Every business needs funds. Without funding or capital, no business can be successful. In fact, businesses always need funds on a daily basis to carry out their operations. But if you are an entrepreneur or a startup, raising funds can be a challenging task. This article highlights the multiple ways to apply for MSME Loan.
Well, here you can utilize the MSME Loans. MSME Loans are a great opportunity for entrepreneurs and startups to raise the amount they need. Moreover, if you are someone who has a well-established business and wants to expand it, the MSME Loans can be a perfect choice.
Thus, MSME Loans are beneficial to many and there are several ways you can get these loans.
Pradhan Mantri Mudra Yojana (PMMY) Scheme for MSME Loans
Pradhan Mantri MUDRA Yojana (PMMY) is a scheme launched by the Hon’ble Prime Minister on April 8, 2015, for providing loans up to 10 lakh to the non-corporate, non-farm small/micro-enterprises. These loans are classified as MUDRA loans under PMMY.
Mudra loans under Pradhan Mantri Mudra Yojana (PMMY) can be availed of from nearby branch offices of a bank, NBFC, MFIs, etc. Also, you can also file an online application for MUDRA loans on the Udyamimitra portal (www.udyamimitra.in).
- Non–Corporate Small Business Segment (NCSB) consisting proprietorship/partnership firms running as small manufacturing units, service sector units, shopkeepers, fruits/vegetable vendors, truck operators, food-service units, repair shops, machine operators, small industries, artisans, food processors and others, in rural and urban areas all these are eligible.
Type of Assistance
Mudra Yojana provides three types of Assistance. These packages are ‘Shishu’, ‘Kishor’ and ‘Tarun’. The names of loan packages are to signify the stage of growth/development and funding needs of the beneficiary micro unit/entrepreneur and also to provide a reference point for the next phase of graduation/growth to achieve. The financial assistance under these schemes are as follows:-
- Shishu: covering loans up to 50,000/-
- Kishor: covering loans above 50,000/- and up to 5 lakh
- Tarun: covering loans above 5 lakh to 10 lakh
Credit Guarantee Fund Government Business Loan Scheme form MSE (CGTMSE)
The Ministry of Micro, Small and Medium Enterprises, and Small Industries Development Bank of India (SIDBI) together established the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE). The guarantee coverage under the CGTMSE ranges from 85% for Micro Enterprise (up to Rs 5 lakh), 75% for others, and 50% for retail activity. Under this scheme, eligible applicants can get credit facilities up to Rs. 200 Lakhs.
- However, Eligibility Criteria includes only new and existing Micro and Small Enterprises engaged in manufacturing or service activity excluding Educational Institutions, Agriculture, Self Help Groups (SHGs), Training Institutions, etc.
- A borrower needs to provide an IT PAN Number in advance to avail of the loan facility.
Type of Assistance
- The Guarantee cover ranges up to 85% of the sanctioned amount (up to Rs. 5 Lakhs) of the credit facility for micro-enterprises.
- The Guarantee cover ranges up to 50% of the sanctioned amount (up to Rs. 10 Lakhs) of the credit facility for retail trade activity.
- If the default is incurred, the trust shall pay up to 75 percent of the loan facility default which would be increased to 200 lakh by the lending institution.
Apply for Startup India Certification and MSME Registration – Multiple Ways to apply for MSME Loan
One of the best ways from Multiple Ways to apply for an MSME Loan is to apply for Startup India Certification and MSME Registration. Startup India Scheme also allows your company to get recognition and avail of other benefits including interest-free loans. The loan Scheme under Startup India Certification is known as The Venture Capital Assistance Scheme. Eligibility for Startup India Certification and MSME or Udhyam Registration
- Any type of Business Entity including Private Limited Company, Public Limited Company, One Person Company, Partnership Firm, Limited Liability Partnership, Sole Proprietorship can apply for MSME Registration.
- Voluntary GST Registration
- The company should be newly incorporated and should not be formed by splitting up or reconstructing of an existing business.
- Turnover should be less than INR 100 Crores in any of the previous financial years.
- An entity shall be considered as a startup up to 10 years from the date of its incorporation
- The business concept should be unique driving towards innovation or bringing improvement of existing products, services, and processes and
- A startup should have the potential to generate employment/ create wealth.
Type of Assistance
- Venture Capital Assistance Scheme provides financial support for the preparation of bankable Detailed Project Reports (DPRs) through the Project Development Facility (PDF).
- MSME Registration provides Low-Interest Rate and Easy Loans in only 59 Minutes.
- Angel Tax Exemption on Equity Investment under Startup India Certification.
- Eligibility to get more preference in Government Tenders.
- Low Trademark Registration Government fees.
- Eligibility for multiple Credit Support Schemes and various tax exemptions.
Prime Minister’s Employment Generation Programme (PMEGP)
The Prime Minister’s Employment Generation Programme (PMEGP) is a combined form of two schemes of the Prime Minister’s Rojgar Yojna (PMRY) and Rural Employment Generation Programme (REGP).
The KVIC distributes government subsidies via authorized banks for ultimate disbursement to enterprises or recipients directly into their bank accounts under this scheme.
- Every person above or at the age of 18 is eligible.
- For projects, in the production sector that cost above Rs. 10 lakh and the business or service industries which costs up to Rs. 5 lakh can avail this scheme.
- The individual should have at least be a standard VIII pass.
- Self Help Groups, Institutions registered under Societies Registration Act, 1860, Production-based Co-operative Societies, and Charitable Trusts are also eligible.
Type of Assistance
- Assistance up to Rs. 10 Lakhs
- Subsidiary Rates for the general category are 15% in urban areas and 25% in rural areas.
- subsidiary for the special category is 25% in urban areas and 35% in rural areas.
In conclusion, the above mentioned are some of the best and multiple Ways to apply for MSME loan.
If you want any other guidance relating to the MSME Registration & Udyam Registration please feel free to talk to our business advisors at 8881-069-069.
Download E-Startup Mobile App and Never miss the latest updates narrating to your business.