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CGTMSE Loan

Apply for Unsecured funding under CGTMSE

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    Loan under CGTMSE

    Being a developing country, India has quite a number of micro and small enterprises. Considering this particular scenario of the Indian economy, the Government of India has introduced CGTMSE Scheme. There are several perks to this scheme as well. It has benefitted most of these enterprises in building their business and renewing them. 

    There is much more to the CGTMSE scheme. The population of youth in India is pretty high. It has even encouraged aspiring entrepreneurs to give a push to their ideas and establish a firm. So, in India, there are mainly manufacturing companies that fall under the SMEs. Thus, it is a sector where the CGTMSE scheme has majorly demonstrated its good work.

    Apply for Unsecured Business Loan up to 2 Crores under CGTMSE at ease.

    CGTMSE Loan

    The Government of India introduced the CGTMSE scheme in the year 2000. 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 MSE. The scheme focuses on providing credit guarantees to financial institutions providing loans to MSMEs. The applicant owning an MSE get a CGTMSE loan under this scheme. So, it does not require the applicant’s business person to possess collateral. Although, there are certain eligibility criteria that the candidate needs to match. 

    Advantages of the loan under CGTMSE

    • The scheme also aims at strengthening the credit lending facility overall.
    • CGTMSE scheme introduces a ‘Hybrid Security’ product. It allows the borrower to get a guarantee on that portion of the credit facility not covered by the collateral security.
    • Under this scheme, the government helps to extend the credit facility up to Rs. 2 crores.
    • Guarantee cover will exist until the total tenure of the loan credit.
    • The scheme aims to acquire term loans & working capital utilities from the same organization.

    FAQs

    • The government of India and SIDBI introduced the CGTMSE scheme. It is to help first-generation entrepreneurs to erect their businesses.
    • The scheme also aims at strengthening the credit lending facility overall.
    • CGTMSE scheme introduces a ‘Hybrid Security’ product. It allows the borrower to get a guarantee cover on that portion of the credit facility which is not covered by the collateral security.
    • There will be charges for primary and collateral security.
    • The primary objective of this scheme is to inform the lender about the importance of the project. Also, it’s viable to secure it with a credit facility.
    • This initiative was launched to help small businesses grow in a competitive market.
    • This scheme lets people with minimal or no experience in setting up a business acquire a credit cover.
    • A credit facility is based on primary security and other financial assets.
    • Guarantee cover will exist until the total tenure of the loan credit.
    • The scheme aims to acquire term loans & working capital utilities from the same organization.

    To acquire a loan under this scheme, an applicant has to meet the parameters. Those should list under the CGTMSE scheme eligibility criteria. Also, remember that these criteria may differ from case to case.

    Some of the essential criteria are as follows:

    • The applicant must own a business that can be categorized as a Micro and Small Enterprise.
    • Even small and medium-sized manufacturing units are eligible under the scheme.
    • The Business must have at least 3 years of business continuity.
    • All types of manufacturing and service sector companies can avail of 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.

    The application for the loan has been made to the banks. So, the eligible financial institutions provide loans under the CGTMSE scheme. Government and private banks are involved in the scheme. It is spread out even to the rural areas. The application is made only if the candidate is eligible for a CGTMSE loan. The documents required for the processing of the loan will differ from case to case. Thus, general steps in acquiring a loan under the CGTMSE scheme can be listed as follows-

    Start your business

    This includes registering your business. Starting the required bank account. And completing other formalities to start your business.

    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.

    Apply for the sanction of a loan

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

    Get the CGTMSE coverage

    Once your loan is sanctioned, the institution or bank will apply to the respective CGTMSE scheme. Upon approval, you can acquire the loan by paying the necessary service charges and CGTMSE charges.

    Learn more about the CGTMSE scheme through FAQs.

    Documents Required

    The requirement of documents varies from lender to lender. Also from case to case. However, in all scenarios, there are a standard set of documents. Those are as follows.

    • A copy of PAN Card.
    • Proof of Address: (Passport Copy / Aadhaar Card / Electricity Bill / Registered Rent Agreement)
    • Statutory documents
    • Shop Act
    • GST Registration Certificate
    • Udyog Aadhaar Memorandum
    • VAT Registration
    • GST certificate
    • other Registrations Applicable.
    • 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.

    Registered Partnership Deed

    In Case of LLP

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

    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.

    Property Documents

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

    Let’s understand the CGTMSE Loan Process from the case study.

    CGTMSE Loan at Terkar Capital

    Terkar Capital is a trustworthy financial institution that provides hassle-free unsecured funding up to 2 crores under CGTMSE. We assist the borrower to know in detail about the scheme. Also, help in making the most suitable choice. Thus, we respect the relationship even after the loan. We ensure the satisfaction of the borrower with the loan and the services.