MSMEs Loan

 

MSMEs are recognized under the Micro, Small and Medium Enterprises Development (MSMED) Act, 2006 enacted by the Government of India. As the name states, the definition of MSMEs consists of Micro, small, and medium scale enterprises. Here are some frequently asked questions by our customers about MSMEs:

What is meant by MSME?

MSME is the Micro, Small and Medium Enterprises. MSMEs today are the backbone of the Indian economy. This sector contributes to 45% of India’s Total Industrial Employment and 50% of India’s Total Exports. More than 6000 types of products are manufactured in the MSME industries presently. When these industries grow, the economy of the country will also flourish.

What is the MSME loan?

Various financial institutions offer Unsecured Loans to MSMEs to meet various business-related expenses.  These MSME loans have certain eligibility criteria that the applicant should fulfill. The Reserve Bank of India (RBI) and the Government of India define MSME loans as loans for businesses to support them in terms of infrastructure, finance, and such other areas. 

There are certain government schemes under which certain financial institutions offer loans. For instance, Credit Guarantee Funds Trust for Micro and Small Enterprises (CGTMSE), Prime Minister’s Employment Generation Programme (PMEGP), Micro Unit Development and Refinance Agency (MUDRA Loan) and so on. 

Eligibility Factors for an MSME Loan

  • The applicant of the MSME loan should be aged above 25 years.
  • The business should be across the service or manufacturing sector in order to avail of the MSME Loan.
  • The investments in the service sector should not exceed Rs. 5 crores, in order to be eligible for the MSME loan.
  • The business should have been in operation for more than six months if the fund is borrowed for business expansion.
  • The business set up should not be in the blacklisted categories.

What are the benefits of MSME Loans?

  • Hassle-Free Loan

An MSME Loan is very accessible. The documentation for an MSME loan is minimal and the financial institutions generally disburse the loan faster. As the processing time for these loans is less, you can get an MSME loan with no hassle.

  • Lower Interest Rates

The MSME loan interest rate is lower as compared to other loans. The MSME loans thus give competitive advantages due to lower interest rates.

  • No Collateral

MSMEs generally do not have several assets which they can give as collateral while taking a loan. This may also be risky for them. Thus, MSME loan without collateral is beneficial.

  • Short term

MSME loans are generally given for a short period of time. The MSMEs use these loans to fulfill their short term needs and thus do not have a burden of any long term commitment. 

  • Avoid relinquishing control

Sometimes some investors are ready to help the MSMEs financially but ask for controlling a part of the company in return. But MSME loans are specially designed so that the MSME owners do not have to relinquish their control of the company.  

COVID 19 Special packages for MSMEs

On 13th May 2020, the government announced a COVID19 Relief package for the MSMEs. Here are some key points from the announcement for the MSMEs:

  • Banks and NBFCs to provide Emergency Credit Line to MSMEs to up to 20% of entire outstanding credit as on 29.2.2020
    • Eligible Borrowers: Up to Rs 25 crore of the outstanding loan and up to Rs 100 crore of turnover
    • The tenure of the loan is 4 years with a 1-year moratorium
    • 100% credit guarantee cover by the government to Banks and NBFCs.
    • Interest Capped and No Guarantee Fee
    • Scheme available till 31st Oct 2020
  • Subordinated Debt along with partial guarantee support from government to banks for providing Rs 20,000 crore subordinated debt to stressed and NPA MSMEs. The government took the risk to cover up to the first 20% of the loss.
  • Fund of Funds with a corpus of Rs 10,000 crore to be set up to provide equity funding support to MSMEs with high growth potential
  • Global Tenders for any government procurement of up to Rs 200 crore disallowed which means more opportunity for domestic MSMEs
  • All MSME receivables from Government and CPSEs to be released in the next 45 days.

Government MSME Schemes

Credit Guarantee Funds Trust for Micro and Small Enterprise or CGTMSE

CGTMSE was launched in 2000 and is an initiative by the MSME. This scheme provides credit guarantee to financial institutions that provide loans to MSMEs.The loans are granted for a maximum amount of Rs 1 crore. 

We at Terkar Capital, understand client requirements for working capital. We arrange everything required for the getting the CGTMSE funding from the best available financial institutions. 

Loans for MSMEs

  • Unsecured Business Loans

    Sometimes MSMEs do not have sufficient assets to provide as collateral while taking loans from a financial institution. Unsecured Business Loans are given by financial institutions without the requirement of collateral. These loans are generally approved on the basis of the track record of the business and such other factors.

    Terkar Capital is one of the best financial firms in Pune. We provide hassle-free unsecured business loans and are one of the most modernized and highly specialized unsecured business loan facilitators in India. Our executives are well trained to speed up the procedure and assist in compiling the documentation. 

  • Machinery Loans

    Machinery is required by many businesses to do specific tasks at a faster rate. However, machinery is expensive and most SMEs cannot afford it with their budget. Therefore, taking a loan particularly for the machinery helps these businesses significantly as they can buy the required tools and equipment which increases their overall productivity. These can be obtained in any sector like construction, manufacturing, and so on.  

    Terkar Capital is a top financial institution in Pune, and we focus on providing our clients with the most benefiting machinery loans. We help the client right from application to documentation, eligibility, and so on. The borrower is explained everything about the loan until the repayment plan, and the procedure commences, only when the picture is clear at both ends.

Why Terkar Capital?

Terkar Capital is one of the best financial firms. We understand the customer, their financial strengths and weaknesses, and then suggest the best financial solutions. We help you with arranging MSME Loans in Pune and beyond. Terkar Capital is one of the most modernized and highly specialized MSME loan facilitators in India. The executives are well trained to speed up the procedure and assist in compiling the documentation. With our thorough assistance and guidance, we help you choose the right repayment structure and suggest you with the type of loan you should go for. 

For More Details Please contact our Experts

If you have any questions, please do not hesitate to ask us. Please also call us or email us before visiting to make sure that you will be served with our best services.

8308629820 / 8262831330
yes@terkarcapital.com