Government Nodal AgencyTerm Loan (Capex / Expansion)Small Enterprise (Investment ≤ ₹10 Cr)🛡️CGTMSE CoveredVerified: 2026-09-29

PMEGP Second Loan for Upgradation of MSME Units (Up to ₹1 Crore)

Primary Lending Institution:Ministry of Micro, Small and Medium Enterprises

Second loan up to ₹1 Crore for scaling existing PMEGP units with 15% government capital subsidy.

Connected Central Government Scheme: PMEGP Second Loan for Upgradation of Manufacturing Units (Up to ₹1 Crore with 15% Subsidy)View Government Scheme Guidelines →

Interest Rate8.50% – 10.00%Linked to EBLR / MCLR / Risk

Loan Amount QuantumUp to ₹1 Crore (Manufacturing) / ₹25 Lakh (Service)Based on turnover & project cost

Repayment TenureUp to 7 yearsWith moratorium where applicable

Collateral SecurityCovered under CGTMSE or hypothecation of modernized plant and equipment

What's Missing: Crucial Fine-Print & Exclusion Gaps

Restricted strictly to existing PMEGP/MUDRA/REGP units that have fully repaid their previous loan and remained profitable for the preceding 3 consecutive financial years.

Note: Eligo publishes these regulatory and commercial exclusions directly from bank product guidelines and CGTMSE rules to protect MSME applicants from unexpected fee debits or loan rejection surprises.

What is PMEGP Second Loan for Upgradation of MSME Units (Up to ₹1 Crore)?

Expansion and technology upgradation financing for successfully operating PMEGP and MUDRA units that have fully repaid their first loan and demonstrated profitable growth.

Key Benefits & Features

Up to ₹1 Crore loan for manufacturing units with 15% government subsidy (₹15 Lakh); up to ₹25 Lakh for service units (₹3.75 Lakh subsidy); technology modernization.

Government Subsidy & Credit Guarantee Coverage

15% Government Subsidy (20% for NER and Hill areas)

Enterprise Eligibility Criteria

Existing PMEGP/REGP/MUDRA units with full repayment of first loan, profit-making for last 3 years, and valid Udyam registration.

Business Vintage3+ Years in Operation

Min. Annual Turnover₹20.0 Lakh

Processing Fee0.50% + GST

Prepayment TermsZero prepayment penalty on floating rate loans

How to Apply (3 Verified Paths)

💼Path 1: Current Account Portal

Apply online at PMEGP portal submitting 1st loan closure certificate.

🌐Path 2: Official FinTech / Govt Portal

Submit upgradation DPR on PMEGP 2nd loan online module at kviconline.gov.in.

🏢Path 3: SME Banking Center Walk-In

Visit financing bank branch with 3 years audited financials and modernization quotation.

Eligo does not collect business loan applications or financial data. Apply directly on the verified official domain:

Visit Official Portal↗

Documents Required Checklist

First loan completion certificate from lending bank, 3 years audited balance sheets and ITRs, DPR for technological upgradation, Udyam registration.

Frequently Asked Questions

What is the maximum loan under PMEGP 2nd loan for manufacturing?

Manufacturing units can avail up to ₹1.00 Crore project cost with 15% subsidy (maximum ₹15 Lakh).

Can service sector units apply for 2nd loan?

Yes, existing service units can avail up to ₹25 Lakh with 15% subsidy (maximum ₹3.75 Lakh).

What is the subsidy rate for North East and Hill regions?

Borrowers in NER, Jammu & Kashmir, Ladakh, and notified hilly regions receive a higher 20% subsidy.

How many years of profit track record are mandatory?

The enterprise must have generated net profit in the last 3 consecutive audited financial years.