Collateral-Free Loan: How to Get SME Loan Without Guarantee

Collateral-Free Loan: How to Get SME Loan Without Guarantee

The government’s Credit Guarantee Fund for Micro and Small Enterprises (CGTMSE) is among the biggest and most prominent initiatives taken to provide micro and small enterprises (MSEs) with collateral-free loans

The government’s Credit Guarantee Fund for Micro and Small Enterprises (CGTMSE) is among the biggest and most prominent initiatives taken to provide micro and small enterprises (MSEs) with collateral-free loans

Finance Minister Nirmala Sitharaman in her budget speech this year had announced an infusion of Rs 9,000 crore in the CGTMSE corpus, effective April 1, 2023.

Finance Minister Nirmala Sitharaman in her budget speech this year had announced an infusion of Rs 9,000 crore in the CGTMSE corpus, effective April 1, 2023.

Image: Twitter/nirmalasitharaman

All new and existing MSEs in manufacturing or service activity excluding agriculture, and self-help groups (SHGs) can seek loans with CGTMSE cover.

All new and existing MSEs in manufacturing or service activity excluding agriculture, and self-help groups (SHGs) can seek loans with CGTMSE cover.

A loan can be raised by more than one bank and/or financial institution jointly and/or separately up to Rs 5 crore subject to the ceiling amount of individual lender.

A loan can be raised by more than one bank and/or financial institution jointly and/or separately up to Rs 5 crore subject to the ceiling amount of individual lender.

For loans up to Rs 5 lakh, the guarantee cover available for micro enterprises is up to 85 per cent, for loans between Rs 5 lakh and Rs 5 crore, the cover is up to Rs 75 per cent.

For loans up to Rs 5 lakh, the guarantee cover available for micro enterprises is up to 85 per cent, for loans between Rs 5 lakh and Rs 5 crore, the cover is up to Rs 75 per cent.

For women entrepreneurs/ SC-ST entrepreneurs/ MSEs situated in aspirational districts/ ZED-certified MSEs, etc., the guarantee cover available is up to 85 per cent for loans up to Rs 5 crore.

For women entrepreneurs/ SC-ST entrepreneurs/ MSEs situated in aspirational districts/ ZED-certified MSEs, etc., the guarantee cover available is up to 85 per cent for loans up to Rs 5 crore.

For MSEs based Northeast region, Jammu & Kashmir and Ladakh, the cover limit is up to 80 per cent for loans up to Rs 50 lakh and up to 75 per cent for loans between Rs 50 lakh and Rs 5 crore.

For MSEs based Northeast region, Jammu & Kashmir and Ladakh, the cover limit is up to 80 per cent for loans up to Rs 50 lakh and up to 75 per cent for loans between Rs 50 lakh and Rs 5 crore.

The scheme had added microfinance institutions (MFIs) last year to the list of member lending institutions (MLIs).

The scheme had added microfinance institutions (MFIs) last year to the list of member lending institutions (MLIs).

Udyam registration has been made mandatory since January 16, 2023 to avail loans under the CGTMSE.

Udyam registration has been made mandatory since January 16, 2023 to avail loans under the CGTMSE.

CGTME loan application along with passport-size photos, business project report, business registration certificate, CGTMSE loan coverage letter, and loan approval copy from the bank.

CGTME loan application along with passport-size photos, business project report, business registration certificate, CGTMSE loan coverage letter, and loan approval copy from the bank.

Documents Required

Documents Required

Images: Pexels, Pixabay

Images: Pexels, Pixabay