How to avail MSME Loans under Collateral Free Schemes?

Working Capital Loan

Micro, Small and Medium Enterprises (MSMEs) are on the rise in India with the Government of India encouraging new entrepreneurs for making the country self-reliant and creating employment opportunities. It has a crucial influence in guiding the Indian economy's growth. The reason for their growth is mainly because of their huge potential in India and the Government's efforts to make them the backbone of the Indian economy. Small firms cannot entrust their precious assets to the bank in exchange for cash because this could harm their production if something goes wrong. As a result, MSME loans are a great way to get money when you need it.

There are several MSME collateral-free loan in the country, that you could consider for buying new machinery, expanding your business, or arranging necessary working capital during the growth phase of your enterprise.

Who can avail help under CGTMSE Scheme?
Anyone who runs a small business that has been in operation for more than three years and is making an annual turnover of Rs 25 crore, or employs more than 10 people can apply for this financing scheme to help them manage their finances better with the CGTMSE Scheme.

What will you need?
The documents needed to avail of the benefits of this scheme are very minimal. Here is a list of everything you would need:
– Quotations for Machinery to be purchased
– Financial Projections/CMA data of the business
– Details of Work Order in Hand
– Business details vis. Top Suppliers, Top Customers, Inventory, Working Capital assessments, Company profile, Promoter profile, Business justification.
– KYC of Company i.e. PAN, Aadhar of Promoters, GST Certificate, Licenses Copy, Gumasta, Udyam Certificate, etc.

How can you get the loan?
You can approach all large Public Sector Banks (PSUs) that have the authority to process MSME Loans under CGTMSE Coverage. Apart from this, you can complete your proposal with the project report and documentation for other Lender Banks that can assess and process your proposal

The MSME Sector in India has been playing a key role in the progress of the Indian economy. It is a major employer to the organized and unorganized sectors of India. The credit requirement of the MSME sector is huge which has been a major concern. MSME Loans are very crucial in the current scenario to ensure businesses flourish. The MSME sector faces a lot of challenges as collateral securities are required for availing bank loans and most of the MSMEs do not have any collateral security. The best part about it is that entrepreneurs can apply for MSME loan online. Collateral Free Schemes are a better option as the borrower does not have to risk personal property as a mortgage for availing of the loan.

Posted on