The Government of India has launched the Credit Guarantee Fund Trust for Micro and Small Enterprises or CGTMSE scheme for small and micro enterprises to help them finance borrowers without any stress.
It lets lenders offer collateral-free loans to SMEs via the scheme to provide credit guarantee cover to the lenders. The maximum cap for these loans is Rs. 200 lakhs for small and micro enterprises.
Major NBFCs, financial institutions can avail finance under this scheme. Moreover, all existing borrowers new and old micro and small enterprises are eligible for loans under this scheme.
Here’s what you need to know about the CGTMSE scheme -
#1 Applicants must provide a business plan to avail funds under this scheme. This plan must be in good detail and include various business statements such as balance sheet, cash flow and other financials.
#2 Business entities registered as Limited Liability Partnership, Partnerships, Private Limited and closely held Limited companies must provide their proof of business. While entities not eligible for this scheme are educational institutions, training institutions, self-help groups, and service-oriented retail traders.
#3 Businesses can easily apply online for the loan with minimal paperwork. However, they must have a credit score of 750+ or more to qualify for the loan.
In addition, CGTMSE scheme guarantees a repayment of up to 75% of the loan amount with a maximum cap of Rs. 62.5 - 65 lakhs for loans up to Rs. 50 lakhs.
• The trust provides a maximum guarantee of 50% for loans above Rs.50 lakhs and less than Rs.100 lakhs.
• It provides a guarantee of up to 85% to micro enterprises for loans up to Rs. 5 lakhs.
• It guarantees repayment of up to 80% of the loan amount for MSMEs headed by women and loans provided in the North-East Region (NER).
It lets lenders offer collateral-free loans to SMEs via the scheme to provide credit guarantee cover to the lenders. The maximum cap for these loans is Rs. 200 lakhs for small and micro enterprises.
Major NBFCs, financial institutions can avail finance under this scheme. Moreover, all existing borrowers new and old micro and small enterprises are eligible for loans under this scheme.
Here’s what you need to know about the CGTMSE scheme -
#1 Applicants must provide a business plan to avail funds under this scheme. This plan must be in good detail and include various business statements such as balance sheet, cash flow and other financials.
#2 Business entities registered as Limited Liability Partnership, Partnerships, Private Limited and closely held Limited companies must provide their proof of business. While entities not eligible for this scheme are educational institutions, training institutions, self-help groups, and service-oriented retail traders.
#3 Businesses can easily apply online for the loan with minimal paperwork. However, they must have a credit score of 750+ or more to qualify for the loan.
In addition, CGTMSE scheme guarantees a repayment of up to 75% of the loan amount with a maximum cap of Rs. 62.5 - 65 lakhs for loans up to Rs. 50 lakhs.
• The trust provides a maximum guarantee of 50% for loans above Rs.50 lakhs and less than Rs.100 lakhs.
• It provides a guarantee of up to 85% to micro enterprises for loans up to Rs. 5 lakhs.
• It guarantees repayment of up to 80% of the loan amount for MSMEs headed by women and loans provided in the North-East Region (NER).
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