Micro, Small and Medium scale Enterprises (MSMEs) form the back bone of the Indian Economy. They need strong financial support from external sources like banks to run their business profitably, thus external source of fund is a critical success factor of MSMEs. The purpose of this article is to identify the determinants of the loan approval for MSMEs by banks while obtaining credit facilities. A questionnaire survey is conducted among the Micro Small and Medium Scale Enterprises. A sample of 152 respondents were collected to understand the loan approval process and the major determinants of loan approval. The sample respondents were selected based on convenience sampling method and the data was analyzed using simple percentage analysis, average and range analysis method and Logistic Regression. The major factors that determine loan approval for SMEs are Credit rating of the organization, business experience of the MSMEs and Loan to value (LTV) ratio. The relative importance of each factors were found in the research study and suggestions were provided based on the findings. The article provides an enhanced view about the determinants of business loan approval for MSMEs and offers a solution towards better understanding about the loan approval process.