MSME (Micro, Small and Medium Enterprises)
As per Micro, Small and Medium Enterprises Development (MSMED) Act, 2006.
Enterprises which are engaged in the manufacture or production, processing or preservation of goods where
- 1. A micro enterprise is an enterprise where investment in plant and machinery does not exceed Rs. 25 lakh;
- 2. A small enterprise is an enterprise where the investment in plant and machinery is more than Rs. 25 lakh but does not exceed Rs. 5 crore;
- 3. A medium enterprise is an enterprise where the investment in plant and machinery is more than Rs.5 crore but does not exceed Rs.10 crore.
Further in the Act Enterprises engaged in providing or rendering of services and whose investment is there in equipment is defined as
- 1. A micro enterprise is an enterprise where the investment in equipment does not exceed Rs. 10 lakh;
- 2. A small enterprise is an enterprise where the investment in equipment is more than Rs.10 lakh but does not exceed Rs. 2 crore;
- 3. A medium enterprise is an enterprise where the investment in equipment is more than Rs. 2 crore but does not exceed Rs. 5 crore.
MSME loans are mostly offered to new business and small business owners. The MSME loan’s repayment tenure varies from lender to lender and the interest rates offered are majorly based on the loan amount, applicant’s profile and business history. MSME loans are also offered to new business by government with the help of various schemes. Government Schemes that come under MSME loans for new business include Mudra Loan, CGTMSE etc. These schemes ensure that the new and existing entrepreneurs in the country get the necessary financial support and funding for their businesses.
MUDRA (Micro Unit Development and Refinance Agency) Scheme was initiated to provide support to the small business owners. MUDRA Yojana is further classified between three categories named as Shishu, Kishore and Tarun.
In the Shishu category, an MSME loan for new business is provided up to Rs. 50,000 to a new business enterprise.
In the Kishore category, MSME loan for new business is provided up to Rs. 5 lakh is provided to the companies that have been running for certain period and want expand.
In the Tarun category, the MSME loan for new business is provided up to Rs. 10 lakh to companies that are already established but want to grow more.
The maximum repayment of MSME loan for new business tenure is of 60 months for all Mudra loan categories.
CGTMSE (Credit Guarantee Funds Trust for Micro and Small Enterprises) was introduced to establish credit relief to the promoters and provide them with a better credit flow for the MSME sector. The main benefit of CGTMSE scheme is that the MSME loan for new business is backed without any external collateral or third party guarantee. Moreover under this scheme, both new and existing MSME, including service enterprises are eligible for a maximum credit of Rs. 2 Cr.
The above Schemes are designed in such a way that any person from any part of India can avail the benefit of MSME loan. This is done to promote new business which can lead to overall economic growth of a country. MSME loan for new business in India is a major step towards employment generation which can make a country self dependent.
The process of obtaining MSME loan for new business is lengthy. First we need to Search for the different lenders who offer MSME loan for new business. Then we need to fill online application. After that we need to upload the required document. Finally lender will process the application and verify the provided information and documents. And only if he finds that the information provided is correct only then loan is granted.
To get rid of all this process we have many MSME loan Consultant which can provide services to make life of the promoters easy. The promoters only need to submit the document and after that the MSME loan Consultant will make sure that the funds are being sanctioned and in the hands of promoters on time.
MSME loans are generally given to startup owners, small business owners and women entrepreneurs on a short-term basis. The duration of MSME loans varies from lender to lender. As MSME loans for new business are unsecured MSME Loans, there are some minimum eligibility requirements in order to reduce the risk for lenders. Because it is important to receive money on time otherwise there is no use of funds. For example MSME loan for new business in Gujarat are taken mainly with the intention of doing seasonal businesses now if the loan applicant do not receive money on time then the season might lapse. Thus on time delivery of loan amount is necessary.
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MSMEs require loans to meet fund for their various activities, starting from their inception to the expansion. Piyush J. Shah & Company is an expert and experienced MSME loan consultant in Gujarat. We are a reliable source for MSME loans to start as well as expand all types of businesses. Are you looking secure loans from genuine sources? Contact us today; we can arrange loans from the leading banks and financial institutions that are popular in your area. We have several clients who have availed MSME loan for new business in Gujarat. You are also welcome to our service to find sufficient fund for your dream business.