MSME Loan Scheme You Should Know About to Grow Your Business

Introduction

Capital is the major constraint for businesses, and the formal lending sector cannot fulfill the demand for capital by the MSMEs. If an MSME wants to grow and solve its cash crunch issues, they need to have monetary backing to expand its business. The credit gap in the Indian MSME sector stands at a staggering 530 Billion dollars. Therefore, you should look for the MSME loan scheme by the Indian government.

MSME Loan Scheme: Increase Your Capital To Grow Your Business

So, here are some of the best schemes that will help your MSME business to grow and expand beyond the horizons of your conventional wisdom. Therefore, here are the schemes you should look into:

List of MSME Loan Schemes
  • Prime Ministers’ Employment Generation Programme: It is a flagship scheme of the Indian government that promotes self-employment in the MSME sector. Khadi and the village industries commission are acting as the nodal agency for this national-level scheme. The limit for project cost is Rs.25 and Rs.10 Lakhs for the manufacturing and service sectors, respectively. So, under this scheme, the beneficiary has to bear only 5 to 10 percent of the cost, depending upon the category. The rest of the payment of the capital is by banks and the scheme. 
  • Credit Guarantee Fund Trust for Micro and Small Enterprises: This scheme will provide a guaranteed credit facility to MSMEs for up to two crores. Also, it provides guarantee cover to MSMEs where the trust settles up to 75 to 80 (where applicable) percent of the loan amount in case of default. Moreover, the capital can be as a term loan or working capital loan — whichever is feasible. 
  • National Small Industries Corporation (NSIC) Credit Facilitation Scheme: With this scheme, NSIC collaborated with different banks to provide credit in the fund and non-fund-based loans. Thus, they will provide handholding assistance to businesses without any extra fees and help them to acquire loans at every step of the process. Therefore, any MSME can visit the nearest branch of the NSIC to get assistance with the loan.
  • MSME Business Loan in 59 Minutes: Punjab & Sind Bank (PSB) launched this scheme where an MSME can get a digitally approved loan in just an hour! Therefore, no business shall have to go through lengthy processes to get their loan approved. The credit limit is as per the case basis. Furthermore, all the MSME business loans are collateral-free; thus, MSMEs don’t have to get under the burden of providing collateral. 
  • Stand Up India Scheme: For the upliftment of the SC/ST and backward and women entrepreneurs government of India launched this scheme. Through this scheme government of India provide composite loans (working capital and term loan together) of 10 Lakhs to 1 crore. Although the loan is collateral free, the beneficiary has to contribute 10 percent margin money as their contribution to the project. 

So following the schemes will help your MSME business soar to new heights! Also, apart from these strategies, you can use cash flow optimization techniques to increase your working capital. There are platforms such as CredFlow that will help you to optimize your money for better growth. 

Conclusion

So these MSME loan schemes should help you to get a competitive edge in the market and make cash crunch problems reminiscent of the past. That said, MSME schemes will grow your business above and beyond expectations.

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