Colatteral Free Loan
Loan setup takes about 7 working days
What Is Colatteral Free Loan ?
What Is Colatteral Free Loan?
As indicated by the MSMED Act 2006 the MSME segment has been largely classified as the Manufacturing Enterprises & Service Enterprises
Manufacturing Sector Enterprise – this enterprise is involved in manufacturing or production, preservation or processing of goods.
Service Sector Enterprise – in this type of enterprise they provide or render services.What is the goal of the MSME scheme?
Where do the businesses utilize the money?
- Working capital requires the Fund-based and Non-fund-based scheme that includes term loan for construction of office, building, and acquiring of machines/ equipment that also involves development and modernization of unit.
- To achieve a collateral-free loan for startups and SME, the proposed revenue amount of the business should be at least the four times of the loan asked. Manufacturing companies also need to confirm their assets and stock statements.
The below table shows the expenditure ceilings for the classification of Micro, medium or Small Sector Enterprises.
Get a free consultation to know more about collateral-free loans for SME and startups by taking an appointment with an Unfolding Tax Advisor
An Entrepreneur should always
Get in touch with the relevant financial institution that is either an NSIC, bank branches, State Financial Corporation, etc.
Applications in designated proformas need to be submitted along with project report that includes/availability of land/building/proof of ownership, proof of habitation, collateral securities (if or wherever applicable) etc.
The loan is provided institution if the application is according to the norms.
Documents Needed For Collateral Free Loans For Startups And SME?
Company Registration Certificate: The certificate of merger refers to a legal document describing the structure of a company or corporation. This license is for forming a business/corporation declared by the state government. Its exact purpose depends upon the legal system in which it will be applicable.
MSME registration: This registration is for the businesses under the MSMED Act.
Business proposal: The written records or documents declaring the sell from the seller to the proposed buyer.
Individuals IT returns for three years: Every specific filer who makes a certain amount of income need to file this type of tax return, which is the statement of incomes from various sources of earnings, tax liability, therefore, features of tax paid and any returns that have to be given by the government. If a company remains in business for more than a year then the company IT returns as well.
Provisional balance sheet: This is the commercial/financial document generally used by corporations to plan for reporting financial information financial audits or for any reason.
Project Report: This is the document which gives a statement of the proposal of the project for ascertaining the possibilities of the proposed activity/plan. The project report includes information regarding
Machinery & accessories along with their rates and specifications
Land & building needed
Manufacturing capacity per annum
Requirements for raw materials
Power & water needed
Price of the project and production
Financial reports & economic viability of the project
*Above mentioned terms & processes may vary from bank to bank and period to period.
Frequently Asked Questions
The most important eligibility and decisive factor is return on the investment and profitability of the project proposed to be set up. Any financial institution will support the project if repayment is assured. Get a free consultation for collateral free loans for startups and SME by scheduling an appointment with an Unfolding Tax Advisor
- Eligibility criteria
- Technical/economic capability
- Promoters contribution
- Ability to repay loan
- Collateral securities/guarantee
Get a free consultation for collateral free loans for startups and SME by scheduling an appointment with an Unfolding Tax Advisor
Prior to approaching a banker or an investor to get funds, entrepreneurs should first prepare a pitch that explains the business model, entrepreneur’s background, revenue model, estimated sales, estimated profit, estimated growth rate and returns. Return on investment is a key factor for both banks and equity investors. Therefore the entrepreneur should put together a detailed project report (defined below). Get a free consultation for collateral free loans for startups and SME by scheduling an appointment with an Unfolding Tax Advisor