They say better late than never, Government came up with some relief for the sector which contributes 25 percent of the GDP only from the service sector and around 33 percent to manufacturing output of the country.
- Rs 3,000bn collateral-free automatic loans for businesses, including MSMEs. 100 percent credit guarantee cover to Banks and NBFCs on principal and interest. It can be availed till 31st October 2020.
- The government will facilitate the provision of Rs 200bn subordinate debt for stressed MSMEs. The government will provide a support of Rs 40bn to CGTMSE(Credit Guarantee Fund Trust for Micro and Small Enterprises).
- Rs 500bn equity infusion through Fund of Funds, which will help expand MSME size and capacity. Fund of Funds corpus of Rs 100bn will be set up.
- The revised definition of MSMEs which is introduced recently eliminates the distinction between manufacturing and services. As a result, a micro firm is one with an investment of up to Rs 1 crore and turnover but Rs 5 crore, the tiny firm has an investment of up to Rs 10 crore and turnover up to Rs 50 crore and the medium-firm is going to be one with an investment of up to Rs 20 crore and turnover under Rs 100 crore.
- Global tenders not allowed to participate in government procurement tenders of up to Rs 2bn. This will help local MSMEs increase their business.
- E-market linkage for MSMEs in replacement for trade fairs and exhibitions. MSME receivables from Government and CPSEs(Central public sector enterprises) are to be released in 45 days.
- Rs 25bn EPF support for businesses and workers extended by another 3 months.
- EPF contribution reduced for businesses and workers for 3 months by Rs 67.5bn.
- Rs 300bn special liquidity scheme for NBFCs/ HFCs/ MFIs through investment in both primary and secondary market transactions in investment-grade debt papers. Securities are being guaranteed by the Government.
- Rs 450bn Partial credit guarantee scheme for NBFCs. Scheme extended to cover borrowings such as primary issuance of bonds/ CPs. First 20% loss to be borne by the Government.
- Rs 900bn liquidity injection by PFC/REC in DISCOMS against receivables.
- Extension of up to 6 months for contractors. Government agencies to partially release bank guarantees.
- Extension in Real Estate Projects registration and completion data by 6-months for all registered projects expiring on or after 25th March 2020, under RERA.
- Rs 500bn liquidity through TDS/TCS rate reduction. Applicable till 31st March 2021.
- Pending refunds to be issued immediately. Due date of all income-tax return for FY20 extended to 30th November 2020 and Tax audit to 31st October 2020.
- Date of assessments for those getting barred on 30th September 2020 extended to 31st December 2020 and those getting barred on 31st March 2021 will be extended to 30th September 2021.
- Period of Vivad se Vishwas Scheme extended to 31st December 2020.
SME/MSME Loan FAQs
What Are The Documents Required For SME/MSME Loan?
Documents which are required for SME/MSME loan are mentioned below
- Duly filled Application form
- Identity Proof: PAN card, driving license, passport, Voter’s identity card
- Residence Proof: lease agreement, passport, telephone and electricity bills, trade license, sales tax certificate, ration card
- Age Proof: Voter’s identity card, passport, Photo, PAN card
- Last 12 months’ bank statement
- Business registration proof
- Proprietor(s) PAN Card Copy
- Partnership deed copy
- Company PAN card copy
- copy of last two years Balance Sheet and P&L
- Sales tax documents
- Municipal tax document
Who Is Eligible For The SME/MSME Loan?
The eligibility criteria for SME/MSME loan is mentioned below:
- A person who wishes to apply for SME/MSME loan requires to have a running business for at least 3 years.
- The applicant is also expected to be within the age bracket of 25 to 55 years and must have the business’ IT returns filed for at least the past 1 year.
How can I get an SME/MSME loan?
If you wish to avail of an SME/MSME loan then in addition to the fulfillment of the eligibility criteria and you also need to have a minimum credit score of 750 with no records of default.
Who Can Avail SME/MSME Loan?
People who are eligible to avail SME/MSME loan are as follow:
- Self-employed professionals
- Traders and others
How To Apply For An SME/MSME Loan?
Please read further to apply for an SME/MSME loan.
- Visit below-mentioned link which is the national portal for MSME registration
- Fill in the required details such as Name of the Entity and Aadhaar number.
- Once you have filled in the required details you just require to click on the following option “VALIDATE & GENERATE OTP.”
- This will be followed by an OTP on your mobile number which is directly linked to your Aadhaar card. Thereafter filling the OTP, click on “Validate” which would direct you to an application form.
- Fill in the details required and “SUBMIT” the same only when you have completed the application form, thereafter click “OK” to confirm whether all the details are filled correctly or not.
- Lastly, you will receive an OTP on your mobile number which is linked to your Aadhaar card. Fill-in the OTP and click “Final Submit” to submit the application form for the MSME loan.