CGTMSE Loan scheme
All the emerging businesses in India, be they micro, small, or medium are in constant need of finances. Such a need can arise due to several reasons such as expansion, purchase of heavy machinery, payment to creditors, working capital issues, or paying off business dues. But many times due to less knowledge of finance they do not receive proper guidance on the cause. Hence, we at Terkar Capital come into the picture for providing consulting on raising finances. We have a variety of products available in secured funding as well as unsecured funding based on the requirement of the borrower. CGTMSE loan scheme can be the best option for Small and Mid-size enterprises to raise finance which acts as a major source of funds for them.
CGTMSE loan scheme Features
- The initiative was launched to help small businesses grow in a competitive market and assist entrepreneurs to build their businesses and avail of collateral-free loans easily and conveniently.
- The scheme also aims at strengthening the credit lending facility to developing industries and helping them raise funds for the same.
- Being a collateral-free loan, the process is quite quick and convenient.
- It has the facility of guarantee cover for their lenders which will cover their loss in case of default by the borrower. The guarantee cover will exist until the total tenure of the loan credit.
- The guarantee coverage of the scheme ranges from 70-85% in case of non-payment by the borrower.
- CGTMSE has a guarantee cover of 50%/75%/80%/85% as per the diverse eligibility criteria.
- The maximum number of funds availed in this scheme is Rs. 200 Lacs.
- CGTMSE provides good guarantee covers to North East Region Women Entrepreneurs as well and encourages them to expand their businesses.
The rate of interest may differ as per the market conditions
Procedure for CGTMSE loan scheme
1. Prepare a project report/ business plan
The crucial step is preparing the project report or a business plan. It has to be submitted to the lending company. Here the lending company will scrutinize whether the company is eligible under the scheme or not.
2. Scrutiny of documents
The lending institution or company will do a thorough investigation of the required documents and proceed with loans.
3. Sanction the loan
The lender will sanction your loan after duly verifying your documents.
4. Obtain CGTMSE cover
Once the loan is sanctioned by the bank, the bank will apply to the CGTMSE organization and obtain CGTMSE loan scheme cover for the loan sanctioned. After obtaining the loan, the customer will have to pay services charges or fees as per the requirement.
Learn the process of CGTMSE Funding.
Eligibility for CGTMSE (Borrower)
1. The applicant must be categorized as micro and small enterprises.
2. CGTMSE cover is available for Loans to Micro and Small Enterprises (MSE) engaged in manufacturing or service activities.
3. CGTMSE cover is not available for loans to enterprises engaged in retail trade, educational institutions, training centers, self-help groups, and agriculture.
4. The business must have at least 3 years of continuity.
Eligible Lending Institution:
CGTMSE has designated Member Lending Institutions (MLI) which can provide loans to MSMEs. In this list, there are Government Banks, Scheduled Commercial Banks, Regional Rural Banks, NBFCs, Financial Institutions, etc. who have signed an agreement with the CGTMSE ministry.
Why Terkar Capital?
The article highlights business funding needs for emerging businesses in India. To have access to finances for various reasons such as expansion, working capital issues, and paying off business dues. However, Terkar Capital arranges financial products for businesses to raise finances through a variety of secured and unsecured funding products. The CGTMSE loan scheme is a collateral-free loan option available for small and mid-sized enterprises to raise funds easily and conveniently. So, avail the funds you need for your business situations with Terkar Capital’s financing solutions.