Long and medium term loans are provided by SFCs, SIDBI and SIDCs. Banks also finance term loans. This type of financing is needed to fund purchase of land, construction of factory building/shed and for purchase of machinery and equipment. The short-term loans are required for working capital requirements, which fund the purchase of raw materials and consumables, payment of wages and other immediate manufacturing and administrative expenses. Such loans are generally available from commercial banks. The commercial banks also sanction composite loan comprising of working capital and term loan up to a loan limit of Rs.1 crore.
For loans from financial institutions and commercial banks a formal application needs to be made. The details of documentation that need to be provided with the loan application are indicated below:
- Documentation for Loan Application
- Balance Sheet and Profit Loss Statement for last three consecutive years of firms owned by promoters
- Income Tax Assessment Certificates of Partners/Directors
- Proof of Possession of Land/Building
- Architect’s estimate for construction cost
- Partnership deed/Memorandum and Articles of Associations of Company
- Project Report
- Budgetary Quotations of Plant and Machinery
A sanction or rejection letter is issued by bank after its assessment of the application. After receiving a sanction letter, applicants need to indicate in writing their acceptance of terms and conditions laid down by FI/Banks.
Subsequently, loan is disbursed according to the phased implementation of the project. In today’s environment there are other choices apart from commercial banks and Government owned financial institutions. These options include venture capital funds and non-government finance companies.
Setting up a Micro, Small and Medium Enterprise
The main steps involve in setting up a Micro, Small & Medium Enterprise are as below :-
- Project Selection
- Technology and Machinery
- Arranging Finance
- Unit Development
- Udyog Aadhaar Memorandum & Addresses of DICs
- Quality Certification
"Setting up a new unit is a big challenge."
The overriding reason for anyone to think of establishing a MSME unit can be summarised in one word - OPPORTUNITY. If one can see an opportunity to provide a product or service in a manner to generate sufficient surplus, then one way is to start up a MSME unit. This is all the more true if one believes in the maxim, "Small is Beautiful" Opportunities emerge out of ideas that one comes across by thinking about lives of friends and neighbours. This can generate ideas about products and services that can make things easier, and improve quality of life of people.
- Reports/project Profiles
- Self Employment Book
1- Aadhaar Card ( mobile no.add to aadhaar mandatory )
2- Pan Card
3- Bank Paasbook
5- Startup information
6- Mobile number
7- Email id
OTP on Mobile(linked with Aadhaar) will be sent for confirmation. Keep your Mobile with you during registration.
1- You can use ' REGISTERED TO GOVERNMENT ' for your startup.
2- Unless your Startup turnover turns 20,00000 annually, you do not need any other license, only MSME UDAYOG AADHAR NUMBER license is enough.
3- If you have not this Licence, Bank never give you loan.
Note- Government provide this Licence free, This Amount is our service fees only.