CGTMSE Loans Explained: Simplifying MSME Funding Solution
Introduction
Imagine this: Mr. Ravi has owned a small manufacturing unit for five years. He wants to purchase additional machinery to expand his business. However, the problem is that he does not have any collateral to avail of the machinery loan.
Then, Mr. Ravi came to know about the collateral-free loan scheme—a Central Government-backed initiative that provides collateral-free loans to Micro and Small enterprises. With the CGTMSE loan, he can avail up to ₹5 crore in funding without needing securities. Now, he has the financial freedom to expand his manufacturing business.
Just like Mr. Ravi, thousands of business owners across India are transforming their dreams into reality with the CGTMSE loan benefits. Let’s explore how this powerful scheme can empower your business too.
What is a CGTMSE Loan?
The Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) loan scheme is a Central Government-backed scheme that allows Micro and Small enterprises to avail of collateral-free loans. Against this protection, borrowers pay an Annual Guarantee Fee (AGF) for availing of this protection.
AGF refers to a premium linked to the CGTMSE loan scheme. By paying this fee, borrowers can access the advantages of the CGTMSE scheme without needing to provide collateral, since the government guarantees the loan.
Key Features: –
- Collateral-free loan: up to ₹5 crore.
- Coverage: Both new and existing enterprises.
- Hybrid structure: Allows partial collateral alongside CGTMSE guarantee.
- Eligibility: New and existing MSEs in manufacturing, services, and trading sectors.
- Loan types covered: Term loans, working capital, Letters of credit, and bank guarantees
Click here for the Micro & Small Enterprise Criteria
What choose CGTMSE loans?
Feature | CGTMSE Bank Loan | Normal Bank Loan |
Collateral Security | Not Required | Mandatory (Property, FD, etc) |
Loan Amount | Up to ₹5 crore | Based on the collateral Value |
Eligibility | Micro & Small Enterprise | All Enterprise |
Annual Guarantee Fee (AGF) | Fixed Percentage | Not Applicable |
Subsidy Eligibility | Eligible | Eligible |
Application Process | Short & Quick | Lengthy |
Did You Know?
If your manufacturing unit is in Gujarat, you can get 100% reimbursement of the AGF paid under the CGTMSE scheme. Additionally, CGTMSE loans are eligible for various government subsidies such as capital and interest subsidies.
How We Can Help You
Navigating the CGTMSE loan process can be complex, but our team of experts is here to simplify it for you. Here’s how we assist:
- Loan application support: We help you prepare and submit a compelling loan application.
- Project report preparation: Tailored project reports with financial projections that meet banker requirements.
- Compliance guidance: Ensure adherence to all CGTMSE norms.
- Streamlined process: Save time and focus on growing your business while we handle the paperwork.
- Subsidy: Ensure you will get the maximum benefits of Subsidies
FAQs About CGTMSE Loans
1.Who can apply for a CGTMSE loan?
New and existing Micro and Small Enterprises engaged in manufacturing, service, or trading activity.
(excluding agriculture, SHGs, and JLGs).
2.What is the maximum loan amount? Up to Rs. 5 Crore
3.What is the typical processing time for a CGTMSE loan?
It typically takes 15-20 working days.
4.Which bank provides CGTMSE Loans?
Most of the Public Sector Banks, Private Sector Banks, Regional Rural Banks, Foreign banks, Financial
Institutions like the Small Industries Development Bank of India, and Scheduled Urban Co-Operative
Banks are providing the Loans under CGTMSE Scheme.
For more details kindly check the https://cgtmse.in/Home/VS/49
5.Is there a fee for availing CGTMSE Scheme?
Yes, borrowers must pay an Annual Guarantee Fee (AGF). The fee varies based on the loan amount:
Loan amount Standard Rate (AGF)
Loan amount | Standard Rate (AGF) |
0-10 Lakh | 0.37 |
Above 10-50 Lakh | 0.55 |
Above 50-1 crore | 0.60 |
Above 1-2 Crore | 1.20 |
Above 2-5 Crore | 1.35 |
6.Is there any subsidy for the CGTMSE fees (AGF)paid?
Yes, Fees paid for the CGTMSE Term loan will be 100% reimbursed for manufacturing units located in Gujarat.
7.CGTMSE Loan eligible for the Gujarat Government Subsidy?
Yes, CGTMSE Term Loan is eligible for various subsidies like capital & Interest Subsidy.
Conclusion
The CGTMSE loan scheme is a game-changer for MSMEs, providing the financial support needed to grow without collateral. Whether you’re starting or scaling your business, this scheme empowers you to achieve your dreams.
Ready to take the next step? Contact SDS Fin Advisory LLP today for expert-tailored assistance in securing your CGTMSE loan benefits and maximizing your subsidies.