MSME Loan Scheme

When applying for the loan at a physical location, you only deal with one lender. You may need to schedule an appointment if you apply for a loan in person. You may be stuck in a line. To get to the lender's physical location, you may have to travel for a while.

Keep in mind that business loans can be utilized to start a new firm or expand existing ones (expansion, diversification, modernization, technology up-gradation). These are used for several things, including:

  • Acquisition of a factory, as well as land and building space,
  • Plant and machinery purchases, such as laboratory and testing equipment, furniture, and electrical fitting
  • Managing working capital requirements, including raw materials, work-in-progress, and finished goods, among other things
  • Bill Discounting (Trade Finance) is a method of paying creditors while waiting for debtors to pay.
  • Launching a new product, expanding a firm, requiring warehouse space, marketing, and advertising credit
  • Additional monitoring assistance is available for any cause that meets the criteria.

Micro, Small, and Medium Enterprises (MSME) are divided into two categories

• Manufacturing companies are engaged in manufacturing or producing items for any industry or Adding value to a finished product by giving it a unique name, character, or application.

• Service businesses are those that provide or render services.

Important Documents

  • Statement from the bank (12 months)
  • Evidence of business registration
  • PAN Card copy of the Proprietor(s)
  • Aadhar Card Copy Proprietor(s)
  • Copies of Partnership Agreements
  • Copy of the company's PAN card

The Indian government provides subsidies and incentives.

The Government of India offers a variety of subsidies and incentives to encourage a thriving business. It is critical for every entrepreneur or promoter who is launching a new business or expanding an existing one to be aware of the subsidies and incentives available when incurring capital expenditure to lower capital costs, lower interest burdens, and achieve break-even sooner.

Udyog Aadhaar (UA)

MSMEs must get a Udyog Aadhaar Memorandum (UAM) for their operating units. For upcoming units, it is not required. To register as an MSME under UAM, you can contact directly to the TaxDraw team.

Having Liquidity Issues
  • MSMEs encounter challenges in securing sufficient funding, particularly converting trade receivables into liquid funds. Although the MSMED Act of 2006 requires payments to MSMEs within 45 days of acceptance of goods and services, the challenge of timely realization of receivables persists.
  • TReDS is a multi-financier online electronic institutional system for easing the financing of MSMEs' trade receivables. Through an auction system, the TReDS Platform would enable MSME Sellers to discount invoices/bills of exchange against significant corporates, including government departments and PSUs, to ensure the quick realization of trade receivables at competitive market prices.
  • MSMEs profit from on-time payments in a transparent system at meager prices. In the long run, ensuring regular financial flows improves the MSME sector's excellent quality of products and processes.