Business Loan under CGTMSE

As a developing nation, India boasts several micro and small-scale industries. To support these enterprises, the Government of India has introduced the CGTMSE scheme. Securing business loans under CGTMSE up to ₹5 cr has proven highly advantageous for MSMEs. It enables them to grow, expand, and rejuvenate their operations.

The CGTMSE scheme empowers aspiring entrepreneurs, especially in manufacturing. It offers up to ₹5 crore in collateral-free, government-backed loans. A valuable boost for those seeking financial support.

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Key Features to Apply for CGTMSE Loan

CGTMSE loan help businesses cover expenses, ranging from short-term needs like working capital to long-term ones such as equipment purchases and expansion, with the added benefit of credit guarantee support for eligible enterprises.

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CGTMSE Loan Coverage

The Government of India introduced the CGTMSE scheme in 2000 to support small businesses. It stands for Credit Guarantee Fund Trust for Micro and Small Enterprises.

The scheme aims at aiding Indian firms that are in their initial phases or fall under the MSME. It focuses on providing credit guarantees to financial institutions providing loans to MSMEs. Hence, an applicant owns a small/medium-scale business and gets a 5 crore loan without collateral under CGTMSE. However, there are certain eligibility criteria that the candidate needs to match.

Advantages of Business Loan under CGTMSE

The scheme aims to strengthen the credit lending facility overall.
It offers a Hybrid Security product that covers the credit facility up to 5 Crores without collateral.
Under this scheme, the government helps to extend the credit facility up to Rs 5 Crores.
CGTMSE loan interest rate from 14% (depends on the Financial ratios)
Guarantee cover will exist until the total tenure of the loan credit.
The CGTMSE aims to acquire term loans & working capital utilities from the same organization.

CGTMSE Scheme Eligibility

To be eligible for a business loan under CGTMSE, you must meet certain criteria. These criteria may vary, but some of the essential requirements include:

Applicant must own a micro or small enterprise.
The Business must have at least 3 years of business continuity.
Small and medium-sized manufacturing units are eligible.
All manufacturing and service sector companies can use this facility.

Note: The eligibility criteria are common for applicants across India. However, there may be certain other criteria as well. Those are to meet specifically with the region or the financial institution that sanctions the loan.

How to Get 5 Crore Business Loan Without Collateral?

To secure a 5 crore loan without collateral under the CGTMSE scheme, submit your application to participating government or private banks, available even in rural areas. Here’s how to apply:

CGTMSE Loan Documents

CGTMSE loan documents vary from lender to lender. Also from case to case. However, in all scenarios, there is a standard set of documents. Those are as follows.

I. KYC Documents

A copy of PAN Card.
Proof of Address: (Passport Copy / Aadhaar Card / Electricity Bill / Registered Rent Agreement)
Statutory documents

1. Proprietary Firm

Shop Act
GST Registration Certificate
Udyog Aadhaar Memorandum
VAT Registration
GST certificate
other Registrations Applicable.

2. Private / Public Limited Company/One Person Company

MOA & AOA, Certificate of Incorporation
Certificate of commencement of business in case of a public limited company
GST Registration Certificate
Shop Act
Udyog Aadhaar Memorandum
VAT Registration
and other Registrations Applicable.

3. Partnership Firm

Registered Partnership Deed

4. In Case of LLP

LLP Agreement
Shop Act
Udyog Aadhaar Memorandum
GST Registration Certificate
VAT Registration and
Other Registrations Applicable.

II. Income Documents

Last 3 years Financials (IT Returns, Computation Sheet & Balance-sheet). Proof of turnover vide latest sales/service tax returns and Invoice / Purchase Order Copy (for the loan against receivables)
Last 1-year bank statement of all operative bank accounts.
Details of all existing loans: Sanction Letter and Loan Account Statement for the last 1 year.

III. Property Documents

Previous & current sales deed
Plant & machinery list
Plant & machinery current valuation report
Margin money
Property photographs
Previous property search & valuation report

1. Start Your Business

We cordially track the deadlines and make our quality tangible, while executing finance projects well ahead of time.

2. Prepare a Project Report

This is extremely crucial as the chances of your loan getting approved will significantly depend on this. You will have to provide a thorough business plan with all the required details.

3. Apply For Loan Sanction

Along with the project report, visit a reputed financial institution or bank to apply for your loan.

4. Get the CGTMSE Coverage

Once your loan is approved, the institution or bank will apply to the relevant CGTMSE scheme. After approval, you can get the loan by paying the required service charges and CGTMSE charges.

How do we execute the CGTMSE proposal?

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Apply for a CGTMSE Loan at Terkar Capital

Terkar Capital, a reliable financial institution and your trusted CGTMSE loan consultant, offers hassle-free unsecured funding of up to Rs 5 cr under the CGTMSE scheme. We provide personalized assistance to help business decision-makers understand the scheme thoroughly and make the best choice for their needs.

Our commitment extends beyond the loan process as we value our relationship with borrowers. We strive to ensure their satisfaction with both the loan and our services.

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CGTMSE Loan FAQs

The guarantee fee is typically 1.5% of the loan amount for the first year, and the annual service fee is 0.75% for subsequent years. However, these rates may vary.

Any new or existing micro and small enterprise engaged in manufacturing or service activities, except those listed in the negative list of CGTMSE, is eligible to apply for a loan under the scheme.

Retail trade, educational institutions, training institutions, and self-help groups are generally not covered.

No, one of the main features of the CGTMSE scheme is that it provides credit without the need for collateral or third-party guarantees.

The coverage under the CGTMSE scheme is up to 85% of the loan amount, depending on the category of the borrower and the loan amount.

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Thank you for helping to raise unsecured funding with such a short notice. Professional experience through out the process. Best Luck.

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Thank you for your efforts in arranging facility. Their approach is simple, professional, and fast! The team is highly responsive that executed the process in short span of time without any hassles

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We are very thankful to Terkar Capital for your efforts in arranging facility. Their approach is very simple, professional, and fast! The team is highly responsive that executed the process in short span of time without any hassles. Great work... Thank you!

Harshada Tamhankar

Terkar Capital is a registered brand of Terkar Global Financial Development Pvt Ltd, an Investment Banking Firm with a national footprint. We work extensively with professionals and businesses of all sizes to arrange debt funding instruments.