Are you running a small business? Or you want to start a new business or have some other plans to do so, then this article might be helpful for you. In this article, you will know how to organize a mid-sized Business? And about MSME loans, Small Business Loans and CGTMSE. So that, you can Apply for the loans when you are in need for your business.
Organizing a Mid-sized Business
There are important things that one should have to maintain for organizing a mid-sized business, which are as follows:
- Having good communication skills, which makes the audience more attracted to your business.
- Simple and good follow up of tasks and teams.
- Ability to handle daily and strategic problem easily and efficiently.
- Establishing and documenting processes and systems (Writing the plans in a proper way before doing something and discussing with the expert teams and consultants).
- Ensuring work efficiency, well organized future plans, making the business less prone to errors.
These are the loans offered by several Financial Institutions so that the borrower can Fulfil his or her business-related needs and expenses. MSME Loans are lent only under some eligibility criteria, which, the borrower needs to meet. The loan is lent under Indian Government and RBI. Some government schemes are also there which offers such loans:
- Credit Guarantee Funds Trust for Micro and Small Enterprises (CGTME)
We will be discussing about this later in this article.
- Prime Minister’s Employment Generation Programme (PMEGP)
- Micro Unit Develop and Refinance Agency (MUDRA)
The above- mentioned Schemes have their own criteria which the borrower needs to meet to enjoy the benefits extended the Schemes. Some of its criteria includes:
- The Business should have been in operations for more than 6 months.
- Minimum Turn over of Rs. 90,000.
- Business Should not be listed under blacklisted list of SBA finance.
Small Business Loans
The Small Business Loans, also known as Commercial Loans are the loan especially for business investments. These loans are mostly referred as unsecured or sometimes may be secured by collateral, based on the amount required, the loan type or the relation between the lender and the borrower. The small businessmen prefer these loans for their needs as small business loans are faster to approve, less paper works and documentation required and there is no collateral for an unsecured small business loan.
One can Apply for this online also. Same as other loans the Small Business Loans have some Eligibility Criteria that one has to meet before applying for the loans which are as follows:
- The borrower should be a Self-employed professional, retailer, manufacturer or a trader.
- The borrower should be 21 or 21+ years old.
- The maximum age should be 65 years at the time of loan maturity.
- The borrower’s last year’s turnover should be at least 10,00,000 INR.
- An ITR of more than 2,50,000 INR in Past year.
- The business for which the borrower is applying for the loan should be more than 3 years of operation and the borrower himself or herself should have an experience of more than 5 years.
As we mentioned above about CGTMSE (Credit Guarantee Funds Trust for Micro and Small Enterprises). It is a trust jointly introduced by the MSME, Small Industries Development Bank of India under Government of India. Unlike other loans these loans have different criteria for loans and its interest rates.
The interest rates of these loans offered by the bank depends upon the applicant’s profile, business requirements and expenses. It also guarantees repayment of 75% or 85% of upto 50,00,000 INR in some cases for the defaulted principal loan. The entities and institutions that are eligible to avail loans under this scheme are as follows:
- The maximum credit amount is 50,00,000 INR along with a guarantee of cover not exceeding 62,50,000 INR
- It has excluded some entities for the scheme’s coverage
- Retail Trade
- Educational Institutions
- Agricultural Purposes
- Self Help Groups (SHG)
- Training Institutions.
Now, we hope that you caught all important features and criteria of these loans. Now its upto you, which one is convenient for you and your business.