RDJ Engineering Services Private Limited required ₹75 lakh for machinery and working capital, but they did not have any collateral. To meet their requirement, we secured funds under the CGTMSE loan facility. The entire process was completed in 6 working days. Let’s see how.
CGTMSE Loan Process
The CGTMSE scheme is a government initiative that helps businesses like yours get loans without needing to provide collateral. This means you can access the funds you need to expand operations, purchase equipment, or manage working capital, with reduced risk for both you and the lender. We can help you navigate the CGTMSE process and find the right loan for your business goals. Let’s understand CGTMSE from the case study.
A Case Study
Robert, David, and John, college graduates and founders of RDJ Engineering Services Private Limited, established their manufacturing business approximately 2.5 years ago. The company works in the engineering goods manufacturing. As their business is expanding rapidly, they need funding to buy new machinery and working capital. The cost of the machinery was Rs. 49 lacs (Including GST and installation). The remaining Rs. 26 lacs were required to purchase raw materials and other working capital.
CGTMSE Execution Process
Considering their current requirement in mind, they approached their current banker. However, the current banker insisted on a mortgage, which posed a challenge for Robert, David, and John. Robert, David, and John, being the 1st generation entrepreneurs, had not created the assets at that time. Whatever profits they used to earn, they invested back in the business to scale it. This is shown in their last year’s turnover of Rs. 8.75 crores. After facing rejections from their existing bankers, they were a bit disappointed. They tried to get some advice from colleagues who have already been in the business for the last couple of decades. One of them has suggested Terkar Capital to them.
Hence, they approached Terkar Capital and asked for financial assistance. Our executives analysed their cases in detail and recommended them for Unsecured Funding under CGTMSE. This loan is a scheme of the government of India, which is a perfect fit for their business in MSME, growing faster, but facing a working capital challenge because of a lack of collateral.
Here’s the detailed CGTMSE execution process.
Financial Snapshot
Company Turnover | Rs. 8.75 Crores |
Amount Required | Rs. 75 lakhs |
Amount For Machinery | Rs. 49 Lacs (Including GST) |
The amount for Working Capital | Rs. 26 Lacs |
Mortgage Available | No Mortgage |
Company Industry | Engineering Manufacturing |
CGTMSE Loan Process
CGTMSE (Credit Guarantee Fund Trust for Micro and Small Enterprises) is a trust that provides financial institutions with credit guarantees to provide loans to SMEs and MSMEs. The CGTMSE scheme primarily envisages the provision of loans to first-generation entrepreneurs so that they can flourish in a competitive environment without the burden of security or third-party guarantees, and so on.
After receiving all the required inputs from RDJ Engineering Services Private Limited, our team of experts took this assignment ahead. We arranged for the prerequisite and took the soft approval from a couple of financial institutions that can justify RDJ Engineering requirements from both the current and long-term perspectives.
We executed the whole operational and documentation process in 3 working days. At the end of the week (6th working day), we successfully disbursed the amount of rupees 49 lacs to the RDJ Engineering machine vendor and opened CC exposure of Rs. 26 lacs, which RDJ can use as working capital. And the interest will be paid as and when the funds are used.
Financial Analysis
Business Commencement Year | 2018 |
Amount Disbursed For Machine | Rs. 49 lacs |
Amount Disbursed For Working Capital (CC) | Rs. 26 lacs |
Total Execution Time | 6 Working Days. |
Customer Service Experience | 4/5 |
Funding under CGTMSE at Terkar Capital
At Terkar Capital, we understand the challenges faced by growing businesses like RDJ Engineering Services Private Limited. Robert, David, and John, the entrepreneurs behind the company, were seeking funding to expand their operations and meet their working capital needs. Despite facing rejections from traditional bankers due to a lack of collateral, they turned to us for financial assistance. Our team of experts analysed their case and recommended them for Unsecured Funding under the CGTMSE scheme, which provides loans to first-generation entrepreneurs without the burden of security or third-party guarantees.
Leave us your info
Recent Case Studies
- All Posts
- Case study
