SIDBI (small industries development bank of India), ministry of small, micro and medium enterprises and government of India launched a trust on 30 August 2000, known as CGTMSE (credit guarantee trust for micro and small enterprises). The scheme offers credit guarantee to the moneylenders who provide SME and MSME loan for new business.
CGTMSE focuses to intends to boost small businesses. The scheme helps small business, finance their requirements with collateral-free loans. The trust includes features, like:
75-80% of coverage if the business is owned and operated by a woman.
Candidates can avail up to Rs.1 crore business finance, depending upon their repayment capacity
Procedure to avail the loan:
Step1: Register the business: The borrower should get his/her firm registered. The applicant needs to obtain the required license and permission from the government authorities. The start-ups need to apply for a business PAN (permanent account number) card and a current bank account.
Step2: Prepare the plan accordingly: A high-level business plan is crucial to get the approval of the lender to the loan application. The plan needs to be accurate; and robust. The loan applicant must have the perfect ROI (return on investment), market analysis and break even plan in place. Information and data provided should be adequate and authentic.
Step3: Apply for the CGTMSE
After comparing different lenders, the borrower can now for the loan. Once the loan amount is sanctioned then the lender that is selected by the borrower can apply for the CGTMSE. The stringent application procedure requires the candidates to be well prepared to avail loan under CGTMSE. A professionally crafted business report, data, a great vision, and a viable business plan, can help with quicker acceptance of loan application.