#What is CGTMSE Loan

[kupwaratimes-fan]

What is CGTMSE Loan? Watch Video!!!

What is CGTMSE Loan? Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) is jointly set up by Ministry of Micro, Small & Medium Enterprises (MSME), Government of India and Small Industries Development Bank of India (SIDBI) to catalyse flow of institutional credit to Micro & Small Enterprises (MSEs). Credit…

[cityfinadvisors]

Preparing your business for Msme Loans? Essential things to consider

Are you exploring Msme loans to drive your business's expansion? These loans are crafted to nurture the progress and evolution of Micro, Small, and Medium Enterprises (MSMEs). These loans provide a range of benefits, including decreased interest rates, adaptable repayment schedules, and personalized financing solutions designed to cater to the distinct needs of small businesses. 

However, there's more to Msme loans than meets the eye. Adequate preparation is vital to enhance your approval odds and ensure you secure the necessary financing for your business.

Here are the essential steps you should take to prepare your business for the Msme loans application:

Understanding eligibility criteria 

First of all, familiarize yourself with the eligibility criteria set by the lenders for Msme loans. It may include the business’s annual turnover, operational years, and compliance with regulatory requirements. 

At Cityfinadvsiors, Our services cater specifically to established clients who possess a minimum of 3-5 years of experience. We primarily focus on clients with a turnover exceeding Rs 100 Cr and loan requirements ranging from Rs 5-50 crs.

Evaluate collateral requirements 

Some Msme loans may require collateral to secure the financing. Evaluate your assets to determine what collateral you can offer to lenders. Alternatively, explore loan options that offer unsecured financing if you're unable to provide collateral.

At Cityfinadvisors, we assist businesses in leveraging the benefits of CGTMSE, which provides collateral-free loan guarantees, easing the burden on businesses without significant assets to pledge.

Preparing financial projections 

Develop comprehensive financial projections for your business to support your loan application. Include forecasts for revenue, expenses, cash flow, and profitability for the loan tenure. 

At Cityfinadvisors, we help you compile crucial reports such as Techno-economic viability reports (TEV), offering insights into your business's financial well-being and future growth prospects.

Document organization 

Ensuring proper organization of documents is imperative for the loan application process. This includes arranging essential paperwork such as business registration certificates, tax returns, bank statements, and other pertinent financial records.

Cityfinadvisors offers document management services to ensure all required paperwork is in order and submitted accurately and promptly.

Contact Cityfinadvisors for the best Msme loan options 

Not just this, Cityfinadvisors provides ongoing support and assistance to businesses, ensuring they stay informed and engaged throughout the loan application journey.

Connect with us at +91 9873723143, and let's collaborate. Explore further details on our offerings at www.msmefunding.com. 

[kanakkupillai07]

Trademark Registration Fees in India for MSME: What You Need to Know

Small and medium-sized enterprises (SMEs) play a critical role in the Indian economy. MSME registration in India has become an essential tool for such businesses, offering a range of benefits such as financial assistance, subsidies, and exemptions. In this article, we'll discuss how to make the most of MSME registration benefits.

What is MSME Registration?

Before we delve into the benefits of MSME registration online, it's essential to understand what it entails. MSME stands for Micro, Small, and Medium Enterprises. The Indian government introduced this registration to facilitate the growth and development of such businesses in the country. MSME registration India is a voluntary process that can be done online or offline.

Who is eligible for MSME Registration?

Any business in India that meets the following criteria is eligible for MSME registration :

Micro Enterprises: An enterprise with an investment of up to Rs. 1 crore and a turnover of up to Rs. 5 crores.

Small Enterprises: An enterprise with an investment of up to Rs. 10 crores and a turnover of up to Rs. 50 crores.

Medium Enterprises: An enterprise with an investment of up to Rs. 50 crores and a turnover of up to Rs. 250 crores.

MSME Registration Process:

The MSME registration process is straightforward and can be completed in a few easy steps:

Visit the official website of the Ministry of Micro, Small and Medium Enterprises.

Fill in the necessary details, such as the name of the enterprise, PAN number, and Aadhaar number.

Submit the required documents, including proof of address, bank details, and business registration documents.

Pay the registration fee, which is nominal.

MSME Registration Documents Required:

You will need to provide the following for the MSME registration documents required:

Aadhaar card of the owner

PAN card of the owner

Business registration documents

Bank account details

Proof of address

MSME Registration Benefits:

Now that we have a clear understanding of MSME registration let's discuss its benefits:

Financial Assistance:

MSMEs can apply for financial assistance from the government and financial institutions. The government provides various schemes, such as the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) scheme, to offer financial assistance to MSMEs. MSMEs can also apply for loans from financial institutions, such as banks, at a lower interest rate.

Tax Benefits:

MSMEs are eligible for several tax benefits, such as exemptions from GST registration, income tax, and capital gains tax. Additionally, MSMEs with a turnover of up to Rs. 5 crores are eligible for a composition scheme, which allows them to pay a lower rate of tax.

Access to Government Tenders:

MSMEs registered with the government are eligible to apply for government tenders, which can be a significant source of revenue. The government has also reserved a specific percentage of tenders for MSMEs to encourage their participation.

Trademark Registration Fees:

MSMEs are eligible for a discount on trademark registration fees in India. The fee for a trademark application is Rs. 9,000, but MSMEs only have to pay Rs. 4,500.

Tips to Make the Most of MSME Registration Benefits:

Now that you know the benefits of MSME registration let's discuss how to make the most of them:

Maintain Proper Records:

To access financial assistance and tax benefits, it's essential to maintain proper records of all business transactions. This includes maintaining records of all purchases, sales, and expenses.

Apply for Government Schemes:

MSMEs should explore and apply for various government schemes to avail financial assistance and subsidies. The government offers several schemes that are specific to various industries, such as the Technology Upgradation Fund Scheme (TUFS) and the Credit Linked Capital Subsidy Scheme (CLCSS).

Participate in Trade Fairs:

Trade fairs are a great platform for MSMEs to showcase their products and services to potential customers and investors. The government also conducts various trade fairs and exhibitions, where MSMEs can participate and interact with potential buyers and investors.

Utilize Online Marketplaces:

With the increasing use of the internet, online marketplaces have become a popular platform for businesses to sell their products and services. MSMEs can leverage these marketplaces to expand their reach and customer base.

Conclusion:

MSME registration offers several benefits to small and medium-sized enterprises in India. Financial assistance, tax benefits, access to government tenders, and trademark registration fee discounts are some of the significant benefits that MSMEs can avail themselves of. By maintaining proper records, applying for government schemes, participating in trade fairs, and utilizing online marketplaces, MSMEs can make the most of these benefits and drive their growth and development.

FAQs:

1.How long does it take to get MSME registration?

Ans: The MSME registration process usually takes 2-3 working days.

2.Is MSME registration mandatory for businesses in India?

Ans: No, MSME registration is voluntary.

3.Can a business have multiple MSME registrations?

Ans: No, a business can only have one MSME registration.

4.How long is the validity of MSME registration?

Ans: MSME registration is valid for a lifetime.

5.Is MSME registration applicable to all industries?

Ans: Yes, MSME registration is applicable to all industries, including manufacturing and service sectors.

[yesqolaris-blog]

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Allow us to introduce to you our offered services. We are a associate Trade non depository financial institution that facilitates the issuance of monetary instruments like Letters of Credits, Bank Guarantees, Standby Letters of Credit, etc. using our own credit limits with our issuers that help our clients from a various array of industries achieve smoother business transactions tailored to their needs. We have enclosed our detailed procedures below for your ready reference. do you have to have an interest and would really like to understand more, please don’t hesitate to reply on this email so I can assist you. Or if you have got a network which may interest us, do allow us to know and we’ll see the chance of working together. For further inquiries, you’ll also reach me on my mobile and WhatsApp no. +91-9811993953 , +91-8700237256 We, Qolaris Solutions Pvt Ltd offers a large range of products: ·       Letters of Credit at Sight ·       Usance Letters of Credit ·       Standby Letters of Credit ·       Bank Guarantees ·       Performance Guarantees ·       Demand Guarantees ·       POF Messages ·       Pre-Advice Message ·       Comfort Letters ·       Ready Willing and Able (RWA) Messages Issuers for LC at Sight; Calls for limits and restrictions.

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Bank Winter Stern International Bank Standard Commerce Bank Anametrics Crown Financial banking company Issuance Procedure: We need the subsequent documents/ information for finalizing the draft – 1.       Filled in Contact Us Form 2.       Verbiage required within the instrument for SBLC & BG / Proforma Invoice for DLC 3.       Trade license of your company 4.       Share Holders List 5.       Passport copy of main applicant 6.       Three years audited record 7.       Six months latest bank statements Step-wise 1.       After acquiring all the above documents / information, we’ll select the issuing bank / financial organisation and finalize the draft for your review. 2.       Upon receiving the text of the instrument, you need to thoroughly review the draft for any corrections, additions or removal of data. Should there be any amendments, we are able to amend the draft accordingly to match your preferences. Once the draft is approved, you’ll must send us a duplicate of the draft with sign and stamp thereon as your approval. 3. we are going to raise the invoice for the agreed charges (charges include margin money, processing fee and professional charges) and you’ll make the remittance against the invoice. 4.       Only after we receive the payment for the raised invoice, the Issuing Bank / establishment will issue and relay the instrument through swift within 48-96 hours after remittance. 5.       Simultaneously we are going to send you the issued copy through email for your reference and record. Note: the costs will rely onthe worth of the Financial Instrument, Tenure, Issuing Bank / institution. We have attached the corporate presentation, application forms, and programs & procedures for your reference. For more details, please visit our website:  www.qolaris.in

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LOAN AGAINST THIRD PARTY COLLATERAL

If you are looking for funding but did not have any own collateral for guarantee , we have a solutions for you.

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We can give you the funds against third party property on the condition of : 1. Property Should be clear 2. Property Should be in Delhi-NCR 3. Owner of the property is ready to be director in the company 4. No Problems in inspection of the property by funding agency or bank

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[businessesconsultant]

5 Effective Ways to Raise Funds for Your Startups Without Investors

Summary: Want to raise funds but can`t find investors? Here are four ways in which you can raise funds without investors.

Establishing a business from the scratch is not so easy. It is quite difficult when it comes to strategizing, managing, and thinking about different segments of the business. And to build it without the initial capital investment from the investors can be even harder.

Though the process might seem time-consuming, starting a startup in India without the burden of investors can yield benefits that outweigh the cons. If you are an amateur, you can take help from a motivational speaker.

Here are 5 ways in which you can do fund-raising for a business without investors:

1.       Keep Your Job as Side Hustle

Since starting a startup business in India without investors can leave you with a lack of funds, it is always a cool idea to continue with your day job. This will give you the advantage of saving your salary.

2.       Make the Most of Government Loan Schemes

Whether you want to start your business without an investor or are unable to find one, you can still fulfill your entrepreneurial dream, thanks to government schemes. To focus on ‘Make in India’, the government has started a few loan schemes.

Schemes like CGTMSE, MUDRA, and Stand-up India can provide you with collateral-free debts and can get access to low-cost capital. To get expert guidance, you can work with the best motivational speaker of India.

3.       Use your Revenue to do Fund Raising

Not all startups are pre-revenue generators. Many startups have customers and monthly revenue, so why not plan smartly and use that money to grow faster. A Revenue Based Loan can turn your revenues into growth capital and can help you to do fund-raising without an investor.  To know step by step process of fund raising, watch here: https://www.youtube.com/watch?v=qC58YpMHKpQ

4.       Go for Crowd Funding

You can also raise money through crowd-funding. Crowd-funding refers to the funds from a large number of people who contribute with a small amount of cash. The process of crowd-funding is typically done via online platforms.

5.       Do Everything for Your Business

A business is just like a baby! Hence, be ready to give all your time and attention. Not just that, you must be willing to make sacrifices to free up your time.

As an entrepreneur, you may want to taste success as soon as possible. However, patience is the virtue that makes any business successful. You may feel challenged at the initial stage of building a start-up. If not prepared, you may have to suffer losses too. Hence, get all the information and knowledge from the industry experts.

We know what you are thinking! The idea of managing a business is easier said than done and we completely agree with you. This is why to help you move forward with your business goals, we at Bada Business offer courses like Business Coaching Program, Problem Solving Courses (PSC) & Lifetime Membership (LTM).

Source: https://news.badabusiness.com/startup/5-effective-ways-to-raise-funds-for-your-startups-without-investors-10586.html

[terkar-capital]

CGTMSE scheme FAQs

The Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) is a trust inaugurated by the Ministry of Micro, Small and Medium Enterprises, Government of India, and the Small Industries Development Bank of India (SIDBI). Launched on 30 August 2000, the main purpose of the CGTMSE scheme is to provide credit guarantees to financial institutions that grant loans to SMEs and Memes.

What is CGTMSE Meaning?

The basic purpose of CGTMSE is to encourage first-time entrepreneurs to build SME and MEME, estimated to be the support of the Indian economy by availing collateral-free loans from qualified financial institutions. The guarantee includes default by the borrower to repay the advance. Thus, the CGTMSE scheme essentially considers the requirement of loans to first-generation administrators so that they can flourish in a competitive environment without the burden of security or third-party guarantees. In turn, the financial institutions are given cover for the lack of security to fund SMEs and Memes promoted by small Indian businessmen up to a certain limit.

CGTMSE – A Driving Force for MSMEs

What is CGTMSE Fees?

The fees charged by the trust fund is of 1% p.a of the amount so approved:

1. 0.75% – for loan of up to Rs. 5 Lac

2. 0.85% for loans above Rs. 5 Lac but up to Rs. 100 Lac.

 The credit guarantee available below this scheme is 75/80% of the amount so transmitted to a maximum cap of Rs. 62.5 Lac / 65 Lac for a loan facility of up to Rs. 50 Lac. The percentage guarantee implies 85% for micro-enterprises for a sum of up to Rs. 5 Lac. The percentage of guarantee is 50% of the amount so approved for a credit of above Rs. 50 Lac with a maximum limit of Rs. 100 Lac. The ownership of the guarantee is a block of 5 years.

Does CGTMSE cover retail trade?

CGTMSE Coverage extended to Retail Trade & Collateral Loans too – Now Retail Trades & partial collateral loans may be included under Credit Guarantee Scheme of CGTMSE. A decision in this opinion was taken under “Rebooting CGTMSE” established by the Ministry of MSME and CGTMSE on February 20, 2018.

 Following modifications were suggested for implementation:

1. Charging Annual Guarantee Fees (AGF) on Outstanding Loan Amount somewhat than sanction amount.

2. Extending the Coverage of the Credit Guarantee Scheme (CGS) to cover the MSE Retail Traders section.

3. Providing loans with Partial Collateral Security “Hybrid Security” under Credit Guarantee Scheme.  

4. Increase in the extent of guarantee coverage to 75% from existing 50% for proposals above ₹50 Lac.

5. Intensifying IT infrastructure of the Trust to develop operational efficiencies and reduce the turnaround time for claim settlement.  

6. Augmentation of the corpus of the Trust from Rs. 2,500 crore to Rs. 7,500 crore

7. To increase coverage of the loans covered under the credit guarantee scheme from Rs. 1 crore to Rs. 2 crore

8. To increase coverage of the credit guarantee scheme for loans being enlarged to micro and small enterprises by NBFCs also.

Understand CGTMSE scheme execution.

What is CGTMSE Loan Interest Rate?

All lenders impose a particular cost to the borrower. The important part of the cost to the borrower is the interest rate for the loan. The majority of the lenders recover CGTMSE loan interest rate that does not exceed 14% PA including the guarantee cover. Most of the time the rate of interest varies as per change in the financial institutions and the facility which is available under CGTMSE.

What is CGTMSE Full form?

The full form of CGTMSE is Credit Guarantee Fund Trust for Micro and Small Enterprises that gives funding to financial institutions to help SMEs and MSMEs.

How to apply for the CGTMSE Scheme?

To apply for a CGTMSE loan, you are required to set up a business plan including business model, projected goal, etc., and obtain certain business documents if you have just registered your business. Once you have all the essential documents and business plans prepared by a professional, you can apply for the loan with eligible moneylenders. They will analyse your business model and application. If the bank is satisfied, it will process the request to CGTMSE for getting a guarantee cover and confirm the loan amount after CGTMSE approves your application and you pay CGTMSE loan fees.

It reaches out even to the rural areas. The application can be made particularly if the applicant is eligible for a loan under the CGTMSE scheme.

How does Terkar Capital help in getting CGTMSE Exposure?

For many years Terkar Capital has worked extensively and exclusively for raising the finances for the businesses. With respect to the company and its financials we arrange the source of the funding for the companies. And CGTMSE loan is among them. There are many financial facts, figures that need to be considered before one shall proceed on the CGTMSE. We analyse the financials, business and arrange the whole execution with the best suits facility under CGTMSE.

[letscomply]

What are the Advantages of an MSME/SSI Registration?

What Are the Advantages of an MSME/SSI Registration- The economic aspirations of every nation hang on its small and young businesses. And the Indian government, considering this, offers many benefits to these organizations in order to achieve growth with less difficulty. To take advantage of these benefits, eligible organizations must obtain an MSME or SSI registration (regulated by the Private Services Act), which is among the easiest government records to be granted.

Important facilities in India

MSME (Establishments) India, which represents approximately 40% of the total industrial value and 45% of the total direct and indirect exports. Next, the government has introduced various schemes and aid to ensure that the project leads a conflict-free presence in the country and also contributes to the Indian economy. The central government has started some of these plans, while the state government has promoted others. To take advantage of it, however, I needed to register Udyog Adhar.

Register a Company

Virtual-CFO

MSME Registration

Income Tax Return

FSSAI registration

Trademark Registration

Virtual General Counsel

ISO certification

Patent Filing in india

Benefits of MSME Logging

Benefits from banks: All banks and other financial institutions recognize facilities and establish special schemes for them. This usually includes lending to the priority sectors, which means that the probability of loan approval is high, and bank interest rates are low. There may also be preferential treatment in case of late payment.

Tax advantages: According to your business, you can enjoy a system of excise from excises as well as exempt from some direct taxes in the first years of your business.

State government subsidies: Most states provide those who have been registered under the Government Financial Services Act with subsidies on power, taxes, and entry to industrial properties run by the state. In particular, there is an exemption from sales tax in most states, and the purchase of preferences overproduced goods.

Central government benefits: The central government announces, from time to time, plans to take advantage of facilities, such as the credit guarantee plan:

Credit Guarantee System (CGTMSE)

One of the main conflicts that small industries face is credit and income inputs from various sources to support them.

The credit guarantee system, provided for MSME support, comes with modifications to make it more useful for small merchants:

Notable features of the scheme include:

1.   Promote an optimum eligibility loan of Rs. 25 rupees lakh.

2.   Limiting the one-time collateral for loans that benefited from MSME in the northeastern region of India from 1.5% to 0.75%.

3.   Increasing the scope of guarantee coverage from 75% to 80% for the following:

4.   Women are running medium and small projects

5.   Micro projects, for loans of up to 5 lux

6.   Loans obtained in the northeastern region of the country

7.   Reducing the one-time guarantee fee for all loans used in northeast India from 1.5% to 0.75%.

In addition to these benefits, the government is also continuing, in a gradual way, to enhance the “List of Products Reserved for Purchase form MSME.” A detailed list can be found on the approved website.

Accordingly, the government is helping to use these product listings, to manufacture and supply these products to large-scale industries, and to make a profit in this process.

Support services provided by state governments:

Extended credit facility

Industrial extension support and services

Availability of advanced sites for building warehouses

Providing training facilities

Leasing – Purchase of machines for use in MSME

Marketing assistance, both inside and outside the country (exports)

Providing assistance to build industries in the underdeveloped regions

Technical consulting, DC assistance, and so on, to promote technology in MSME

MSME, next, has several support systems in the country as well as the center, in terms of both the start-up of a new project and its continued presence. The government also aims to provide trained professional resources, inputs, and capital flows through assistance from venture capitalists, and through private equity funds.

More Information Click Here: https://www.letscomply.com/what-are-the-advantages-of-an-msme-ssi-registration/

Contact Us:

+91-97-1707-0500

info@letscomply.com

https://www.letscomply.com/

[creditboss]

Try the CGTMSE scheme for a credit facility.

All business demands consistent cash flow to maximize their growth possibilities. One of the most prominent barriers faced by micro, small and medium enterprises (MSMEs) is that it is challenging to get business loans from regular moneylenders due to scarcity of collateral and other assets. Without proper funding, MSMEs are unable to expand and grow.

Recognizing the critical role of MSMEs in the economy, the government of India has begun an innovative scheme like the Credit Guarantee Fund Scheme for Micro and Small Enterprises (CGTMSE).

Here, in this article, we offer you insights on what is CGTMSE, how to apply, and its eligibility criteria.

What is the CGTMSE Scheme?

Credit Guarantee Funds Trust for Micro and Small Enterprises (CGTMSE) is a scheme launched by the Government of India, Ministry of Medium, Small and Micro Enterprises (MSME) and Small Industries Development Bank of India (SIDBI) collectively in 2000, focusing on various MSMEs.

The prime purpose of this scheme is to provide term loans and working capital loans up to 200 lakhs to the borrowers, even when they don’t have collateral or security. 

CGTMSE also grants credit guarantees to financial institutions that provide loans to MSMEs. If a borrower defaults on a payment, the CGTMSE trust fund will take care of the guarantee cover in the ratio of 50/75/80/85 percent of the acquired amount.

Who is eligible for CGTMSE?

Lenders: Mostly all commercial banks and specified regional rural banks including NSIC, SIDBI, and NEFDi can be eligible as lending institutions. 

The institutions that enter into an agreement with CGTMSE are Member Lending Institutions (MLIs).On May 31, 2016, 133 suitable Lending Institutions were launched as MLIs of the Trust.

Borrowers: All the existing and new MSMEs can apply for CGTMSE under the following conditions:

CGTMSE provides a maximum of 4crore of guarantee cover for the credit amount up to 5Cr.

In the case of micro-enterprises, the maximum limit for guarantee cover is up to 1.5Cr for credit facilities ranging from 50 lakh to 2 crores.

·Small and micro-enterprises run by women are eligible for a guarantee cover of 80%.

The following organizations are not suitable for the loan under CGTMSE scheme:

Retail Trade

Self Help Groups (SHG)

Training Institutes

Educational Institutions

Agriculture

How to apply for the CGTMSE loan scheme?

Formation of a Business Plan: The first step is to prepare a business plan including all the relevant information of the business, like the nature of the business, the requirement of funds, return on investments, payback periods, and other financial details of the business and its feasibility.

Approach an eligible Lender: The next step is to submit your business plan report to the lender and also Submit the CGTMSE business loan application form to the lender.

The sanction for Bank Loan: once the request for loan application has been made, the lending institutions analyze the business model and finally grant the loan if they meet the eligibility criteria.

Obtaining the Guarantee Cover:  Now the lender applies for the guarantee cover from the CGTMSE authority. Once the CGTMSE approves the loan, it also provides the guarantee cover to the banks /lenders.

Transaction of funds: After the approval, the banker issues the eligible amount and the borrower will bear a CGTMSE guarantee and service fee.

CGTMSE fee and charges:

A borrower needs to pay 1% per annum of the total amount to the lender as the service fee.

1. 0.75% for a loan of Rs 5 lakh and less.

2. 0.85% for a loan over Rs 5 lakh till Rs 100 lakh.

The tenure of the guarantee is for 5 years.

[rahul1111]

MSME Registration in Bangalore:

Nowadays, there are a few reasons regarding why various little and medium endeavours (SMEs) are being shaped in Karnataka just as different places of the nation. You can be viewed as qualified for lower paces of revenue on credits, you can get endowments on power taxes and charge sponsorships, and you can turn into a piece of capital exception conspires and get capital speculation appropriations also. You can likewise be allowed exclusions from direct assessment laws.

MSME Registration in Bangalore

Taking everything into account they are decentralization without a doubt. All the advantages that gather to a SME get through the MSMED Demonstration that has been passed by the Administration of India. Furthermore, its enlistment is liberated from cost, no compelling reason to pay any charges to Service of MSME office; yet it is critical to be enrolled as a MSME to get the unique advantages from focal and state legislature of India. This is an activity program of govt. to quicken and advance the simple of working together.

All in all, indeed where to enrol your business? For this, you have to do enlistment of your undertaking in Udyog Aadhaar official site which viewed as the MSME enrolment entry of legislature of India. Furthermore, it is otherwise called Udyog Aadhaar enrolment gateway for micro, little and medium-sized undertakings.

MSME Registration Online in Bangalore

Documents/ Information Required for MSME Registration in Bangalore Karnataka

PAN and GSTIN of the Company/ Individual

Aadhaar card of the applicant

Total capital investment

Date of Incorporation of Company

Registered office address of the company

Bank details like IFSC Code and  Account Number

Nature of business

Number of employees

 For what reason should a venture register under the Udyog Aadhaar and what are the offices it will get from MSMED?

 Thusly, we clarified quickly some significant favorable circumstances on MSMEs underneath:

 To energize the development of MSME both State and Focal Govt. are colossally focusing on their impetuses, sponsorships, and plans and backing bundles to the enrolled MSMEs through MSMED Act, 2006. After enlistment, any venture can be able to assemble or profit the advantages offered under the MSMED Demonstration.

So the preferences or advantages will be offered to the MSMEs as per their characterizations and seriousness.

Here gander at some vital advantages of MSME enlistment under the Demonstration of government to the undertakings.

https://www.consultry.in/msme-registration-in-bangalore/

 1. Simple Accessibility of Advances from Banks: All banks are prepared to loan the business areas as per their arrangement and separated from this, MSMEs are perceived by banks, they offer money related help with lower financing cost when contrasted with normal business rate.

 2. Duty Refunds under the MSMED Demonstration, 2006: MSME enlisted business may appreciate numerous assessment exception plan and capital addition charge endowments from the legislature.

 3. Simple Admittance to Credit: Mudra Yojana Plan has presented by PM Modi which gives advances to MSMEs without security. Furthermore, undertakings can exploit from this plan to raise their business.

 4. Get Advantages from State Governments: Those endeavors that have enrolled under MSMED Represent them the vast majority of the states and association domains offers appropriations on power, charges, section to state-run industrials, capital venture sponsorships and furthermore excluded from deals charge.

 5. Get Advantages from Focal Governments: Ventures can get simple assent of bank credits on need area loaning, extract exclusion plot, the exception under direct expense law, bring down the paces of revenue and backing, for example, reservation, and so forth Aside from this focal government reports different plans now and then for MSMEs where they can get advantage from it and establishes a climate for circumstances.

 6. half Rebate on IP Security: Government will monetarily support to innovative new businesses for Global Patent Insurance in Gadgets and IT (Taste EIT) by repayment up to half of absolute patent expense, with Rs. 15 lakh limit.

 7. Credit Assurance Asset Plan: This credit will be qualified to miniature and little undertakings covering as far as possible per borrower from Rs. 100 lakh to Rs. 200 lakh as in late update on twentieth February 2018 by Credit Assurance Asset Trust for Miniature and Little Endeavors (CGTMSE).

 8. Capital Appropriation for Mechanical Upgradation: This plan is working for modernization of innovative up-gradation of Little Scope Enterprises (SSI) through the Credit Connected Capital Sponsorship Plan (CLCSS). A venture can get roof credits under this plan from Rs. 40 lakh to Rs. 1 crore and the pace of sponsorship from 12% to 15%.

 9. Market Advancement Help for Miniature, Little and Medium Ventures: This plan helps to subsidize for partaking worldwide reasonable, exchange assignments, exposure, and so on The Administration will reimburse 75% of air admission in financial class and half of room rental charge for general classification and 100% of the air passage in monetary class and space lease for Ladies/SC/ST business visionary.

[likesumit]

Pradhan mantri mudra yojana, mudra yojana, Pradhan mantri yojana

Pradhan Mantri Mudra Yojana (PMMY) or PM Mudra Loan Yojana is a scheme initiated by the Government of India to provide financial support up to a maximum of Rs. 10 Lakh for individuals, micro, small and medium companies, and small / micro / non-agricultural companies.

Mudra loans are provided under PMMY with the help of public and private sector banks, non-bank finance companies (NBFCs), microfinance institutions (MFIs) and regional rural banks (RRB).

Characteristics of Pradhan Mantri Mudra Yogana (PMMY)

•The loans offered are in 3 categories: Shishu, Kishore and Tarun

• Maximum Loan Amount: Rs. 10 lakh

Minimum loan amount: there are no criteria

Warranty / Safety: Not required

• Age criteria: 18 years minimum and 65 years maximum

Repayment period: up to 5 years

• Interest rate: varies from one bank to another.

Types of schemes under the shade of Pradhan Mantri Mudra Yojana

Loan Amount Advance: The PM Mudra Loan Program consists of three categories under which loans are disbursed:

Shishu: for loans amounting to Rs. 50,000

Kishore - to take out a loan of Rs. 50,001- Rs 5 lakh

• Tarun: For a loan in excess of 5 lakhs and amounting to 10,000 rupees

Who Can Borrow: Any entrepreneur or company that has not defaulted on a loan by is eligible to apply for a loan under PMMY (Pradhan Mantri MUDRA Yojana). Therefore, sole proprietorship, limited partnerships, public sector companies, owned companies, or any other legal business entity can apply for a Mudra loan.

Purpose of Loan Assistance: Since a MUDRA loan is a commercial loan, the loan amount cannot be used for personal needs. They are provided to small businesses that carry out specific activities in the manufacturing, service, or trade sectors. Firms can use the capital obtained from the MUDRA loan for marketing purposes, increasing available working capital, or obtaining capital assets to grow the business.

Interest rates: Loans are offered under the MUDRA scheme at nominal interest rates that vary from bank to bank and are based on the approved loan amount.

Pradhan Mantre Mudra Yogana (PMMY) Deals

Pradhan Mantri Yojana loan has a bunch of offers. The significant few include:

1. Microcredit Scheme: Under this scheme, financial support is distributed through microfinance institutions (MFIs) so that they can grant commercial loans amounting to Rs. 1 lakh. Typically, the method of providing such loans could include individuals involved in specific small enterprise activities, as well as various joint responsibility groups (JLGs) and self-help groups (SHGs).

2. The Women Entrepreneur Program (Mahila Uddyami Yojana): This plan is an important part of MUDRA Yojana which is specifically targeted at women entrepreneurs. It is designed to encourage women entrepreneurs, women's corporate responsibility groups, and self-help groups to create numerous small businesses. In such cases, special concessions can be granted, for example, reducing the interest rate by up to 0.25% on the loans granted.

3. Bank Refinancing Scheme: MUDRA allows banks, including registered cooperative banks, regional rural banks and commercial banks, to easily refinance loan amounts (up to 10,000 rupees per unit). Refinancing service is only available if these small business business loans are offered. Banks eligible to benefit from the refinancing service must meet the requirements notified from time to time.

4. The MUDRA Card - The MUDRA Card is an innovative credit product that facilitates access to credit for small businesses while providing flexibility to the card owner. It can be used as a credit card with an overdraft limit (loan) and also as a debit card with the ability to make withdrawals from ATMs. Businesses can use the Mudra Card to increase working capital under their exclusive cash credit agreement.

Credit Guarantee Fund - Also known as Portfolio Credit Guarantee, it involves the creation and use of a special fund called the Small Unit Credit Guarantee Fund (CGFMU). This fund is managed by the National Credit Guarantee Trustee Company Ltd. It allows eligible entities to receive small loans easily.

Equipment Financing Scheme: As part of the Ministry of Rural Development and Development loan scheme, this scheme enables owners of small enterprises and small units to obtain a loan to finance the purchase / upgrade of eligible equipment / machinery. This encourages companies to improve their production technologies to increase the overall productivity and efficiency of their business.

Small Enterprise Credit - One of the primary motives of the Ministry of Rural Development and Rural Development is to maximize both the amount of benefits and the number of beneficiaries of the system. A large proportion of the Indian population currently works in specific sectors including, but not limited to, road transport, food production, textile production, and community services. To meet the growth needs of these sectors, a number of products and schemes have been launched specifically designed to help small businesses succeed and thrive.

What do banks earn?

It is clear that the MUDRA Yojana loan can benefit small industries operating in India and act as an engine for the country's development. But this scheme helps the banks, that is, the lender too. Any collateral used to deliver PM Mudra Yojana will be kept by the Lender to reduce your risk. Additionally, any assets created through the loan will be mortgaged to the lender. The following are bank allocations:

• Providing a Small and Micro Business Trust Guarantee Fund (CGTMSE) that protects the bank if the borrower fails to meet its obligations as a result of incurring a business loss.

• The bank can also request a DPN (Demand Note), which is a written undertaking by the borrower to repay the loan amount at an agreed upon interest rate.

[speedydragondonut]

What is Subordinate debt  Scheme of Rs.20000 Crores for MSMEs announced by Finance Ministry in Budget 2020 ?

Finance Minister Nirmala Sitharaman in Budget 2020 has proposed to launch a scheme for giving subordinate debt to MSMEs stressing on the working capital challenge faced by them. The scheme is useful with respect to npa management and recovery.

 Subordinated debt (also known as a subordinated debenture) is an unsecured loan or bond that ranks below other more senior loans or securities with respect to claims on assets or earnings. Subordinated debentures are thus also known as junior securities. In the case of borrower default, creditors who own subordinated debt will not be paid out until after senior bondholders are paid in full. Certainly, it will control npa in india up to some extent.

 The government has asked the Reserve Bank of India to extend the debt restructuring window for micro, small and medium enterprises by a year to March 31, 2021, in measures aimed at imparting thrust to the MSME sector. It is proposed to introduce a scheme to provide subordinate debt for entrepreneurs of MSMEs. This subordinate debt to be provided by banks would count as quasi-equity and would be fully guaranteed through the Credit Guarantee Trust for the Medium and Small Entrepreneurs (CGTMSE).

This move is beneficial and will boost the financial health of MSMEs. Compared to other alternatives the subordinate debt will be less expensive. Also, it will aid to faster npa recovery process.  So surely this is a welcome move and will enhance the economic and financial sustainability of MSMEs. However, the success of the model will hinge on the quality of the due diligence done prior to the lending. Even within the MSME sector, albeit it is crucial, the quality of the borrower will have to be maintained for this to be a long term model which can be supported by lenders notwithstanding the government of India’s support.

"An app-based invoice financing loans product will be launched. This will obviate the problem of delayed payments and consequential cash flow mismatches for the MSMEs". Necessary amendments will be made to the Factor Regulation Act 2011 to enable non-banking financial companies (NBFCs) to extend invoice financing to the MSMEs through TReDS thereby enhancing the economic and financial sustainability.

 Eligibility criteria:

The MSME borrower should have less than Rs 25 crore outstanding as on 29.02.2020

Turnover of Rs 100 crore.

The tenure of the loan would be 4-years with 12-months moratorium on Principal repayment.

 How will the Subordinate Debt scheme work for the MSMEs?

MSMEs require more liquid funds than large corporates, but banks and NBFCs are often unwilling to extend them the requisite line of credit due to scepticism around the MSME sector in general, and the added fear of bad loans.

Subordinate debt, though it carries a higher rate of interest, is listed as a long-term liability on the company books – it gives them more liquid capital to invest in their growth in the present. In case of any defaults, the entrepreneur is required to first clear the senior loans (known as unsubordinated loans) before the subordinate debt.

For lending institutions, subordinate debt fetches higher interest rates but is a bigger risk in the case of defaults. However, according to the Budget proposal, the subordinate financing will count as quasi-equity and will furthermore be guaranteed by the CGTMSE. The Trust’s funds will be augmented for this very purpose. Therefore, in the face of a government guarantee, the banks will not find it as risky to extend subordinate financing to the MSME sector. It will reduce the burden on nclt lawyers Mumbai.

[vsplusonline]

Coronavirus package | How will the COVID-19 relief for MSMEs help?

New Post has been published on https://apzweb.com/coronavirus-package-how-will-the-covid-19-relief-for-msmes-help/

Coronavirus package | How will the COVID-19 relief for MSMEs help?

The story so far: In his address to the nation, his third, on May 12, Prime Minister Narendra Modi announced a ₹20-lakh crore economic relief package titled Atmanirbhar Bharat Abhiyan. The relief package is being unveiled in tranches from May 13 by Finance Minister Nirmala Sitharaman. The first tranche, aimed at micro, small and medium enterprises (MSMEs), non-banking financial companies (NBFCs) and at some individuals was announced by her on Wednesday.

What are the proposals aimed at offering relief to micro, small and medium enterprises (MSMEs)?

The government has proposed to offer collateral-free loans to MSMEs which will be fully guaranteed by the Centre. There will be a principal repayment moratorium for 12 months and the interest rate will be capped and there will be no guarantee fee.

Atmanirbhar Bharat Abhiyan | First tranche | Second tranche | Third tranche | Fourth tranche

All MSMEs with a turnover of up to ₹100 crore and with outstanding credit of up to ₹25 crore will be eligible to borrow up to 20% of their total outstanding credit as on February 29, 2020. These loans will have a four-year tenure and the scheme will be open until October 31. A total of ₹3-lakh crore has been allocated for this.

How will this benefit MSMEs?

This will act as initial seed money for these small enterprises hit by zero cash flow due to the national lockdown. This loan will help them buy raw materials, pay initial bills and daily wages to employees. In short, this will be like working capital for cranking up their businesses again.

Banks, though flush with funds, have been unwilling to lend to this category of borrowers as they fear that the money will not be repaid. These small businesses have also pledged all their assets already for other loans and do not have any more assets to pledge.

It is to break this logjam that the government has said that it will backstop banks up to ₹3-lakh crore and said that these loans do not need collaterals. Banks are now expected to be more comfortable in assisting this category of borrowers because the risk is zero (since the loans are guaranteed by the central government).

Atmanirbhar Bharat Abhiyan | First tranche of package seen at ₹5.9 lakh crore

This is the single biggest proposal in the last three tranches of announcements under the Atmanirbhar Bharat Abhiyan and small businesses are expected to benefit from this in a big way. About 45 lakh MSMEs are expected to gain from this proposal.

Are these the only proposals for MSMEs?

No. A partial credit guarantee scheme has been extended to enable promoters of these units to increase their equity. A total of ₹20,000 crore will be funnelled through the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) whereby banks will lend money to promoters which can be infused as equity in their businesses. About two lakh stressed MSMEs with non-performing assets (NPAs) are projected to benefit from this. The CGTMSE will offer a partial credit guarantee to banks.

There is also a proposal to infuse equity into MSMEs through a Fund of funds system where the government will provide ₹10,000 crore as initial corpus of the Fund. This will be leveraged to raise ₹50,000 crore which will be used to support MSMEs in desperate need of equity through ‘daughter funds’ of the main Fund of funds. The aim is to expand size and capacity of the MSMEs with equity and help them get listed on the stock exchanges.

Was not a change in the definition of MSMEs also announced?

Yes, henceforth MSMEs will be defined not based on their investment alone but also on their turnover. The definition has been tweaked and the existing distinction between manufacturing and services units has been eliminated.

Henceforth, a unit with up to ₹1 crore investment and ₹5 crore turnover will qualify as a micro unit, investment up to ₹10 crore and turnover up to ₹50 crore will qualify as a small unit, and investment up to ₹20 crore and turnover up to ₹100 crore will qualify as a medium enterprise.

It has been a long-standing demand from industry to hike the investment limits, as with inflation, units often cross the threshold that will bring them benefits. To prevent this, they either run their operations at a reduced level or incorporate multiple units so that turnover is distributed in a way that they remain within the threshold that will give them the benefits. The decision to add turnover criteria to investment is seen as a good decision as there are units that leverage a small capital to post large revenues.

Also read | Landslide changes in MSME sector expected: Ravi Uppal | Equity infusion for MSMEs hailed

What are the proposals for non-banking financial companies (NBFCs)?

NBFCs, housing finance companies and micro finance institutions are finding it difficult to raise debt capital due to a confidence crisis in the debt markets. The government has, therefore, announced a special liquidity scheme of ₹30,000 crore to pick up investment grade debt paper from both primary and secondary markets. Such paper will be fully guaranteed by the government. This is expected to break the low confidence cycle in the market for lending to the above category of borrowers.

In addition, to help low rated finance companies to raise debt, the existing partial credit guarantee scheme has been extended to cover primary market debt paper wherein the first 20% loss will be borne by the government.

A total of ₹45,000 crore has been set aside for this Partial Credit Guarantee Scheme 2.0 that will offer liquidity to paper rated AA and below and even unrated paper.

Do electricity distribution companies (discoms) also feature in the first tranche announced?

Yes, discoms are in a huge liquidity crisis and unable to pay their dues to electricity generation companies. Their cash flow and revenues have been hit due to low demand from industrial consumers for power during the lockdown. The various State discoms together owe about ₹94,000 crore to their suppliers, the generation and transmission companies.

Also read | ₹90,000-crore ‘power backup’ will help ease liquidity pressure on discoms

The government, through Power Finance Corporation-Rural Electrification Corporation, will infuse liquidity of ₹90,000 crore to discoms which will be securitised against their receivables from consumers. The loans given for the purpose of discharging their dues to generation companies will be against a guarantee from the respective State related to the discom. This emergency liquidity infusion will avert a crisis where generation and transmission companies stop supplies to discoms that are in default.

What are the measures for the common man?

In March, when the first relief package called the Pradhan Mantri Garib Kalyan Yojana was announced, the government offered to pay the 24% provident fund contribution (employer+employee) for those earning up to ₹15,000 a month as salary and working in units that employ less than 100 workers for three months. This has now been extended for another three months up to August. The statutory PF contribution for those employed in the private sector (and not in the category of establishments above) has been reduced to 10% (from 12% now) for the next three months in order to increase liquidity in their hands. This is expected to benefit 4.3 crore people and 6.5 lakh establishments and release a total of ₹6,750 crore liquidity.

In addition to the above, the rate of tax deducted at source (TDS) and tax collected at source (TCS) has been reduced by 25% for a whole range of receipts. Thus, in payments to contractors, professional fees, rent, interest, commission, brokerage, etc. the TDS will be 25% lower. The TCS paid while buying a car of over ₹10 lakh in value and TCS collected in property transactions will also be lower.

Also read | CBDT notifies reduction in TDS/TCS

The lower TDS is not applicable on monthly salaries that employees receive.

In the cases where TDS/TCS has been reduced, the tax liability is not reduced. It will be payable while filing return or while paying advance tax. The idea is only to offer immediate cash relief to people. The lower TDS/TCS kicks in right away and will stay until March 31, 2021.

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[todaybharatnews]

via Today Bharat FM Nirmala Sitharaman Speech HIGHLIGHTS: From announcing loans for business, including micro, small and medium enterprise (MSMEs) to extending date for filing ITR return, here's what all Finance Minister said in her press briefing. Finance Minister Nirmala Sitharaman during the press conference. FM Nirmala Sitharaman Speech HIGHLIGHTS: Union Finance Minister Nirmala Sitharaman Wednesday unveiled details of the Rs 20 lakh crore economic package announced by Prime Minister Narendra Modi on Tuesday. Announcing a special package for Micro, Small and Medium Enterprises (MSMEs), Sitharaman announced that the government will provide stressed MSMEs with equity support and facilitate the provision of Rs. 20,000 Crores as subordinate debt. On Tuesday evening, PM Modi pitched for a self-reliant India in the post Covid-19 world as he announced an economic package that is about 10 per cent of the country’s GDP. The prime minister had said the package would help every section including workers, farmers, middle class, industrial units and the MSME sector. Earlier today, the proposed mega stimulus plan had already lifted markets, with the benchmark equity market indices on the BSE and National Stock Exchange (NSE) opening nearly 4 per cent higher. Here are the key highlights from Nirmala Sitharaman’s Press Conference #Essentially this is to spur growth to build a very self-reliant India and that is why this initiative is called ‘Atmnirbhar Bharat Abhiyaan.’ #Prime Minister Modi laid out a comprehensive vision, and that vision was laid out after wide consultations with several sections of the society. #You’ve been seeing that the government led by Prime Minister Modi since 2014 has been a listening, sensitive and responding government. #A self-reliant India does not mean that our country will be an isolationist country. It will be a confident country. #So far, Rs 52,606 crore has been transferred to 41 crore Jan Dhan account holders, Rs 18,000 crore grain transfers; Ujjwala, divyang and old age have also benefited. #Beginning today, over the next few days we will come before you with our team to put forth Prime Minister’s vision of self-reliant India. #We should not forget that we also have a responsibility towards the poor, needy, the migrants workers, divyang and the aged of the country. #There is a collateral-free MSME loan that is being provided. This will give a facility of 3 lakh crore. #Collateral free automatic loans to be provided to MSMEs worth Rs 3 Lakh Crore. These have a 4-year tenor and will be valid up to October 31, 2020. #Rs 20,000 crores subordinate debt for stressed MSME. Two lakh MSME’s are likely to benefit from it. Our government will provide support of 4,000 to CGTMSE. #Global tenders to be disallowed in Government procurement up to Rs 200 crores. Indian MSMEs and other companies have often faced unfair competition from foreign companies, this will make self-reliant India, will also then be able to serve ‘Make in India’. #To ease financial stress as businesses get back to work, Our government has decided to continue EPF support for business and workers for 3 more months providing a liquidity relief of Rs 2,500 crores. # Government will also launch a Rs 30,000 crore Special Liquidity Scheme. Under this scheme investment will be made in both primary and secondary market transactions in investments graded debt paper of NBFCs, HCFCs and MFIs. #Discoms today are facing unprecedented cash flow problems. In all states, they are in serious crisis. In order to help them, liquidity infusion of Rs 90,000 will be done. #Extension of up to 6 months to be provided to contractors by all central agencies. #In order to provide more funds at the disposal of the taxpayers, the rates of Tax Deduction at Source (TDS) for non-salaried specified payments made to residents and rates of Tax Collection at Source (TCS) for the specified receipts shall be reduced by 25 per cent of the existing rates. #Due date of all income-tax return for the financial year 2019-20 will be extended from July 31, 2020, and October 31, 2020, to November 30, 2020, and Tax audit from September 30, 2020, to October 31, 2020. #Period of Vivad se Vishwas Scheme for making payment without additional amount will be extended to December 31, 2020.

[cryptswahili]

What Fintech Startups Want In Budget 2019: Tax Rebate, Liquidity And Policy Reforms

Undoubtedly, the Interim Budget 2019 is going to be the populist one — a budget to lure the common man and regain the waning trust of the middle-class working Indian. However, the Modi government, a favourite of the corporates and startup ecosystem stakeholders, is also known for holding its ground on the schemes and initiatives it has introduced.

Therefore, the upcoming Budget is going to be a mixed bag, which would attempt to bode well for the Indian startup ecosystem as well as the common man, particularly farmers and the working class.

The government is expected to boost its flagship programmes and schemes such as Digital India, Make in India, Startup India, and MUDRA in the Interim Budget 2019 (expected to be vote-on-accounts), to be presented by the interim finance minister Piyush Goyal on February 1.

One of the biggest stakeholders in the ecosystem, fintech startups, are waiting with bated breath for the Budget, and they have their views and demands, which Inc42 has collated in this article. “With the Union Budget round the corner, the startup sector is keenly awaiting the policies the government will lay down,” said Kumar Abhishek, CEO and co-founder, ToneTag, a startup that designs cashless and contactless payments solutions.

With a total of 3.7 Bn UPI transactions last year, and the December volume standing at 4x of the transactions in January 2018, fintech startups continued their parabolic growth curve. The growth curve of payments startups, in 2018, though, was definitely not the same as was observed in 2017, when digital payments seemed to be on steroids owing to the demonetisation effect.

As Aadhaar-enabled eKYC by private companies has been suspended by the Supreme Court and the applicability of the new amendment is limited to the banking and telecom sector only, in this Budget, fintech startups are expecting the government to incentivise sectors such as payments and lending further.

Budget 2019: Printing of Budget documents begins with ‘Halwa’ ceremony

Here is a detailed look at what fintech startups want from the upcoming Budget:

Incentivise Digital India, MUDRA, And Other Schemes

According to Bala Parthasarathy, CEO and cofounder, MoneyTap, while Aadhaar-enabled verification will free up banks and finance companies to carry out eKYC and eSign, significantly reducing costs for them, GST slabs may become lower for businesses.

According to Abhishek, fintech startups are expecting a faster and easier method for procedural clearance and license approvals. “They are also looking for an increase in allocation of funds towards the adoption of new technologies such as AI and blockchain. With the success of the Digital India scheme, the industry is looking for an allocation of adequate funds to further the cause,” says Abhishek. Increased investments in training, research, and skill development in areas such as big data, IOT, robotics, and other digital tools will act as a facilitator of startup growth, he added.

Startups also want easing of unnecessary regulatory supervision and government interference so they can operate without any pressure.

Simplify TDS, Repayments In Online Lending

While the banking sector has been a distressed sector for the past few years, with non-performing assets (NPAs) growing exponentially, non-banking financial companies (NBFCs) too are now feeling the heat of the liquidity crunch in the country. Gaurav Gupta, cofounder and CEO of online lending marketplace MyLoanCare (.in), says, “Post the IL&FS crisis, NBFCs’ source of financing has dried up and this is further impacting an already struggling sector.”

Gupta also thinks that the current crisis facing the real estate sector can have a detrimental effect on not just infrastructure development but can result in a far-reaching crisis for the innumerable SMEs who work in the sector as suppliers and vendors to developers. “While the RBI has shown its commitment towards addressing capital requirements of NBFCs in other sectors, it remains to be seen if it will extend a helping hand to the real estate sector by enhancing the financing limit of NBFCs to developers or by providing a refinance window for non-consumer loans by NBFCs,” he adds.

The RBI recently agreed to defer Basel III implementation by one more year. This will reportedly expand the lending capacity of Indian banks by $52.24 Bn (INR 3.7 Lakh Crore).

Speaking to Inc42, Shivashish Chatterjee, founder and CEO of DMI Finance, says, “Any delayed application of the Basel III norms that facilitates greater availability of capital is good news in the short term as long as banks leverage the added buffer to increase their exposure to NBFCs, which is not an assumption we can make automatically.”

So, how can Interim Budget 2019 help boost the lending space and, specifically, tech-oriented lending startups?

Rajat Gandhi, founder and CEO of P2P lending startup Faircent.com, opines that to encourage lenders, the finance minister must consider tax exemptions for investments in P2P lending, allowing defaulted loans to be considered as capital loss when filing returns, and providing special tax rebates to lenders who fund loan requirements of MSMEs. “This will increase investments by lenders in P2P lending, unlocking the supply side and thereby putting pressure on rates and easing the current liquidity crunch,” adds Gandhi.

Reiterating Gandhi’s views, Amit Sachdev, CEO and cofounder of online business lending startup CoinTribe, says, “We hope that this year’s Budget will suitably address two long-pending requests of the online lending industry. First and foremost, the government should eliminate the need for SMEs to pay TDS (tax deducted at source) on all interest payments due on business loans. This TDS payment makes the loan repayment process very complex for SMEs, most of which can’t afford the services of highly-paid accountants.”

Sachdev says that the online lending platforms should also be given access to low-cost funds from government schemes such as MUDRA and the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE). These funds are only available to banks and NBFCs as of now, and a substantial part of them remains unutilised. SMEs are a key driver of economic growth and providing them access to low-cost funds in a simple, convenient manner will go a long way in enabling them to contribute more meaningfully to the economy and generate employment in the country, he explains.

Ensure Sustained Growth Of Digital Payments

While lending, insurance, and banking are the old monks of the financial services sector, it is the fast-changing digital payments technology, led by startups, which is redefining the terms for the entire sector. The technologies introduced by payments startups are paving the way for the old guard corporates to adopt later.

In recent years, digital payments have grown to such a level that the government is now considering making the Payments Regulatory Board (PRB) as independent as the RBI — the PRB is currently under the control of the RBI.

There is a sound reason for this move. According to NITI Aayog, the digital payments industry to hit $1 Tn by 2023.

Harshil Mathur, CEO and cofounder, Razorpay, says, “Since the 2018-19 budget, there’s been a sustained push towards a digital-first economy, which is remarkable. From seeing Indians become more comfortable with making C2G (consumer/citizen to government) payments online to the RBI’s efforts at forming a committee to deepen digital payments in the country, it’s been a fairly interesting year.”

In the upcoming Budget, Mathur wishes that the government addresses the angel tax problem. Secondly, considering how the UPI is being embraced by businesses and consumers, resulting in larger transaction volumes and increased P2M (Person-To-Merchant) adoption, it would be good if the government took steps towards making UPI the de-facto mode for all online payments soon, says Mathur.

Making RuPay essentially listed in all plastic card-based digital payments and UPI the default payments mode are some of the demands that Indian payments startups have been asking for lately. In the draft ecommerce policy, the government had even proposed to make RuPay card availability at payments gateway mandatory for ecommerce companies. However, the draft is being reworked now.

Ravi Vishvanathan, CFO of PayMate, a cloud-based platform enabling B2B payments and credits for SMEs, enumerates a number of probable inclusions in Budget 2019:

Employment: SMEs/MSMEs registering new employees in the Employee Provident Fund (EPF) scheme may get reimbursement for the employer’s contribution to PF

Additional tax deduction on salary paid to new employees

Tax benefit for timely repayment of loans by SMEs/MSMEs

Interest subsidies for MSMEs on credit up to a limit

Inspection/scrutiny by government departments may be made an exception for MSMEs

Depreciation allowance on fresh capital expenditure by SMEs/MSMEs

Credit guarantee scheme for MSMEs

Continue With Other Reforms

Finance Minister Arun Jaitley addressing the press after 32nd GST Council Meet on January 10

The goods and services tax (GST), which, when introduced, had given sleepless nights to SMEs and startups, has been continuously reformed based on feedback from industries. Angel tax exemption is another area where the government has taken a number of initiatives to safeguard startups. However, it’s not been enough. Startups and angel investors have been demanding some kind of legislative reform to shield startups from Section 56(2)(viib) which embodies the angel tax.

Vivek Tiwari, MD and CEO, Satya MicroCapital, says, “We expect the government to introduce measures to reduce the compliance burden and ease working capital blockages, with possible reductions in tax rates in the 2019 Union Budget.”

He adds that the government must also consider reducing GST rates in the forthcoming budget. Considering the difficulties faced by SMEs in the country, the finance minister is expected to increase the sales threshold for compulsory GST registration from INR 20 lakh to somewhere between INR 50-75 lakh. Further, the government should also look at introducing a concessional tax scheme for small service providers.

Mathur avers it is important for the government to recognise the immense potential of fintech lenders in improving financial inclusion and credit penetration in the country. Thereby, the government should encourage them with prudent policies to benefit the sector. “I hope the upcoming budget continues to incorporate new policies and regulations that will create new opportunities and boost our digital payment ecosystem,” says Mathur.

Cryptocurrency is another area where the government has not come up with any clear regulation. As of now, the RBI has banned banks and payments companies from extending any services to crypto entities.

This move clipped the wings of crypto startups in India even as they were taking off. It resulted in leading crypto companies having to shut shop or relocate. The ones that survived were forced to restrict their services to crypto-to-crypto trading, thereby incurring losses as the transaction volume of crypto-to-crypto is far less than that of fiat-to-crypto.

Nischal Shetty, founder and CEO of Mumbai-based crypto startup WazirX, says, “I hope the Garg Committee submits its regulation report before the Budget 2019 session. If that happens, then I’m confident that our finance minister will address the cryptocurrency issue in the Parliament and ensure that we take a positive and progressive step to shape the future of digital assets in India.”

However, in the current scenario, the Garg Committee is unlikely to submit its report on crypto regulation in the country before February end.

In other news, more money is expected to be infused in the banking system this Interim Budget 2019. The middle class is also expecting the government to increase the tax exemption threshold from INR 2.5 Lakh ($3.5 K) to INR 5 Lakh ($7 K). At the same time, experts believe that the finance minister might set a revised fiscal deficit target  to 3.2% from the existing target of 3.3%.

Stay tuned to Inc42 for all the upcoming Budget-related updates!

The post What Fintech Startups Want In Budget 2019: Tax Rebate, Liquidity And Policy Reforms appeared first on Inc42 Media.

[Telegram Channel | Original Article ]

[terkar-capital]

Credit Guarantee Fund Trust for Micro and Small Enterprises - CGTMSE

The Government of India has launched a new credit scheme for Micro and Small businesses, which is named Credit Guarantee Fund Trust for Micro and Small enterprise (CGTMSE) amid the economic setbacks evolving due to lack of credit. Being a nation where new ideas are emerging from each and every corner, a brilliant potential of business execution, realising the scenario at the time where it is most helpful - the Government of India along with SIDBI has introduced this scheme which will uplift the micro and small enterprise industry. 

This scheme will basically credit the small businesses in their initial stage, the focus is to aid them on overcoming this hurdle of lack of financing when commencing with ideas and looking forward to executing them. The CGTMSE scheme has some eligibility criteria which should be taken into consideration for MSEs.

Eligibility criteria for obtaining CGTMSE loan are as follows :

A person owning an MSE is eligible to obtain a loan for future endeavours without having any collateral back-up like before.

A person who is applying must own a business which can be categorized into MSMEs

Applicant’s business must have at least 3 years of continuous business.

There is no restriction regarding the type of MSMEs, any type of manufacturing or service companies are eligible. As of now, all activities that come under the service sector as per the MSMED Act, 2006 are eligible for coverage under the scheme.

New and existing Micro and Small Enterprises engaged in manufacturing or service, Agriculture, Self Help Groups (SHGs), Training Institutions etc.

Features of the CGTMSE loan scheme are as follows :

This scheme will help in maintaining an upward spiral of the small businesses.

Lack of credit lending is a major cause of disruption, and this scheme looks comprehensively into lending facilities as well.

A new initiative this scheme introduces is ‘hybrid security’ which ensures cover on the part of the credit facility, which is not covered into the collateral security

The credit facility is based on the primary security and other financial assets.

The scheme directs at making it easy for the borrower to obtain term loan as well as working capital utilities from the same organization.

The extent of the guarantee cover is 80%.

Micro and Small Enterprises operated and/or owned by women.

In case of default, Trust settles the claim up to 75% of the amount in default of the credit facility extended by the lending institution for credit facilities up to Rs 200 lakh.

CGTMSE loan at Terkar capital

This facility will boost up economic activity in the country, the criteria set or obtaining the CGTMSE loan has been kept for maximum convenience.

If you want to apply for a CGTMSE loan and looking for a trustworthy firm, then you must consult Terkar capital group, along with fluent loan providing, they guide you throughout the process as well. They work on transparency before you apply for a loan they will explain to you what is CGTMSE loan and how the process will go forward, do’s and don'ts. They maintain a relationship which is aimed at providing you with efficient services and flawless satisfaction.

[vsplusonline]

Budget 2020: What did MSMEs and Startups get?

New Post has been published on https://apzweb.com/budget-2020-what-did-msmes-and-startups-get/

Budget 2020: What did MSMEs and Startups get?

Tabled in the parliament by Finance Minister Nirmala Sitharaman, the Union Budget for 2020-21 had some significant announcements for MSMEs and the startup community. While announcements for MSMEs were aimed at reducing the stress on working capital requirement, for startups it aimed to rectify an anomaly around ESOPs, which has been a long-standing wish of the community. Here are the key announcements made by the FM.

For SMEs 1) The Finance Minister started with the accomplishments of GST and how it had led to significant benefits to MSME by way of enhanced threshold and composition limits. Sitharaman said the effective tax incidence on almost every commodity came down substantially. Through several rate reductions, an annual benefit of Rs one lakh crore has been extended to consumers. It amounts to 10% reduction in overall tax incidence. An average household now saves about 4% on its monthly spends on account of reduced GST rates.

2) Sitharaman added that during this phase of maturing, GST did face certain challenges. This was natural as transition was daunting. GST Council has been proactive in resolving issues during transition. In the last two years the Government has added more than 60 lakh new taxpayers, a total of about 40 crore returns were filed, 800 crore invoices were uploaded, and 105 crore e-way bills were generated. A simplified new return system is being introduced from April 1, 2020.

3) She said the Government e-Marketplace (GeM) is moving ahead for creating a Unified Procurement System in the country for providing a single platform for procurement of goods, services and works. Stating that it offers a great opportunity for Medium, Small and micro Enterprises (MSMEs), she stated that 3.24 lakh vendors are already on this platform and is proposed to take its turnover to Rs 3 lakh crore.

4) A National Logistics Policy will be released soon and it will clarify the roles of the Union Government, State Governments and key regulators. It will create a single window e-logistics market and focus on generation of employment, skills and making MSMEs competitive.

5) The Government will make necessary amendments to the Factor Regulation Act 2011. This will enable NBFCs to extend invoice financing to the MSMEs through TReDS, thereby enhancing their economic and financial sustainability.

6) Working capital credit remains a major issue for the MSMEs. Sitharaman proposed to introduce a scheme to provide subordinate debt for entrepreneurs of MSMEs. This subordinate debt will be provided by banks, would count as quasi-equity and would be fully guaranteed through the Credit Guarantee Trust for Medium and Small Entrepreneurs (CGTMSE). The corpus of the CGTMSE would accordingly be augmented by the government.

7) More than five lakh MSMEs have benefitted from restructuring of debt permitted by RBI in the last year. The restructuring window was to end on March 31, 2020. Government has asked RBI to consider extending this window till March 31, 2021.

8) An app-based invoice financing loans product will be launched. This will obviate the problem of delayed payments and consequential cash flows mismatches for the MSMEs.

9) Currently, businesses having turnover of more than Rs one crore are required to get their books of accounts audited by an accountant. In order to reduce the compliance burden on small retailers, traders, shopkeepers who comprise the MSME sector, Sitharaman proposes to raise by five times the turnover threshold for audit from the existing Rs 1 crore to Rs 5 crore. However, this increased limit shall apply only to those businesses which carry out less than 5% of their business transactions in cash.

10) Labour intensive sectors in MSME are critical for employment generation. Cheap and low-quality imports are an impediment to their growth. Keeping in view the need of this sector, customs duty is being raised on items like footwear and furniture.

For Startups: 1) The government proposes to provide early life funding, including a seed fund to support ideation and development of early stage Startups.

2) During their formative years, ESOP is a significant component of compensation for startup employees. Currently, ESOPs are taxable as perquisites at the time of exercise. This leads to cash-flow problem for the employees who do not sell the shares immediately and continue to hold the same for the long-term. In order to give a boost to the startup ecosystem, the FM proposed to ease the burden of taxation on the employees by deferring the tax payment by five years or till they leave the company or when they sell their shares, whichever is earliest.

3) Further, an eligible startup having turnover up to Rs 25 crore is allowed deduction of 100% of its the profits for three consecutive assessment years out of seven years if the total turnover does not exceed Rs 25 crore rupees. In order to extend this benefit to larger startups, Sitharaman proposed to increase the turnover limit from existing Rs 25 crore to Rs 100 crore. Moreover, considering the fact that in the initial years, a startup may not have adequate profit to avail this deduction, Sitharaman proposed to extend the period of eligibility for claim of deduction from the existing 7 years to 10 years.

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