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Small Business Loan Schemes during COVID-19

By Finserv MARKETS - May 22,2020
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Small Business Loan Scheme During COVID-19

The economic consequences of the coronavirus pandemic are hitting small businesses as people around the world are practicing social distancing, the government enact forced closures and a lot of events getting cancelled. In addition to the immediate public health crisis, the COVID-19 pandemic is expected to kick off a painful recession that could further impact the survival of small businesses. The SME sector contributes over 40% of the total GDP and remains a critical source of employment for India’s growing population. The government offers business loan schemes that can help small businesses grow amidst the pandemic situation.
Here’s a list of emergency funding resources available for small businesses suffering economic disruption due to coronavirus.

  • MSME Business Loans

An MSME loan is usually provided to help entrepreneurs start small businesses or to help small business owners improve their existing business. Getting a small business loan for MSME is a simple and low-cost way to borrow for commercial ventures and plug in the gaps of finance by covering a variety of expenses without facing any delays. You can get an MSME Loan without collateral, which means you are not required to pledge any of your valuable assets as security. MSME business loans are an ideal source of hassle-free MSME finance for your enterprise.

Also read what are the relief package for MSME in Atmanirbhar Bharat Abhiyan

  • Mudra Yojana

Pradhan Mantri MUDRA Yojana (PMMY) scheme provides loans up to Rs. 10 Lakhs to the non-corporate, non-farm small/micro-enterprises. These loans are offered by Commercial Banks, RRBs, Small Finance Banks, MFIs and NBFCs. The capital obtained from a MUDRA loan can be utilized to grow and expand businesses. The eligibility to avail Loan under the PMMY (Pradhan Mantri Mudra Yojana) scheme is given under three different categories- Shishu, Kishor, and Tarun. These categories cater to start-ups as well as existing businesses looking to grow their business further.

  • CGTMSE Scheme

CGTMSE (Credit Guarantee Funds Trust for Micro and Small Enterprises) is a government initiative that focuses on providing credit guarantee to financial institutions that provide loans to small businesses in India. CGTMSE is one of the more important provisions that help small businesses to thrive in a competitive environment. The scheme provides working capital loans of up to ₹ 10 Lakhs without the need for collateral or third party guarantees. This makes it easier for small businesses to avail a loan without any worries.

  •  NSIC Scheme

NSICS (National Small Industries Corporation) Subsidy for small businesses offers Raw Material Assistance and Marketing Assistance to SMEs. The NSIC is mainly focused on funding small and medium enterprises who are willing to improve their business manufacturing quality and quantity. The NSICS helps small businesses enhance their competitiveness and value of their products and services in the market.

  • CLCSS Scheme

The CLCSS (Credit Link Capital Subsidy Scheme) is run by the Ministry of small scale industries. The government aims to reduce the cost of production of goods and services for SMEs by allowing them to have a competitive price in local as well as international markets. The CLCSS offers an up-front capital subsidy of 15% for businesses like Sole proprietorships, partnership firms, co-operative, private and public limited companies.

  • Business Loan at Finserv MARKETS

Business loans available at Finserv MARKETS have no hidden charges. You can apply for business loan and utilize the loan amount to manage daily expenses of the business, purchasing equipment, and inventory, hiring employees, etc. In addition to that, these loans can also be used for mergers and acquisitions, relocating a business to a newer or bigger location or investing in a new product line would require a large amount. Entrepreneurs can also utilize the loan amount to expand the online sales campaign, or for marketing and advertising budgets.

Major benefits of getting Bajaj Finserv business loans are their minimal documentation process, instant approval and quick disbursal of loan amount. Offering flexible loan tenues of up to 12 to 60 months and attractive interest rates with no hidden charges. Moreover, you can also customize your loan according to your requirements. After availing a business loan, make sure that you use the loan amount wisely. Lastly, before you apply for business loan, make sure that you read the terms and conditions of the loan agreement carefully. This will help you avoid any inconvenience later.

Also read about GST Components to understand GST easily only at Finserv MARKETS

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Bajaj Finserv Direct Limited ("BFDL"), erstwhile Bajaj Financial Holdings Limited is a registered corporate agent of Bajaj Allianz Life Insurance Company Limited and Bajaj Allianz General Insurance Company Limited under the IRDAI composite registration number CA0551 valid till 10-Apr-2021. BFDL also renders services to Bajaj Finance Limited (‘BFL’) and Bajaj Housing Finance Limited (‘BHFL’) (referred hereinafter as ‘Lending Partner’) in sourcing of customers, providing preliminary credit support activities, fulfilment services and post-acquisition customer services related to lending business. Registered Office: Bajaj Auto Limited Complex, Mumbai – Pune Road, Akurdi, Pune – 411 035 CIN: U65923PN2014PLC150522