The world of business is a place where every day, you get to face new challenges and learn from your highs and lows. Whether you are starting a new business or planning to expand it, you need to make sure you are backed up with sufficient funds to get started with your business. However, if you lack funds you can apply for a Business Loan. As you know, financial liquidity is vital to maintain your business operations. That’s why many businesses opt for additional financing. There are government loan schemes available for different sectors that can help secure the financing required for your business.
The MSME business loan scheme was launched by the Indian government, focussing on the working capital loan. Both new and existing businesses can apply for the scheme for business financial assistance up to ₹ 1 crore. The loan processing takes 8-12 days to complete, while the approval or disapproval is granted within the first 59 minutes of application. The best part of MSME Loan Scheme is that, you get this loan at 8% ROI, which makes the loan repayment easier. A reservation of 3% is available for women entrepreneurs as well, offering a quick loan sanction to the increasing number of women business owners.
CGTMSE (Credit Guarantee Fund Trust for Micro and Small Enterprises) has been facilitating collateral-free loans for MSMEs for quite a long time now. Any scheduled commercial bank and the regional rural bank can become a part of the CGTMSE scheme by empanelling itself as a lending authority. The agency sanctions loans to MSME on the basis of their credit standing via the lending agencies in question. The CGTMSE scheme provides working capital loans up to Rs. 10 Lakhs without any collateral as security. However, for all credit facilities for the amount that is above Rs. 10 Lakhs and up to Rs. 1 crore, only primary security or mortgage of land and building will be covered under the CGTMSE scheme.
The Micro Units Development and Refinance Agency (MUDRA) has a funding scheme where small businesses and start-ups can get financial support in the form of low-cost credit. MUDRA Loans can be applied through public and private sector banks, co-operative societies, small banks, scheduled commercial banks, and rural banks. The loans are generally given to micro or small businesses that operate in the manufacturing, trading and services sector. A business firm can avail funds via the MUDRA loan scheme under three categories.
The MUDRA Card is an innovative product that provides a working capital facility as a cash credit arrangement. This card is given to you like a debit card against your MUDRA loan account, where you can withdraw funds from your MUDRA loan account multiple times.
This loan scheme funds technological upgrades in your business. The funds can be used to undertake a revamp related to numerous processes for your business, like manufacturing, marketing, and supply chain. With the Credit Link Capital Subsidy Scheme, the production cost is reduced for creating and providing goods and services by SMEs. The CLCSS offers an up-front capital subsidy of 15% for businesses that are eligible under the scheme. However, the maximum amount that can be availed is set at Rs. 15 Lakhs. A sole proprietorship business, partnership firm, and co-operative or private and public limited company are all eligible under the CLCSS.
The NSIC offers MSMEs, two different kinds of funding benefits:
Any business that qualifies as a micro and small enterprise with an EM Part-II (Optional)/ Udyog Aadhaar Memorandum (UAM) is eligible to apply for the NSIC scheme under its Single Point Registration Scheme (SPRS).
If you qualify for this business loan scheme, you can opt for the raw material assistance scheme, where you can fund the cost of indigenous and imported raw material required for your business. Under the marketing support, you can use the funds to enhance your competitiveness and the market value of your offerings. The NSIC subsidy scheme also overlooks the functioning of an MSME and supports it in its endeavour to enrich production and quality.
As MSMEs are consistently growing in India, various lending institutions now offer exclusive loan products for MSMEs. At Finserv MARKETS you can apply for an SME loan for your business at attractive interest rates. Bajaj Finserv Business Loans are collateral-free, which means you do not have to put your personal or business assets on the line to get the finance for your business. You can get a business loan of up to Rs. 30 Lakhs. The personal loan funds can be used for undertaking various business operations, such as the expansion of your business, acquisition of other companies, buying new machinery, technology, etc.
Being an unsecured type of loan you don't have to pledge any collateral as security for the loan. You can simply apply for a SME loan with the Finserv MARKETS App and get pre-approved offers for an instant loan with ease. Before applying you can also check your CIBIL score for free and also obtain a Financial Health Check Report (FHCR). These customized loans can give your business the much-needed boost to help your small business rise with enhanced competitiveness and profitability.