Business Loan Without Collateral: The government has taken a special initiative to promote micro and small industries in the country. Now new and existing entrepreneurs can get a business loan up to Rs 2 crore without any collateral. This has been possible through CGTMSE, i.e., the Micro and Small Enterprises Credit Guarantee Fund Trust Scheme. The specific objective of this scheme is to help those small businessmen who do not have property to give as a guarantee to the bank.
Let us tell you that CGTMSE is a trust that the Government of India, through Small, Medium and Medium Industries and SIDBI, jointly stabilises. This scheme provides a guarantee cover to banks and financial institutions. If a borrower is unable to repay the loan, this trust provides a large portion of it. For this reason, banks are ready to give loans without any security.
Who can benefit from this arrangement?
Let us tell you that both new and old micro and small enterprises are eligible for this scheme. This includes manufacturing and service sector businesses, etc. After the recent amendment, you can now take a loan of up to Rs 2 crore without collateral under this scheme. All public sector banks, selected private banks, regional rural banks and many non-banking financial companies provide loans under this scheme.
Know the features of the scheme.
Let us tell you that if we talk about the speciality of this scheme, you do not need to mortgage your land, house or gold with the bank. With this scheme, the guarantee cover for women entrepreneurs, north-eastern states and micro-enterprises is up to 85 per cent. If you want to get a loan of more than Rs 2 crore, you can avail the CGTMSE guarantee on the remaining amount by mortgaging part of your property. Along with this, the scheme offers competitive interest rates, which the RBI decides according to its instructions.
How to apply?
Let us tell you that to avail the benefits of this government scheme, the entrepreneur will first have to prepare a detailed business plan. After completing this step you can go to your nearby bank branch and apply for a loan under the CGTMSE scheme. If the bank is satisfied with your business model, it will directly approve the loan by obtaining guarantee cover from the trust.