FAQ’s 

An MSME loan serves as a credit solution provided to micro, small, and medium enterprises (MSMEs) to address their financial requirements and facilitate their development. MSME loans cater to both manufacturing and service industries, offering specialized support.

Recent revisions have expanded the limits for these enterprises: small units now encompass investments up to Rs. 10 Crore and turnovers up to Rs. 50 Crore, while medium units extend to investments of Rs. 20 Crore and turnovers of Rs. 100 Crore. Additionally, the Government of India, as of 01.06.2020, further elevated the definition: medium enterprises will now encompass investments up to Rs. 50 Crore and turnovers up to Rs. 250 Crore.

Interest rates for MSME loans are notably lower compared to other loans, simplifying the borrowing process significantly. The loan approval and processing for MSMEs are streamlined, making it easier for businesses to access funds. Additionally, there are instances where the government offers waivers on processing charges, further easing the financial burden for these enterprises.

MSMEs now encompass not just manufacturing but also wholesale, retail, and various other businesses, all eligible for financial benefits aimed at their growth and development.

Any business registered under Udyam registration is eligible to apply for an MSME loan.

Any business registered under Udyam registration is eligible to apply for an MSME loan.

Typically, the documentation needed includes the promoters’ KYC, historical financial records like balance sheets and profit and loss accounts, the MSME registration certificate, and, if applicable, any mortgage-related documents.

Typically, the documentation needed includes the promoters’ KYC, historical financial records like balance sheets and profit and loss accounts, the MSME registration certificate, and, if applicable, any mortgage-related documents.

Subsidies can bolster your business concept, providing a strong foundation for your enterprise and thereby reducing the likelihood of setbacks.

Usually, caste-based schemes encompass various benefits, often providing additional advantages to specific genders within both state and central government schemes. One such scheme, Stand Up India, specifically addresses these considerations.

In general, most subsidies are accessible to MSME-registered units, with manufacturing typically receiving the highest subsidies, followed by service industries. Other types of businesses tend to receive fewer subsidies in comparison.

Indeed, any business can qualify for both Central Government and State Government subsidies.

A unit may qualify for only one central government subsidy, it can receive multiple assistance programs from the state government.

They can be eligible for another PMEGP subsidy, but only after a minimum of three years from the completion of the first subsidy.

Manufacturing and service industries incur additional expenses due to the various technical support, registration requirements, and compliance procedures they must adhere to. To alleviate this burden, the state government offers financial assistance in the form of subsidies.

For a new entity, Udyam registration and KYC documents of the promoters are required, while existing units need to provide previous financial records of the company.

The machinery loan is specifically intended for machinery term loans, purchasing machinery, equipment, and their spare parts. It cannot be allocated to cover any other project expenses. Typically, the machinery loan amount is directly disbursed to the supplier.

Typically, working capital is determined based on turnover, with the initial working capital linked to project finance. For ongoing projects, the working capital can amount to around 20% of the turnover.

You only need to pay one-time processing charges for business term loans or working capital. Afterward, there are only annual review charges associated with these loans.

The processing time typically ranges from one to two months, varying based on the bank, the loan amount, and the necessary documentation and compliance procedures.

Since working capital interest depends on the amount utilized, you only pay for what you’ve used. Efficient utilization with same-day debit-credit transactions might enable utilization without incurring any interest costs.

Banks typically favor collateral security, yet under the Central Government’s CGTMSE scheme, securing working capital without collateral is possible. By leveraging our financial history, we can approach the bank for such loans and utilize them accordingly.

Loan against property doesn’t have a specific defined purpose. In many cases, people use it for personal reasons or for purposes where other loan options aren’t available.

It’s a mandatory compliance aspect for loan sanction, so taking insurance is necessary. Failure to do so might result in a higher interest rate for the loan against property or potential disbursement issues.

If the repayment capacity is insufficient for a single person’s loan, a co-applicant is necessary for a loan against property.

Agricultural land is not eligible as collateral for a loan against property, however all other types of property are considered eligible.

Loan against property is exclusively available for resident Indians. However, non-residents can become eligible if they provide additional security, such as a fixed deposit.

You can benefit from both the capital subsidy schemes of the state and central governments. However, utilizing two state government subsidy schemes simultaneously is not feasible

The notable aspect of the capital subsidy is its availability as a term loan, allowing you to use it as per your business needs. You can even utilize it in your current account. An added advantage is that there’s no specific holding period required for this subsidy.

No, MSME and large & mega large industries have the opportunity to apply for capital subsidy under the state government’s SGST reimbursement subsidy scheme

In most cases, for capital subsidy, the loan needs to be sanctioned first. After production commences, the disbursement can then be utilized.

The involvement of nodal agencies in capital subsidy comes into play mainly when the subsidy amount is substantial. This ensures better administration and compliance. Otherwise, nodal agencies generally don’t have a role in capital subsidy.

The Electric Duty Subsidy in Gujarat is exclusively designed for manufacturing businesses registered within the state’s boundaries

No specific startup criteria are mandated; having a manufacturing unit is sufficient to qualify for subsidies in both new and expanding business enterprises

The eligibility to apply for the electric duty subsidy starts three months after the commencement of production. Subsequently, businesses can claim this subsidy for up to five years from the date of eligibility.

To avail the benefits of the electric subsidy, businesses need to engage with the Gujarat Electricity Board and the associated service providers in the electricity sector.

The eligibility for the electric subsidy in Gujarat is tied to businesses specifically operating within the state’s boundaries. If an individual has multiple businesses spanning different states, only the businesses located within Gujarat would qualify for this subsidy.