If you search online for the minimum CIBIL score for MSME loan, you’ll find numbers like 650, 685, 700 or even 750. But very few articles tell you how brutally fast things can change in real life with sudden change in cibil score.
So this article is different.
Because I’ve lived both sides of the MSME loan story.
you may also like to read: Your Business Has a CIBIL Score Too — Here’s How to Improve It
When I started my MSME unit, I was:
Yet, I got my MSME loan very easily.
Why?
👉 Because my CIBIL score was very good.
Even though I was new in business:
At that time, I clearly understood one thing:
Banks and NBFCs didn’t look at me as a “new business owner”.
They looked at me as a low-risk borrower because of my credit history.
This is the real power of a good CIBIL score in MSME loans.
Unfortunately, business doesn’t always move in a straight line.
I went through a bad phase in my business career also. That happpened because of the following issues:-
Because of these above problems , I missed a few EMI payments.
And here’s the harsh truth most people don’t talk about 👇
It fell below 650.
That’s it.
Game changed completely.
The impact was immediate and shocking:
At that point, I hadn’t even applied again for an MSME loan —
but honestly, I know the result would be the same.
Because in a proprietorship MSME:
Your business credit = your personal credit
There is no separation.
Based on:
Here’s the honest breakdown 👇
| CIBIL Score Range | MSME Loan Reality |
|---|---|
| 750+ | Best chance, fast approval, lowest interest |
| 700–749 | Very good chance, normal processing |
| 650–699 | Possible, but stricter checks |
| Below 650 | High rejection risk, especially unsecured loans |
👉 Below 650, even small personal loans become difficult — MSME loans are no exception.
If you run a proprietorship firm, remember this:
This is exactly what happened to me.
Honestly speaking — it becomes very difficult, but not impossible.
Options may include:
There is no fixed government number, but practically 650 is the minimum, while 700+ is preferred by most lenders.
Yes. I personally got a collateral-free MSME loan easily because my CIBIL score was strong, even though my business was new.
Yes — very quickly. In my case, missing a few EMIs dropped my CIBIL by 60–70 points within months.
Absolutely. In proprietorship MSMEs, your personal CIBIL score is the main deciding factor.
SIDBI Pulse Report — MSME Credit & Risk Insights
https://www.sidbipulse.in
(Research and reports on MSM
SIDBI — MSME Loan Products & Schemes
https://www.sidbi.in/en/msme-loans
(Official government-backed institution for MSME financing in India)
Bajaj Finserv — MSME / Business Loan Eligibility (CIBIL ~685)
https://www.bajajfinserv.in/business-loan-eligibility
(Mentions minimum CIBIL score requirement for business/MSME loans)
Godrej Capital — Role of Credit Score in MSME Loans
https://www.godrejcapital.com/blog/what-is-the-minimum-cibil-score-required-for-a-business-loan
(Explains how CIBIL score impacts MSME/business loan approval)
Tata Capital — Business & MSME Loan Eligibility Criteria
https://www.tatacapital.com/blog/business-loan/cibil-score-for-business-loan/
(Provides score ranges and practical lender expectations)
Ujjivan Small Finance Bank — Minimum CIBIL Score for Business Loans
https://www.ujjivansfb.in/blog/what-is-the-minimum-cibil-score-required-for-business-loan
(Bank-level guidance on CIBIL score requirements)
Lendingkart — MSME Loan Eligibility & Credit Score Guidance
https://www.lendingkart.com/blog/minimum-cibil-score-for-business-loan/
(Fintech lender perspective on MSME credit assessment)
CGTMSE (Credit Guarantee Fund Trust for Micro and Small Enterprises)
https://www.cgtmse.in
(Official site for collateral-free loan guarantee schemes)
Tabrez is an MSME entrepreneur and business content creator who writes from real-life experience, not just theory. His work focuses on MSME finance, credit awareness, and practical lessons for Indian entrepreneurs.
This article is for educational purposes only and does not constitute financial advice. Loan eligibility varies by lender and time.
AI Disclaimer: AI tools were used to assist in structuring and refining this content. The experiences and opinions shared are real and personal.
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