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CGTMSE Loan Case Study

Let’s understand how the loan under CGTMSE scheme works.

Robert, David, and John graduated from college. They started their own Manufacturing Business called ‘RDJ Engineering Services Private Limited’ around 2.5 years ago. The company works in engineering goods manufacturing. As their business is expanding rapidly, they are in need of 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.

Considering their current requirement in mind, they approached their current banker. However, the current banker needed a mortgage. And Robert, David, and John being the 1st generation entrepreneurs have not created the assets by this time. Whatever the profits they used to earn, they invested back in the business to make it big. This is shown in their last year’s turnover of Rs. 8.75 crores.

After getting rejections from their existing bankers, they were a bit disappointed. They tried to get some advice from colleagues who are already in the business for the last couple of decades. One of them has suggested, Terkar Capital to them. They approached Terkar Capital and asked for financial assistance. Our executives analyzed their case in detail and recommended they take a CGTMSE — The unsecured Funding. This loan which is a scheme of the government of India is a perfect fit for their business in MSME growing faster but facing a working capital challenge because of lack of collateral. How to get a loan under the CGTMSE scheme?

Business Highlights

Company TurnoverRs. 8.75 Crores
Amount RequiredRs. 75 lakhs
Amount For MachineryRs. 49 Lacs (Including GST)
The amount for Working CapitalRs. 26 Lacs
Mortgage AvailableNo Mortgage
Company IndustryEngineering Manufacturing

The procedure

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 who can justify RDJ Engineering requirements from the current as well as long-term perspective.

We executed the whole operational and documentation process in 3 working days. And at the end of the week (6th working day), we were successfully disbursed the amount of Rs. 49 lacs to 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.

Business Analysis

Business Commencement Year2018
Amount Disbursed For MachineRs. 49 lacs
Amount Disbursed For Working Capital (CC)Rs. 26 lacs
Total Execution Time6 Working Days.
Customer Service Experience4/5

CGTMSE Loan at Terkar Capital

CGTMSE is one of the most beneficial schemes of the Government of India for SMEs and MSMEs. The process of applying for a CGTMSE Loan can be confusing and difficult for some businesses. But, no worries! We can arrange and execute the whole process of a CGTMSE Loan without any hassle. We are the leading Corporate Financial Advisory and Consulting firms in India, to avail of loans under the CGTMSE scheme.

Once you approach Terkar Capital, we will discuss your requirements with you and start the process accordingly. Our Subject Matter Expertise will handle all corners of the fundraising process, right from documentation to the disbursement of the funds to your account. Even after the disbursement, we maintain our relationship with the clients and assist them if any issues arise.

Learn more from CGTMSE scheme FAQs.

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