipment, and expanding services. Whether you are looking for loans to improve existing facilities or to manage operational expenses, they ensure uninterrupted growth opportunities.  
• Competitive Interest Rates: The loans under MSME financing offer competitive interest rates, making borrowing cost-effective. These lower rates are especially beneficial for professionals aiming to expand their practices or invest in advanced medical technologies. 
• Flexible Repayment Options: Professional loans often come with customised repayment terms that align with your financial capacity. This flexibility allows you to focus on your practice while managing repayments without financial stress. 
• Opportunities for Business Expansion: With these loans, you can explore new locations, add advanced medical infrastructure, or offer specialised services. They offer you a competitive edge in the healthcare market. 
• Flexibility in Collateral Requirements: MSME loans provide ease in collateral requirements, making them accessible even for doctors with limited assets. This is particularly advantageous when seeking a loan for doctors in India to set up small-scale clinics or overcome financial hurdles. 
• Enhanced Cash Flow Management: By securing these loans, doctors can efficiently manage their cash flow. Timely access to funds ensures that financial commitments, such as staff salaries, utility bills, or supply costs, are consistently met. This enables smooth operations and stability.
• Interest Rate Subsidies and Government Schemes: Leverage government-backed programs offering subsidies and favourable terms. These schemes, often linked with doctors loan schemes, reduce borrowing costs, extend the repayment period, and promote sustainable growth for your clinic or hospital. 

Why Choose Lendingkart?

Lendingkart understands the unique needs of doctors and healthcare professionals, making it a trusted partner:

• Tailored loan options, including business loans, equipment financial, and working capital loans to support the growth of your clinic or hospital. 
• With competitive interest rates, simplified application processes, and flexible repayment terms, Lendingkart offers seamless financial assistance.

Lendingkart provides personalised solutions to meet your goals. Visit Lendingkart today to access the resources you need to achieve your professional aspirations.

Conclusion

MSME loans for doctors are ideal for medical professionals looking to scale their practice, develop it, or simply meet working capital requirements. Doctors can avail of collateral-free loans from Rs. 50,000 to Rs. 2 Crores to build their practices and explore growth potentials. With the tips mentioned above, they can secure MSME finance easily to get hassle-free access to credit. 

Frequently Asked Questions

Can An Msme Loan For Doctors Be Used To Renovate A Clinic?

Yes. MSME loans for doctors can be used to renovate and modernise clinics. They can be used to purchase new medical equipment to upgrade the business and help deliver better medical services to patients.

Why Should Doctors Choose Msme Loans Over Personal Loans?

Unlike personal loans, MSME loans for doctors are specifically designed to meet business needs. With MSME finance, doctors can avail of targeted financial support with perks like lower interest rates, favourable repayment terms, and government-backed schemes. On the other hand, personal loans offer collateral-free finance but against a higher interest rate and often capped loan amounts.

Can Doctors Use Msme Finance To Hire New Staff?

Yes. MSME loans for doctors don’t come with end-use restrictions since these loans realise that small businesses can have varied financial requirements. To this end, a doctor can use MSME finance to address any financial need in the business, including hiring new staff.