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kriti2024 · 3 months

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Acquiring a loan against property (LAP) can be an efficient way to secure significant funds for various personal and business needs. Whether you're looking to finance your child's education, cover medical expenses, or expand your business, a loan against property provides a reliable solution. This comprehensive guide will walk you through the process of obtaining a loan against property, detailing eligibility criteria, required documents, application steps, and tips to ensure approval.

Understanding Loan Against Property (LAP)

A loan against property is a type of secured loan where borrowers pledge their residential or commercial property as collateral to obtain funds. Unlike unsecured loans, LAP generally offers higher loan amounts and lower interest rates due to the reduced risk for lenders. The loan amount sanctioned usually ranges between 50% to 70% of the property's market value.

Eligibility Criteria

Before How to get Loan Against Property against property, it's essential to understand the eligibility criteria set by lenders. Here are the common requirements:

Age: Applicants should typically be between 21 and 65 years old.

Employment Status: Both salaried and self-employed individuals can apply.

Income: A stable and sufficient income to repay the loan is crucial.

Property Type: The property should be clear of any legal disputes and fully constructed.

Credit Score: A good credit score (usually above 650) increases your chances of approval.

Documents Required

To apply for a loan against property, you need to submit various documents for verification. Here is a list of commonly required documents:

Identity Proof: Passport, Aadhar card, PAN card, or voter ID.

Address Proof: Utility bills, rental agreement, or property tax receipts.

Income Proof:

Salaried Individuals: Salary slips, bank statements, and Form 16.

Self-employed Individuals: Income tax returns, business proof, and bank statements.

Property Documents: Title deed, no objection certificate (NOC), and property insurance.

Photographs: Passport-sized photographs of the applicant.

Steps to Apply for a Loan Against Property

Evaluate Your Requirements:

Determine the amount you need and the purpose of the loan.

Assess your ability to repay the loan within the stipulated tenure.

Research and Compare Lenders:

Compare interest rates, processing fees, loan tenure, and other terms offered by various banks and financial institutions.

Use online tools and loan calculators to evaluate different options.

Check Eligibility:

Ensure you meet the eligibility criteria of the chosen lender.

Use online eligibility calculators to get an estimate.

Prepare Documentation:

Gather all required documents to avoid delays.

Ensure all documents are up-to-date and accurate.

Fill Out the Application Form:

Complete the application form with accurate personal, financial, and property details.

Submit the form online or visit the lender's branch.

Verification and Valuation:

The lender will verify your documents and assess the property's market value.

A third-party evaluator may inspect the property for valuation.

Loan Approval and Sanction:

Upon successful verification, the lender will approve the loan.

You will receive a sanction letter detailing the loan amount, interest rate, tenure, and other terms.

Signing the Agreement:

Review the loan agreement carefully.

Sign the agreement and submit post-dated cheques or set up an auto-debit facility for EMI payments.

Disbursement of Funds:

The loan amount will be disbursed to your bank account after the agreement is signed.

You can now use the funds for the intended purpose.

Tips to Ensure Approval

Maintain a Good Credit Score:

Pay your bills and existing loans on time.

Avoid multiple loan applications within a short period.

Accurate Documentation:

Ensure all documents are accurate and complete.

Any discrepancies can lead to delays or rejection.

Property Evaluation:

Choose a property with a high market value and clear legal status.

Keep the property well-maintained to ensure a favorable valuation.

Stable Income Source:

Demonstrate a stable and sufficient income to assure the lender of your repayment capability.

Provide additional income proofs, if any.

Avoid Existing Debt:

Minimize existing liabilities before applying for a loan against property.

Lower debt levels improve your debt-to-income ratio, increasing approval chances.

Benefits of Loan Against Property

Lower Interest Rates:

Due to the secured nature of LAP, interest rates are typically lower compared to unsecured loans.

Higher Loan Amount:

You can borrow a significant amount based on the property's market value.

Flexible Usage:

The loan amount can be used for various personal and business needs.

Longer Tenure:

LAP offers longer repayment tenures, often up to 15 years, reducing the EMI burden.

Tax Benefits:

Interest paid on LAP can be claimed as a tax deduction if the loan is used for business purposes or purchasing another property.

Conclusion

Applying loan against property can be a practical solution to meet substantial financial requirements. By understanding the eligibility criteria, preparing necessary documents, and following the application process, you can secure a loan with favorable terms. Maintaining a good credit score, choosing a valuable property, and demonstrating a stable income are crucial to ensuring approval. With its numerous benefits, a loan against property can be an efficient financial tool for various needs.

#apply loan against property #How to get Loan Against Property #loan against property eligibility

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industrialsolutioniid · 3 months

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A Complete Guide of Documents Required for Loan

Taking out a loan is essential to achieving personal or business financial goals. However, when you go to a bank for a loan, you need to see and understand many documents. Whether you are a homemaker, a business owner, or someone with personal needs, you may need a loan at any time. If you are thinking of taking a loan, you first need to understand your requirements, assess your assets, and then you will also need various documents. In today's blog, we will discuss in detail the documents required for various types of loans, so that whenever you go to take a loan, you are not disappointed.

Why are documents required for loan applications?

Lenders ask for various documents required for loan applications to assess your certified repayment ability and the viability of your monetary needs. These documents help them evaluate the risk associated with lending you money. Whether you’re applying for a personal loan, business loan, or a mortgage, being well-prepared with the necessary documents can expedite the approval process.

Documents Required for Loan Approval

When applying for a personal loan, here are the primary documents required for loan processing:

Proof of Identity: This includes government-issued IDs like a passport, driver’s license, or national ID card.

Proof of Address: Utility bills, rental agreements, or property tax receipts can serve this purpose.

Income Proof: Recent salary slips, bank statements, and tax returns demonstrate your ability to repay the loan.

Employment Verification: For employment verification, you might need a letter from your employer or an employment agreement.

Credit Report: A current credit report helps lenders evaluate your credit history and score.

Business Loans: Specific Documents Required for Loan Applications

For business loans, the documents required for loan approval are more comprehensive, reflecting the complexity and scale of the financial assessment:

Business Project Report: This outlines your business plan, including market analysis, financial projections, and business goals.

Bankable Project Report: A detailed version of your business project report that includes thorough financial analysis and risk assessment, making it more suitable for lenders.

Customized Bankable Project Report: Tailored to meet specific lender requirements, this report can increase your chances of loan approval.

Prototype Project Report: For startups or new business ventures, this report includes prototypes or models of your product or service, showcasing feasibility and innovation.

Read Blog- Mudra Loan - Apply Online, Interest Rate, Types, Eligibilty, Bank List

How to Make a Perfect Project Report for Business Loan

Mortgage Loans: Important Documents Required for Loan Processing

Applying for a mortgage requires a detailed examination of your financial status and property details. Here are the essential documents required for loan approval in this category:

Property Documents: Sale deed, property tax receipts, and a no-objection certificate (NOC) from the builder or society.

Down Payment Proof: Bank statements or receipts showing the source of the down payment funds.

Income and Employment Verification: Similar to personal loans, but often with additional documentation such as business financial statements if self-employed.

Credit Report and Score: A good credit score can significantly impact your mortgage terms and interest rates.

Insurance Documents: Proof of home insurance to protect the property against unforeseen events.

Tips for Preparing Your Documents Required for Loan Applications

Organize Your Documents: Ensure all documents required for loan applications are well-organized and easily accessible. This includes making copies and keeping digital backups.

Check for Completeness: Double-check that you have all necessary documents required for loan approval before submitting your application to avoid delays.

Update Information: Make sure all your documents are current, including your credit report, bank statements, and tax returns.

Customise Your Reports: If you’re submitting a business loan application, consider preparing a customized bankable project report to align with specific lender requirements.

Common Challenges and Solutions

Missing Documents: One of the common challenges applicants face is missing some documents required for loan approval. To avoid this, create a checklist based on the lender’s requirements and cross-check each item.

Incomplete Business Reports: For business loans, an incomplete or poorly prepared business project report or bankable project report can hinder your application. Investing time and possibly consulting a financial expert to create a comprehensive and customized bankable project report can make a significant difference.

Low Credit Score: Having a low credit score can make it difficult to get approved for a loan. It's important to keep an eye on your credit report regularly and work on improving your score. You can do this by paying off debts, fixing any mistakes on your report, and being mindful of how much credit you use.

Conclusion

Understanding and preparing the documents required for loan applications is an important step in the loan approval process. Whether you’re seeking a personal loan, business loan, or mortgage, being organized and thorough with your documentation can significantly enhance your chances of success. From personal identification to a detailed business project report, every document plays an important role in presenting a clear and trustworthy picture to lenders.

Taking the time to gather and prepare the necessary documents not only streamlines the application process but also demonstrates your commitment and reliability to potential lenders. By using the advice given in this detailed guide, you can confidently manage the process of applying for a loan and come closer to reaching your financial objectives.

How to get a project report?

Get your Customized Bankable Project Report with IID

#Documents required for Loan #business project report

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sarkariyojnaye-org · 6 months

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Sarkari Yojana List 2024

Sarkari Yojnaye:All latest government schemes-Sarkari Yojana

The Government of India implements a wide range of Sarkari Yojana, or government schemes, to uplift the lives of its citizens. These yojanas cover various sectors, including healthcare, education, employment, and social welfare. In this article, we present a comprehensive list of Sarkari Yojana for 2024, empowering you with the knowledge to access these benefits and improve your well-being.

Sarkari Yojana List 2024:

Healthcare:

Ayushman Bharat Pradhan Mantri Jan Arogya Yojana (AB-PMJAY): Provides health insurance coverage to economically weaker sections of society.

National Health Mission (NHM): Aims to improve healthcare infrastructure and provide essential health services.

Pradhan Mantri Suraksha Bima Yojana (PMSBY): Offers accidental death and disability insurance to bank account holders.

Education:

Sarva Shiksha Abhiyan (SSA): Focuses on providing free and compulsory education to children aged 6-14 years.

Mid-Day Meal Scheme: Provides nutritious meals to schoolchildren to improve their health and attendance.

Beti Bachao, Beti Padhao Yojana: Aims to empower girls through education and reduce gender inequality.

Employment:

Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS): Guarantees 100 days of employment per year to rural households.

Pradhan Mantri Kaushal Vikas Yojana (PMKVY): Provides skill training to unemployed youth to enhance their employability.

National Career Service (NCS): Offers career counseling, job placement, and skill development services.

Financial Assistance:

Pradhan Mantri Awas Yojana (PMAY): Provides financial assistance for housing to economically weaker sections and low-income groups.

Pradhan Mantri Kisan Samman Nidhi (PM-KISAN): Offers financial support to small and marginal farmers.

Mudra Yojana: Provides loans to micro and small businesses to promote self-employment.

Social Welfare:

Integrated Child Development Services (ICDS): Offers a range of services for the holistic development of children under six years of age.

National Social Assistance Programme (NSAP): Provides social pensions to senior citizens, widows, and persons with disabilities.

Swachh Bharat Mission: Aims to improve sanitation and hygiene in rural and urban areas.

How to Apply for Sarkari Yojana:

The eligibility criteria and application process for Sarkari Yojana vary depending on the specific scheme. Generally, you can apply through:

Online portals: Many yojanas have dedicated websites where you can apply online.

Government offices: You can visit the relevant government office or department to obtain application forms and submit them in person.

Common Service Centers (CSCs): These centers provide assistance with online applications and other government services.

Conclusion:

The Sarkari Yojana List 2024 is a valuable resource for Indian citizens, providing access to essential services, financial assistance, and opportunities for empowerment. By understanding the different types of yojanas available and the application process, you can harness these benefits and improve your life and the lives of your loved ones.

Visit Us : https://sarkariyojnaye.org/

#Sarkari Yojana List 2024

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msmeregin · 9 months

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Get mudra loan Benefits with MSME registration

Ever wanted to get mudra loan Benefits? If you're an MSME or Micro and Small Medium Enterprises, this article is for you. With the registration process becoming more straightforward, this article will explain MSME registration with Mudra Bank.

How to get mudra loan Benefits?

Mudra loans can be used for a variety of purposes. While opting for a mudra loan, many people look forward to the benefits attached to it. With the advantages of getting a mudra loan, one can easily select their desired loan amount. Some of them are a flexible repayment schedule, quick loan processing, and an easy repayment method. If you are looking for a loan to buy your dream home or a vehicle, mudra loans are the best option. It's one of India's most popular online loan providers, working with banks to help you get rid of your financial burden and follow your dreams.

Is MSME registration required for Mudra Loan?

Were you thinking of starting a business or buying a property? Then, it is essential to ensure that you go through the registration process with msme. This way, your loan application will be processed faster, and you will easily access financing for future investments. As per the MSME registration notification, the Mudra bank gives a loan up to Rs. 10 Lakhs to the small and medium businesses within a prescribed limit of Rs. 20 million. The credit amount will be given in the form of a revolving loan, and it will be repaid with very cheap interest and principal installments.

How do I register under MSME registration?

MSMEs are required to register under msme with the Ministry of Micro, Small, and Medium Enterprises (MSME), and certain documents need to be submitted for MSME registration. The following is a rundown of what needs to be done for an MSME to be registered:-Applicant's name-Date of birth-Place of establishment-Main business activities-Authority issued by the competent authorities evidence that said the applicant would conduct the activity in question within the geographic area specified in the application.

Entrepreneurs with a vision can create a powerful brand for their company or service using the MSME platform. You can get a loan for your Business monitoring with MSME registration. MSME registration is one of the quickest and simplest ways to get a loan. You have to register yourself as an individual or company, and you are good to go!

What are the benefits of MSME registration?

Msme registration is registering a manufacturing company with the Ministry of Small and Medium Enterprise Development (MSMED). The primary benefit of MSME registration is that it can help you avail of loans from various banks such as SBI, UCO Bank, IDBI Bank, LIC, etc.

Registration with the MSME is mandatory for those who are not already registered. The benefits of MSME registration include any document issued by the ministry, a list of members, a copy of their membership card, and the opportunity to receive an MSME loan for their business startups with cheap interest, ie... a mudra loan.

Conclusion

Mudra loans are an excellent solution for everyone having a hard time getting a loan from banks. People have been searching for ways to manage their debt and spend less, which is why there has been an increase in the number of people who apply for mudra loans. Mudras are beneficial because they allow people to reduce their loan repayment amount and make payments in installments instead of all-inclusive financers. The Mudra loan is a good option for you to get the benefits of Mudra loan as a short-term loan. Moreover, you will be given a loan as per your eligibility. Finding a loan for MSME is not an easy task. There are many benefits to the loan, with low-interest rates and quick disbursement of funds.

Mudra loan Benefits : The Mudra loan is a unique loan facility offered by MSME Finance to its member MSMEs. It provides finance for the purchase or setup of capital assets/innovations, enabling the business to grow and contribute to national GDP. In addition, the facility fosters an innovative culture in industries by providing loans for projects that may not be bankable in the ordinary course.

#udyog aadhar free registration #msme free registration #msme registration free #print udyam certificate #free udyog aadhar registration #udyog aadhar update

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bollywood143114 · 2 years

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This cheap bike is the 'Mahi' favorite to ride among MS Dhoni's expensive vehicles

MS Dhoni Car-Bike Collection: Often referred to as the most successful captain in the history of Indian cricket, 'Captain Cool' Mahendra Singh Dhoni has set more than one record in his cricket career. MS Dhoni's cricket career tells the story of his dedication. In that situation, did you know that Mahendra Singh Dhoni not only loves cricket but also collects cars and bicycles. This is why Dhoni's fleet has so many expensive motorcycles and expensive luxury cars. One of these bikes is also very affordable. What's special is that Mahendra Singh Dhoni loves cycling. Recently, videos of Mahendra Singh Dhoni traveling on this bike are increasingly going viral on social media. Mahendra Singh Dhoni's video went viral. In this video, Mahendra Singh Dhoni can be seen wandering the streets of Ranchi, Jharkhand, on a bicycle. Shared on Instagram, the video, shared by Mahendra Singh Dhoni's fan club, shows him riding his bike around. So there too many people gathered around him. MS Dhoni is wearing riding gear. In the video, he first pulls his bike back, then sits on it and leaves the place. The red bike he rides in this video is a TVS Apache RR 310. This is the first time we have seen Mahendra Singh Dhoni touring on this bike. Specifications and price of TVS Apache RR 310 (TVS Apache RR 310 Price) Talking about the TVS Apache RR 310 from the Dhoni fleet, let us know that this bike was jointly designed by BMW and TVS. This bike looks very aggressive and sharp. This TVS Apache version of the BMW G310R is said to be equivalent. The TVS Apache RR 310 bike had a 313cc single cylinder, liquid cooled engine. The bike's power engine is said to be mated to a 6-speed gearbox, allowing it to go from 0-100 km/h in 7.17 seconds. Talking about the price of the TVS Apache RR 310, it says Rs 2.65 lakh. This price is based on the previous showroom. Bikes from Dhoni's collection (MS Dhoni Bike Collection) Everyone knows MS Dhoni has a collection of expensive cars and bikes. Talking about his bike collection in that situation, he says he has a lot of expensive bikes like Kawasaki Ninja H2, Confederate X132 Hellcat, Kawasaki Ninja ZX-14R, Confederate X132 Hellcat and Harley Davidson Fat Boy. Along with this, he also has an old design bike. The list also includes older bikes like the Yamaha RD 350, Yamaha RX100 and Suzuki Shogun. State Bank of India Mudra Loan Online Apply in 2023: Step-By-Step Best Guide DISCLAIMER We’ve taken all measures to insure that the information handed in this composition and on our social media platform is believable, vindicated and sourced from other Big media Houses. For any feedback or complaint, reach out to us at [email protected] Read the full article

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bankforguarantee · 3 years

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Pradhan Mantri Mudra Loan Yojana- Financeseva

what is PMMY Full Form

PMMY Full Form is Pradhan Mantri MUDRA Yojana is initiated by Hon’ble Prime Minister on 2015 with the aim to support financial assistance to micro & small enterprises.

How To Make Use Pradhan Mantri MUDRA Loan Yojana (PMMY)

Micro & Small Enterprises (MSEs) plays a vital role in developing economic growth of a country & India stands among them. Almost 40% GDP contributed by micro & small enterprises sector & ultimately create a huge number of job opportunities to new youngsters. Significantly, they are known as emerging key players of economic growth. Finance is an essential need of every business without a proper cash flow, it becomes restricted to manage things, wherein numerous finance Scheme introduced by Government of India & one such Scheme is Pradhan Mantri MUDRA Yojana.

What is Pradhan Mantri MUDRA Yojana?

The government of India initiated PMMY Murda Yojana Scheme through Mudra subsidiary SIDBI to support micro & small enterprises by providing financial assistance up to 10 lacs. Key Features Pradhan Mantri MUDRA Yojana:-

Under PMMY Scheme 3 varied categories sub-divided

Applicants can avail Mudra loan up to 10 lacs

Collateral-free loan facility is available

Maximum tenure up to 60 months

Nil processing fee

Varied Types of Mudra Loan:

Under the PMMY Scheme 3 varied categories sub-divided has followed under:- Shishu Loan:- Firstly, through Shishu PMMY Loan entrepreneurs can avail loan up to Rs.50,000 to finance their startup business.

Kishor Loan:- Secondly, Kishor Loan can be obtained to expand an existing business, under Kishor loan borrowers get loan up to 5 lacs.

Tarun Loan:- Thirdly, Under Pradhan Mantri Mudra Yojana –Tarun loan provides loan up to 10 lacs with 3-5 years of repayment period to repay loan & this type of facility can be used for business expansion purposes.

Which sector are eligible to get Mudra Loan?

Under PMMY Mudra loan following listed sectors are covered:-

Food Sector:- Business engaged in food sector performing activities like food shop, food distribution, preserving food through cold storage can get mudra loan to set up new or expand their existing business.

Transport Vehicle Sector:- Activities covered under transport vehicle sector include commercial vehicle agency, warehouse service, transport & logistics.

Textile Sector:- Business engaged in textile sector performing activities like handloom, weaving, khadi work, processing & apparel manufacturing can get PMMY loan to set up new or expand their existing business.

Traders & Shopkeepers:- Import & export trading unit along with other shopkeepers are eligible to get mudra loan.

PMMY Mudra Loan Eligibility Criteria

PMMY Mudra Loan has certain eligibility criteria that need to be checked before application. Kindly through the following points:-

Applicant must be a resident of India.

Applicant minimum age should be above 18 years.

Individuals/Private limited companies/sole proprietor firm/partnership firm or public limited companies.

All micro & small units engaged in manufacturing & services sector.

Loan requirement should not exceed more than 10 lacs.

New & existing businesses both are eligible.

Firms involved in farming activities are not eligible.

SMEs owned by women entrepreneurs are also eligible.

Documents Required for PMMY Mudra Loan

Pradhan Mantri Mudra Yojana requires the following documents to be submitted at the time of loan application.

Application form with attaching passport sized photographs

Business plan along with project report

Proof of special belonging categories like SC/ST/OBC & other minority communities.

KYC documents- (Aadhar Card, PAN Card, Voter ID, Passport & Driving License).

Company registration certificate & other required documents.

Business address proof – (rent/lease agreement, electricity bill, bank statement.

How to apply for PMMY Mudra Loan Online?

Step 1: – Applicants have to choose their preferred bank enlisted under PMMY Scheme, then download the application form & fill with correct value.

Step 2: – Once, you fill the Pradhan Mantri Mudra Yojana application form. Make sure all the blanks are filled to avoid any kind of tension at last time.

Step 3: – Upload the filled application form along with relevant documents on the online web portal of respective bank.

Step 4: – After the submitted, check your mail on regular basis. As bank representative can contact you anytime for further formalities.

Step 5: – Bank representative will go through your application & evaluate certain factors, if your application seems good then only, they would process for loan sanction.

PMMY Mudra Loan FAQ

What is PMMY Mudra loan?

The Government of India initiated Mudra loan under this credit facility PMMY exists, it aims to facilitate bank loan to micro & small enterprises whether it’s a new or existing firm.

What is Mudra loan interest rate?

Generally, starting 8% onwards rate is charged but bank to bank Mudra loan interest rate get varied.

Who are eligible for PMMY Mudra loan?

Under this scheme only existing business borrowers are eligible along specified categories segment are funded.

Can a women entrepreneur apply for Mudra loan?

Yes, Women entrepreneur with an ideal concept of business can apply for Mudra loan & get upto 10 lacs to startup business.

How much loan amount offered under PMMY scheme?

PMMY scheme divided into 3 categories named Shishu, Kishor & Tarun accordingly respective maximum loan amount of 10 lacs is granted.

How can I apply for Mudra loan online?

To apply online, applicant have to select the optional bank that come under PMMY Scheme – visit their official website-download the application form & fill them to submit with required documents.

Is there any separate application form for Tarun loan?

Yes, if you are applying for Shishu loan or Kishor loan general application form is used but in case you are applying for Tarun loan require separate application form that can be accessible at bank.

How much time given to repay Mudra loan?

To repay loan banks give tenure period ranging from 3 years to 5 years. If you want to repay loan before selected period then certain charges are levied.

#Pradhan Mantri Mudra Loan Yojana #pradhan mantri mudra loan yojana 2021 #pradhan mantri mudra loan yojana 2020 #pradhan mantri mudra loan yojana kya hai #प्रधान मंत्री मुद्रा योजना लोन 2021 #is there any subsidy for mudra loan #pradhan mantri mudra yojana personal loan

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rockajay · 3 years

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How To Get Best And Fast Small-Business Loans

Are you about to start your venture, or does one want to grow your business? Don’t know the way to urge the funds? The simplest thanks to fund your business is to require a loan. But not every small-business loan is well acquired. a number of the loans have severe credit history and documentation prerequisites, et al. have high interest rates. Some are government-ensured, long-term loans that take into consideration lower rates. There are various channels for entrepreneurs to borrow from, and therefore the decisions can get confounding.

If you’re looking to require a little bank loan to start out or improve your business, then here may be a list of the simplest and fast small-business loans for you to decide on from.

MSME LOAN

Presently the foremost discussed bank loan scheme is that the ‘MSME bank loan within 59 Minutes’. The govt launched this scheme for the primary time in 2018 in September. This scheme offers loans for monetary help and to encourage MSME development within the nation. The whole process takes a minimum of 8–12 days, but the approval or rejection is conceded within the initial 59 minutes after applying. MSME Loan may be a aid scheme wherein five approved public sector banks will give the funds. During this scheme, the rate relies upon the character of the enterprise and your credit rating.

Documents required to use in MSME for small-business-loan are:

· Business Registration Proof

· KYC documents of the applicant and also the business entity

· Bank statement for the last 9 months

MUDRA LOAN

This scheme offers loans on the pretext of ‘funding the unfunded.’ Since small ventures and new businesses are frequently left on their own to finance their endeavor, the general public authority proposed low-cost credit for such endeavors. The MUDRA loan is basically given to micro or small businesses working within the services area, trading, and manufacturing area.

The structures of the loans are:

Sishu Loans, which is up to Rs. 50,000/-

Kishor Loans, which is up to Rs. 5,00,000/-

Tarun Loans, which is up to Rs. 10,00,000/-

NATIONAL SMALL INDUSTRIES CORPORATION SUBSIDY

The National Small Industries Corporation Subsidy for little ventures offers two monetary advantages — Marketing Assistance and staple Assistance. This stuff help plan of NSIC covers both imported and indigenous raw materials. SMEs get the funds within the marketing support. SMEs use these funds to upgrade the value and competitiveness of their services and products.

CREDIT GUARANTEE FUND SCHEME FOR MICRO and tiny ENTERPRISES

First launched within the year 2000, the Credit Guarantee Fund Scheme for Micro and tiny Enterprises could be a aid scheme for micro and tiny businesses. CGTMSE offers capital loan of up to 10 lakh rupees with no collateral. When the loan amount exceeds 10 lakh rupees, the credit facility’s resources associated with the business unit are likewise considered security.

Different public and personal area banks covered under the plan finances the small-business loans under this scheme.

CREDIT LINK CAPITAL SUBSIDY SCHEME FOR TECHNOLOGY UPGRADATION

This technological up-gradation links to numerous processes inside the association, like producing, advertising, supply network, etc. Through the Credit Link Capital Subsidy Scheme, the general public authority intends to decrease the expense of production of products and services for tiny and medium ventures during this manner, permitting them to stay price competitive in national and international markets.

The Ministry of Small-Scale Industries controls the plan. The CLCSS offers an immediate front capital endowment of 15% for qualified businesses. Not with standing, the utmost amount available as a subsidy under this scheme is 15 lakh rupees.

India is that the only genuinely emerging market within the world at the instant. Small and medium businesses of the state contribute to a major a part of this development. That’s why the govt encourages people to start out their ventures and participate within the ‘Make in India’ project by providing them with small-business loans. These loans are easy and fast to avail of with none hassle. If you’re a tiny low business owner or decide to start your venture, then these are the financial schemes that may be useful for you.

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indiascheme · 4 years

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Government Schemes that Provide Financial and Economic Stability for Public s’ Benefit

For the benefit of the public, the government of our country has been focusing a lot on launching a lot of new reforms and schemes. These schemes and programs have helped many people of this country gain stability in terms of finance and economy. However, for this, people must be able to get the complete information and the important details. Sarkari Yojana is one such dedicated online platform that provides many ideas about the PM Narendra Modi schemes, government schemes, and alterations in the government schemes, latest updates, application forms, government mobile apps, and a lot more. Here is a list of the schemes launched by the government for the people's financial and economic stability.

Sukanya Samriddhi Yojna (SSY)

Prime Minister has inaugurated the Sukanya Samriddhi Yojna scheme under the notion of the “Beti Bachaao, Neti Padhaao” The main aim of the scheme is to make sure that all the expenses like marriage and education of a girl child have been managed with it. One family can have at the most two accounts of the two girl children. Apart from these two, you can open the third account only if the girls are triplets or twins. The parent can open these accounts as the child turns ten years old. SSY provides an interest rate of 8.6% and offers benefits to the child. Pradhan Mantri Jan Dhan Yojna (PMJDY)

PMJDY or Pradhan Mantri Jan Dhan Yojna is the government policy for the needy and poor people with the National Mission for Financial Inclusion. PM Narendra Modi announced this one on 15th August, 2014. This plan promises an insurance cover of around one lakh for accidents and rupees 30,000 for the life insurance cover. The cash can be transferred to all the accounts throughout India. Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY)

PMJJBY is open to people aged 18 to 50 years who have a bank account that consents to join/enable the auto-debit. Aadhar card will be the needed document for the KYC of your banks’ account. The term of Rs. 2 lakhs is renewable for one year from 1st June to 31st May. The Life Insurance Company introduces the policy to all other life insurers that can sell the plan on comparable terms with the requisite permissions and connect it to the banks. The life cover of rupees 2 lakhs is very much available at only rupees 330 per year.

Pradhan Mantri Mudra Yojana (PMMY)

The Narendra Modi Government initiated the Pradhan Mantri Mudra Yojana scheme in 2015 to promote micro-credit for small-scale enterprises up to 10 Lakh. Within this program, MUDRA, a branch of SIDBI, offers economic help to mediators such as the Small Finance Banks, Commercial Banks, RRBs, MFIs, and NBFCs for loans to the non-farm small/micro-enterprises and non-corporate. Here were some of the government schemes that have been for the advantages of the people s’ economy. Like this, more such schemes are mentioned in the Sarkari Yojana. Get more info from here!

#sarkari yojana

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vignaniasacademy · 4 years

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15-05-2020 Current affairs & Daily News Analysis

Haryana: National Institute of Technology-Kurukshetra implements ERP ‘SAMARTH’ NIT Kurukshetra has implemented Enterprises Resource Planning (ERP), SAMARTH to enhance productivity through better information management and automating the process in the institute.

About: SAMARTH, an e-Governance platform, is an Open Standard Open Source Architecture Automation Engine for Universities and Higher Educational Institutions. It caters to faculty, students and staff at a University/Higher Educational Institutions. It has been developed under National Mission of Education in Information and Communication Technology Scheme (NMEICT) of Ministry of Human Resource Development (HRD). This initiative will enhance the productivity through better information management in the institutes by seamless access to information, and its utilization for various purposes. Source : PIB ( Education ) Read UPSC Current affairs and Daily News Analysis from Best IAS Coaching in Bangalore Vignan IAS Academy Govt introduces Interest subvention on Working Capital Loans for Dairy sector Union Government has introduced a new scheme of Interest Subvention on Working Capital Loans for Dairy sector for supporting Dairy Cooperatives and Farmer Producer Organizations engaged in dairy activities for implementation during 2020-21.

About: Interest subvention will be given to Cooperatives and Farmer owned milk producer companies on working capital loan taken from banks and financial institutions between 1st April 2020 to 31st March 2021 for conversion of milk into conserved commodities and other milk products. The scheme has made provisions for providing interest subvention of 2% per annum, with an additional incentive of 2% per annum interest subvention to be given in case of prompt and timely repayment/interest servicing. The modified scheme envisages a budgetary provision of 100 crore rupees earmarked for the component Interest Subvention on Working Capital Loans for Dairy sector during 2020-21. The scheme will be implemented by this Department of Animal Husbandry through National Dairy Development Board (NDDB), Anand. Benefits: The scheme will help in providing stable market access to milk producers. This will help to ease out the working capital crisis for handling surplus milk and enable timely payment to the farmers. Source : All India Radio ( Economy ) Read UPSC Current affairs and Daily News Analysis from Best IAS Coaching in Bangalore Vignan IAS Academy Patent filed for low cost Personal Protective Equipment by Navy In a major step towards rapid mass production of the Medical Personal Protective Equipment (PPE) developed by the Indian Navy, a patent has been successfully filed by the Intellectual Property Facilitation Cell (IPFC) of Ministry of Defence, in association with National Research Development Corporation (NRDC), of Ministry of Science & Technology.

About: The low cost PPE has been developed by a Doctor of Indian Navy, posted at the recently created Innovation Cell at Institute of Naval Medicine (INM), Mumbai. The PPE developed by the Navy is made of a special fabric which affords high level of protection along with high ‘breathability’ as against other PPEs. The team of Innovators from Navy is working in close coordination with IPFC which was set up under Mission Raksha Gyan Shakti (which was launched in 2018). Source : DD News ( Science & Technology ) Read UPSC Current affairs and Daily News Analysis from Best IAS Coaching in Bangalore Vignan IAS Academy FM Nirmala Sitharaman announces second tranche of economic stimulus for farmers, migrant workers, traders under Aatma-Nirbhar Bharat Abhiyan Union Finance Minister announced short-term and long-term measures under Aatmanirbhar Bharat (Self-Reliant India Movement) for supporting the poor, including migrants, farmers, tiny businesses and street vendors.

Measures announced: Free food grains will be supplied to all Migrant labourers for 2 months i.e. May and June, 2020. Technology system to be used enable Migrants to access PDS (Ration) from any Fair Price Shops in India so as to achieve 100% National portability by March, 2021 under One Nation one Ration Card scheme. Central Government will launch a scheme for migrant workers and urban poor to provide ease of living at affordable rent. Government of India will provide Interest subvention of 2% for prompt payees for a period of 12 months to MUDRA Shishu loanees, who have loans below Rs 50,000.The current portfolio of MUDRA Shishu loans is around Rs 1.62 Lakh crore. A special scheme will be launched within a month to facilitate easy access to credit to Street vendors. 50 lakh street vendors will be benefitted under this scheme and credit of Rs. 5,000 crore would flow to them. Rs 70,000 crore boost is given to housing sector and middle income group (MIG) through extension of Credit Linked Subsidy Scheme for MIG under PMAY(Urban) up to March 2021. 6,000 crore of funds under Compensatory Afforestation Management & Planning Authority (CAMPA) will be used for Afforestation and Plantation works, including in urban areas. This will create job opportunities. NABARD will extend additional re-finance support of Rs 30,000 crore for meeting crop loan requirement of Rural Cooperative Banks and RRBs. This refinance will be front-loaded and available on tap. A special drive to be conducted to provide concessional credit to PM-KISAN beneficiaries through Kisan Credit Cards. Fisherman and Animal Husbandry Farmers will also be included. This will inject additional liquidity of Rs 2 lakh crore in the farm sector. Source : LiveMint ( Economy ) Read UPSC Current affairs and Daily News Analysis from Best IAS Coaching in Bangalore Vignan IAS Academy COBAS 6800 Union Health Minister dedicated the COBAS 6800 testing machine to the nation.

About: COBAS 6800 is for performing real time PCR testing COVID-19. COBAS 6800 can also detect other pathogens like Viral Hepatitis B & C, HIV, MTb (both rifampicin and isoniazide resistance), Papilloma, CMV, Chlamydia, Neiserreia etc. COBAS 6800 will provide quality, high-volume testing with a high throughput of test around 1200 samples in 24 hours. It will largely increase the testing capacity with reduction in pendency. This is the first such testing machine that has been procured by the Government for testing of COVID-19 cases and is installed at the National Centre for Disease Control (NCDC), Delhi. As the machine requires a minimum BSL2+ containment level for testing, it cannot be placed at just any facility. Source : PIB ( Health ) Read UPSC Current affairs and Daily News Analysis from Best IAS Coaching in Bangalore Vignan IAS Academy INTERNATIONAL DAY OF FAMILIES 2020 The International Day of Families 2020 is being observed on 15th of May with the theme “Families in Development: Copenhagen & Beijing+25.”

About: Objective of the day: To promote awareness of issues relating to families and to increase knowledge of the social, economic and demographic processes affecting them. Day of observance: 15th of May every year. History: The Day was proclaimed by the UN General Assembly in 1993. Important Info : This year is the 25th anniversary of Copenhagen Declaration and Beijing Platform for Action.At the World Summit for Social Development held at Copenhagen in 1995, Governments reached a new consensus on the need to put people at the centre of development and adopted the Copenhagen Declaration.The Beijing Declaration was a resolution adopted by the UN at the end of the 1995 Fourth World Conference on Women, held in Beijing. The resolution adopted to promulgate a set of principles concerning the equality of men and women. Source : United Nations ( Social Issues ) Read UPSC Current affairs and Daily News Analysis from Best IAS Coaching in Bangalore Vignan IAS Academy ‘Integrated Battle Groups will soon be operational’ Army chief Gen. Manoj Naravane announced that the Army’s new concept of agile Integrated Battle Groups (IBG) as part of the overall force transformation will be operationalised very soon.

About: The IBGs are brigade sized agile self-sufficient combat formations which, can swiftly launch strikes against adversary. They will be able to mobilise within 12-48 hours based on the location. Each IBG would be tailor made based on Threat, Terrain and Task and resources will be allotted based on the three Ts. The Army has extensively “test bedded” the IBGs to fine-tune the concept. Source : The Hindu ( Defence & Security ) Read UPSC Current affairs and Daily News Analysis from Best IAS Coaching in Bangalore Vignan IAS Academy Central Armed Police Forces (CAPF) canteens to sell only indigenous products Union Home Ministry has decided that all the Central Armed Police Forces (CAPF) canteens will now sell only indigenous products. This will be applicable to all CAPF canteens across the country from 1st June 2020. With this decision, 50 lakh family members of about 10 lakh CAPF personnel will use indigenous products.

About: Article 355 of the Constitution of India assigns the Central Government the responsibility of protecting every part of India from external aggression and internal disturbances. Under items 1 to 2A of List I (Union List) of the Seventh Schedule to the Constitution, the deployment of naval, military & air forces; and any other armed forces of Union are vested in the Central Government. To fulfil its constitutional responsibilities, the Central Government has raised seven Central Armed Police Forces (CAPFs). These areFour Border Guarding Forces (BFGs): Assam Rifles (AR), Sashastra Seema Bal (SSB), Indo-Tibetan Border Police (ITBP) and Border Security Force (BSF). Three Non-Border Guarding CAPFs used for internal security: Central Industrial Security Force (CISF), Central Reserve Police Force (CRPF) and National Security Guard (NSG). Source : All India Radio ( Defence & Security ) Read UPSC Current affairs and Daily News Analysis from Best IAS Coaching in Bangalore Vignan IAS Academy NATIONAL DISASTER MANAGEMENT AUTHORITY (NDMA) In the wake of the gas leak at a factory in Visakhapatnam, the National Disaster Management Authority (NDMA) has issued detailed guidelines for restarting industries after the lockdown and the precautions to be taken for the safety of the plants as well as the workers.

About NDMA: Parent body: Ministry of Home Affairs. Primary Objective: To coordinate response to natural or man-made disasters and for capacity-building in disaster resiliency and crisis response. Origin: NDMA was established through the Disaster Management Act enacted in 2005. HQ: Delhi. Organisation setup: The Prime Minister is the ex-officio chairperson of the NDMA, who chairs a 9-member board. The day-to-day management of the agency is overseen by the office of the Vice Chair. Important Info : Functions: It is responsible for framing policies, laying down guidelines and best-practices and coordinating with the State Disaster Management Authorities (SDMAs) to ensure a holistic and distributed approach to disaster management.It collaborates with the Lal Bahadur Shastri National Academy of Administration and Sardar Vallabhbhai Patel National Police Academy to impart training to administration and police officers in planning and incident response.It monitors and develops guidelines for the local Firefighting Services across the country.It collaborates with the Ministry of Health and Family Welfare in developing emergency health and ambulance services. Source : Economic Times ( Disaster Management ) Read UPSC Current affairs and Daily News Analysis from Best IAS Coaching in Bangalore Vignan IAS Academy DIBANG MULTIPURPOSE PROJECT The Forest Advisory Committee, the apex body of the Environment Ministry tasked with deciding whether forest land can be diverted for industrial projects, has once again deferred its decision on Dibang project in Arunachal Pradesh. The project has been delayed for over six years because it required diverting 1,165 hectares of forest in a region of rich biodiversity.

About: Location: The Project is located on river Dibang, in Lower Dibang Valley District of Arunachal Pradesh. Power Generation: The project shall generate 2880MW (12x240MW) power to produce 11223MU of energy in a 90% dependable year. This is the largest ever Hydro Electric Project to be constructed in India. Type of dam: The project envisages construction of a Concrete Gravity Dam. Height: The dam is 278 metres high and will be the highest dam in India once completed. Source : The Hindu ( Geography ) Read UPSC Current affairs and Daily News Analysis from Best IAS Coaching in Bangalore Vignan IAS Academy Read UPSC Current affairs and Daily News Analysis from Top IAS Academy in Bangalore Vignan IAS Academy Daily Current affairs and News Analysis Best IAS Coaching institutes in Bangalore Vignan IAS Academy Contact Vignan IAS Academy Enroll For IAS Foundation Course from Best IFS Academy in Bangalore Read the full article

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loyallogic · 4 years

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Legal Routes to Undertake for Raising Funds for a Business

This article has been written by Kartik H. Shah, pursuing a Diploma in contract drafting with LS. from Lawsikho.com.

During the lifespan of any business, the promoter will have to find ways to fund it, to create liquidity in order to expand, and in many cases, just sustain the business. Therefore, the planning of business funding is of paramount importance to the success of the business. There are several legal ways to raise money for a business, but the avenue to pursue depends upon the stage the business is at. This article gives an overview of the many sources of funding for a business.

Self-funding

Also known as bootstrapping, investing personal savings into the business is the way many business owners decide to begin. Usually, first-time businessmen are unable to get funding without showing proof of some success and momentum in the business.

Another way you can fund your business easily is by asking friends and family to invest. This would be easier than some of the other options below as this would require fewer formalities and lesser costs. A lot of times, interest rate is something that only family and friends would be flexible with.

Your personal investment in your dream business is one of the many things future investors will take into consideration before they buy in, so self-funding should be considered the first step to funding a business.

Business Loan Schemes from the Government

Government Business Loan Schemes have low interest rates and flexible repayment plans, because they are designed for a specific purpose, i.e. promoting micro, small and medium enterprises’ business within the country. Having recognized the importance of small and medium enterprises (SMEs) in India, the Government has decided to boost existing business loan schemes and even start new ones.

These schemes are basically categorised into three categories according to their uses. First, a Working Capital Loan is used to provide businesses with working capital, which is the type of capital that helps businesses run their day to day activities and pay for business expenses like operations, salaries and utility bills.

Second, Corporate Term Loans, which are used for the purpose of expanding a business. The money lent in Corporate Term Loans are of large amounts and are expected to be repaid over longer durations of time, with a negotiable interest rate.

Third, Term Loans, which are expected to be repaid within a specific period of time, may enable the business to buy property, raw materials, or for hiring new staff.

A few of the top business loan schemes from the Government of India are listed below:

Micro-units Development and Refinance Agency (MUDRA): It is an organisation set up by the Government of India to provide microfinance to SMEs, for providing low-cost credit to small companies and start-ups, who are often refused loans from banks. MUDRA loans are provided in the following 3 categories:

i. Shishu Loans, which are up to INR 50,000/-

ii. Kishor Loans, which are up to INR 5,00,000/-

iii. Tarun Loans, which are up to INR 10,00,000/-

Credit Guarantee Fund Scheme for Micro and Small Enterprises (CGMSE) was started in the year 2000, which provides a collateral-free credit system for new and existing businesses which fall under its eligibility criteria. The scheme provides working capital loans without any collateral of up to INR 10,00,000/-. The loans under this scheme are financed by several public and private sector banks covered under the scheme.

National Small Industries Corporation Subsidy (NSIC subsidy) offers two beneficial options for small businesses:

i. Raw material assistance, which covers both indigenous and imported raw materials.

ii. Marketing assistance, which covers funds to enhance the SME’s competitiveness and increase its products’ market value.

The NSIC subsidy is for small and medium businesses who want to improve the quality and/or quantity of manufacturing.

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Bank Loans

Although banks are usually the first place business owners go when they think about funding, banks can often be very reluctant to lend to businesses unless they can prove traction and potential success of the business in the market. The procedure of getting a loan approved by the bank would generally involve sharing the business plan, project report, valuation and other details based on which its officers make a decision. Banks may even require some sort of guarantee or security before they sanction a business loan.

Interest rates for business loans in India range from 11.15% to 22% per annum, and some banks even charge an additional processing fee of around 1% to 2.5%. In the long run, this may prove to be a rather expensive way of funding your business, but we must also keep in mind that most large businesses have rather large debts.

Competition Prizes

Several businesses and start-ups alike raise funds by winning prize money in business pitch competitions and presentations. A drastic hike in the number of competitions has tremendously helped to increase the opportunities for businesses to raise funds. Such competitions either involve building a product or presenting a business plan. In order to improve his chances in a certain such competition, a business owner must make his business stand out. He may pitch a business plan, or present an idea, but he must ensure that it is comprehensive enough to convince people that his business is well-worth investing in. An advantage to raising funds by winning a contest could often be that along with funds, the promoter gets a platform to present his business to potential investors, so he can kill two birds with one stone.

Some of the most popular business competitions and contests are:

– Next Big Idea, which is organised by Intel, DST, NSRCL & IIMB. This contest is aimed at students and entrepreneurs whose businesses are focusing on biotechnology, education, electronics & communication, energy, environment & clean technology, health and biomedical devices and other related fields. For more information on this contest, click here.

– Proto, is a business idea competition aimed at entrepreneurs with all innovative ideas from any industry.

– Champion of Champions: A technology business competition, it welcomes incubates and companies with non-venture capital financing.

Start-up Incubators

Someone running a start-up knows the importance of infrastructure, seed funding, mentoring and training. Incubators help start-ups solve the problems commonly associated with running a start-up business at an early stage. The start-up funding ecosystem is a lot more developed now due to the presence of incubators such as SINE, Seedfarm, Startup Village, etc., who provide start-ups with training, infrastructure, mentoring, networking opportunities (with potential investors and customers), assistance with financial management and marketing assistance.

Oftentimes, it so happens that the entrepreneur wants to perfect his product and build better versions of it without testing it in the open market. Incubators provide entrepreneurs with guidance on the business side of running a start-up, like making sales and in turn, providing revenue to the company. Sometimes incubators are also known to provide access to angel investor networks and venture capital.

Angel Investors

Angel Investors are individuals who have surplus liquidity, which they would like to invest into upcoming businesses. Many of them work in networks in order to collectively assess businesses before investing. They can also offer business advice and mentorship along with injecting capital into the business.

Well known businesses like Unacademy, Cred, Urban Clap and Inshorts have been funded and supported by angel investors.

Usually, angel investors invest lesser amounts than venture capitalists. Some of the largest angel investor networks are Mumbai Angels, Indian Angel Network and Keiretsu Forum, which has chapters across all major cities in India and across the world. It also has a mentoring program for business owners on strategy, finance, marketing, regulatory matters and valuation.

Venture Capital Fund (VCF)

A venture capital fund is a fund managed by professionals. They invest in a portfolio of companies which have huge potential. Usually VCFs invest in a business by buying equity and exit when there is an acquisition or an IPO. They act as mentors, providing the expertise of business and evaluate its sustainability and scalability.

Small businesses who want to expand, and have passed the start-up phase, already generating revenue are the targets for most VCFs. Venture capital funds would be more interested in a fast-growing company like Zomato or PayTM so they could gain exponential returns to invest and grow quickly.

Although venture capital as a funding option does have its advantages, it also has a few disadvantages. Venture capital funds are generally unwilling to remain part of the company for more than three to five years. They look to recover their investment plus returns within this window of time. VCFs may not be too interested in a business if it has a product that is going to take longer to develop and get to market.

They generally look at stable, larger companies who already have a momentum going. A promoter must be flexible with venture capital funds and may have to give up more control of the business as well, so for a promoter who feels he is comfortable enough without mentorship or is not willing to make a compromise in the control he has over his business, venture capital may not be the best option.

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Family Offices

Family offices are private wealth management teams of Ultra High Net-worth (UHNW) Investors and, as the name suggests, their families. In recent times, there has been increasing evidence of family offices investing directly in start-ups and other businesses, rather than just investing in a Venture Capital fund. Family offices usually prefer to invest in the fields of education, information technology, financial technology and health technology, among others.

Bezos Expeditions is the family office of Amazon founder Jeff Bezos. It makes investments in seed, early and late stage businesses across a wide range of networks.

An Indian example would be the family office of Uday Kotak, the Managing Director of Kotak Mahindra Bank and the eighth richest man in the country, who announced in 2018 that he was setting up a family office to invest his $10.3 billion fortune.

Crowdfunding

One of the newer, more popular ways of funding a business, crowdfunding is like taking a loan, investment, pre-order or contribution from more than one individual simultaneously.

How does it work?

After putting up detailed descriptions of his business onto the crowdfunding platform, the entrepreneur or promoter will provide information on the amount of funding needed and for what reasons, the objective of the business and the plans for making a profit. The consumers then read it and contribute if the idea appeals to them. Anyone can contribute to a business they believe in on a crowdfunding platform by pledging to make a purchase once the product is launched or by donating a certain sum of money.

One of the great advantages of crowdfunding is that most of the time, marketing is taken care of along with finance, and that interest in the product is maintained in the market until the product is launched. It is a great way to find out if the product has an actual and sustainable demand in the market before larger chunks of money are pumped into its development. Although it might attract venture capitalists’ attention further down the road if the campaign gains success, crowdfunding puts the funding into the hands of common people, rather than hand over any amount of control to venture capitalists.

The crowdfunding space can get competitive to say the least, so a promoter must make sure his business idea is rock solid and can attract the attention of the common man with business details and some presentations.

A few popular international crowdfunding websites are Kickstarter, GoFundMe and RocketHub. In India, the popular crowdfunding platforms are Indiegogo, Ketto and Catapooolt.

Private Equity Funds

Private equity fund is basically a general term defining a pool of money from several investors to gather several millions, and sometimes billions of dollars, which are used to purchase equity in companies.

While technically venture capital is private equity too, it can be differentiated in the following way:

Venture capital usually invests in unproven, younger companies, whereas private equity funds are more attracted toward experienced and market-proven businesses. Private equity may be the way to go if the original investors are looking for an opportunity to get some returns on their investment, or if the business requires some infusion of liquidity. Private equity funds will provide the business with new ideas and new people who might approach it from a different angle.

On the other hand, younger companies don’t always fit in very well with private equity investment strategies. A business owner may also feel that private equity funds are a bit ruthless when it comes to workforce, role of founding promoters and sentimentality, as they would have a purely profit-oriented approach. Their primary goal would be to enable the company to be valued a lot higher than before so that they can turn a profit.

A brand new type of private equity has been seen in recent times, where investors contribute a smaller sum towards a would-be entrepreneur who then looks for the best business to acquire and run. Once he has finalised on this, the investors write the big cheques that are required to acquire the business. This type of private equity is known as a search fund and could work as a boon for a business which not only needs some cash inflow but also a new executive at the top to take the business in a successful direction.

Buyout

A buyout can be defined as the acquisition of the controlling interest in a company. It often takes place when the purchaser believes that the company or business is undervalued and has the potential to be bigger success.

Usually, the purchaser takes on the debt of the company or borrows money in order to purchase it. He then uses the assets and cashflow of the subject company to repay the loan. This is known as a leveraged buyout. Some well-known examples of successful leveraged buyouts in India are:

Tetley, a UK based company was bought out by Tata Tea for a sum of $271 million.

American Axle, an American motor company was bought out by Tata Motors for $2 billion.

Hansen Transmissions, from the Netherlands was bought out by Suzlon Energy for $465 million.

It should be noted that a leveraged buyout of Indian companies must comply with legal and regulatory framework in India. Due to the strict restriction of RBI on lending and the stringent laws imposed by Government of India as well as Ministry of Finance regulations, an LBO is not considered a feasible option for companies. It is important to study market conditions, industry and company-specific characteristics before implementing a leveraged buyout.

IPO (Initial Public Offering)

When a company goes public with an IPO, it receives money from investors and in return gives them a share of the company. Issuing public shares allows a private company to raise money from the public. The Dutch are given credit for conducting the first modern IPO, when they offered shares of the Dutch East India Company to the general public. Ever since, IPOs have been used as a means for a company to raise capital from the public in return for a share of the company, thus receiving the inflow of cash.

When a company reaches the phase in its growth where it is believed to be strong enough to handle the meticulousness of SEBI regulations along with responsibilities to public shareholders, it starts announcing its interest to go public. If the company meets the eligibility criteria of SEBI, they begin the IPO procedure.

In conclusion, it should be noted that funding a business is one of the primary responsibilities of the promoter. If the business is well funded, it will most probably grow faster. It will satisfy creditors, make customers happy and keep employees motivated. On the other hand, an under-satisfactorily funded company will constantly face difficulty in finances and in turn, operations. Therefore, it is imperative for a promoter to consider which type of funding he should go for based on the stage his business is in.

Students of Lawsikho courses regularly produce writing assignments and work on practical exercises as a part of their coursework and develop themselves in real-life practical skill.

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loanandmore · 5 years

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All you need to know about Mudra loan

Starting a small business or a start-up requires a lot of patience, hard work and an owner of an SME (small-medium enterprise) or an MSME (micro, small and medium enterprises) nationwide will face a lot of difficulties. But, running these enterprises is not easy and requires extreme amounts of help and finances. Any aspect of an enterprise can go bust at any specific time without warnings, and to tackle these problems and making the business run smoothly requires financial support at all times. For such enterprises, the Government of India has launched the Micro-units development and refinance Agency (MUDRA) loan in an attempt to promote the SMEs and MSMEs of the country.

The Mudra loan scheme under the Pradhan Mantri mudra yojana is an initiative provided by the Government of India which offers loan schemes under three categories, namely Shishu, Kishor and Tarun. If the loan amount provided under the programme begins from Rs. 50,000 and exceeds maximum up to Rs. 10 lakh for a start-up enterprise, small business units and MSMEs. The credit products offered in the name of mudra loans, will help different SMEs and MSMEs expand their businesses and with their growth, and help them manage operational needs through various finance schemes.

While applying for a Pradhan Mantri Mudra Loan, the applicant does not require any collateral security or third-party guarantee. The application criteria for the loan will be at different financial institutions. An applicant should research the different interest rates offered by financial institutions and banks to clarify any doubt on the application form before applying. Generally, not all banks and financial institutions provide Mudra loans to their customers. You must meet the eligibility criteria set by the government which the applicant will have to reach for the Pradhan Mantri Mudra Yojana.

To maintain a balance in the employment creation, a Mudra loan scheme is directed to vendors, shopkeepers, provide them with a working capital loan through Mudra cards, provide equipment financing for micro-units along with different vehicle loans as well.

Some of the reasons why a Mudra loan is an optimal solution for SMEs and MSMEs are listed below:

There is no minimum loan amount under the Mudra scheme

No type of security or collateral is supposed to be provided by the applicant for choosing this scheme.

Every non-farm enterprises, which include small or micro firms that are engaged in the generation of income, can easily opt for this loan.

The funds gathered through a Mudra loan do not come with any attachments on how the money should be spent. An SME or an MSME owner can spend the funds any way they see fit and take care of any issue through these funds.

If an individual wish to apply for a Mudra loan, the application form is available at mudra.org, so they can download the form and fill in the required details. Different banks and financial institutions have different procedures.

#Mudra Loan #Pradhan Mantri Mudra Loan #Mudra Loan scheme

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ronika027-blog · 5 years

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richa27blog-blog · 5 years

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yourbusinessconsulting · 5 years

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What Really Drives SMEs to Grow?

SMEs are Small and Medium Enterprises defined by Government by their revenue. In India the Government has defined businesses with revenue upto INR 50 million as a micro enterprise, those with sales between INR 50 million and INR 75 million will be deemed as small and those with revenue between INR 750 million and INR 250 million will be classified as medium-sized enterprises. It is well accepted fact that SMEs play a key role in driving overall growth of economy. SMEs are drivers of economic growth and job creation in developing countries. They face challenges in terms of capital expenditure, labor and other different issues. Here in this article, we have tried to identify the key factors that help SMEs to grow? Management Practices: In any business, growth is not linear. Therefore management practices play a crucial role in ensuring the growth of the business. The business is successful only when there is a high degree of operational and management efficiency that leads to higher productivity. Therefore the management strategy should fit to the core business of the company and be ready to adapt change quickly. The key areas that have been identified for improving management practices are internal controls, labor benefits, strategic planning that includes fund raising and innovation. If these areas are managed well then the company can scale up faster that the market. They should have feasibility studies conducted for the business and dynamically update the data as required. Talent Management: Employees are of great importance in ensuring growth of a business. Businesses become successful when they align staff performance to wider business targets. This helps in augmenting the process of achieving short term and long term goals. In that context, it is worthy to mention that, not only productivity of staffs but also their behavior must be aligned with overall organizational goal. Teams and employees are able to achieve monthly goals set when they are motivated, compensated adequately and there is a desire to achieve the broader organizational goals. Some of the key factors that we have identified for talent management are: It is understandable that for SMEs there is not much space to promote employees. Therefore they can be delegated greater responsibility so that it sums up to more of a horizontal promotion for them. Create physical or online groups in the office so that they can get involved in some activity on a Friday. There can be several such activities but the broader point that needs to be reflected is how employees can be kept motivated at all times. Adoption of Technology: If we are not technologically up to date we will suffer as we’re going through a digital revolution. The companies that failed to make themselves technology intensive have disappeared from the market. Technology can be costly in initial stages of the business. But, it gives considerable competitive advantage by reducing cost of productivity and enhancing quality of productivity. It is difficult for SMEs to install robotics in its operations. Dedicated industrial robots can limit small and mid-sized manufacturers who often have small production batches and require fast change-over. But, these issues are solved by innovative Universal Robot. It is easy to install and reprogram, less spacious and redeployable in multiple locations. Thus, using this technology SMEs which are operating in the manufacturing industry can achieve economies of scale which contributes positively in achieving growth in the business. Based upon my experience of working with the SME sector, I have seen that some SMEs are moving towards implementing better technology. For example a SME Agri Implement Manufacturer can use powder coated painting for the products which is parallel to what large manufacturers do. R&D and Innovation: It is known that R&D and innovation are key reasons for growth of a business. Without it a business, product and service become cliché and ineffective. TR&D and innovation has made Apple Inc. and Google distinct from other companies. But, all the SMEs do not have the capacity to invest in R&D. However, if it fails to innovate, it fails to achieve growth. However, SMEs are, on average, less innovative than large companies. For example, across OECD countries, the median value in the national SME share of business R&D is 35%. That is why it takes time for many SMEs to achieve high growth in initial stages of the business. India spends around 0.8% of its GDP in R&D. Government, business and universities are the key sectors where it spends on R&D. In 2018, it spent $29,066.8 million in government sector, $17,044.0 million in business sector and $1,952.3 million in universities. However, there are no defined figures of how much is being spent on SME R&D. Thus, investing in R&D and innovation in SMEs is still not considered high priority. Networks and External Engagement: The key notion of business is selling products and services and earning revenue. Therefore, the businesses which have better network and external engagement are able to generate revenue easily. It allows these SMEs to develop better engagement with existing clients to enhance the expansion of the present client base easily which results in a consistent growth from early stages of business. Most of the SMEs focus on listing their business in various classified sites, participate in forums, post blogs, conduct events and forge partnership for enhanced networking and better external engagement to ensure growth of business. In India SMEs participate in various events conducted by NASSCOM, ASSOCHAM and other to expand their clients base. Online promotions that include Social Media and Google advertisements are also becoming a key channel to promote SME business. Access to Funding: High-growth SMEs are not just more likely to seek external funding but also a broader range of funding options to suit their scale-up needs. The companies build an external funding network. It helps to diversify funding sources and reduces the risk of investment. However, many low-growth SMEs misses out on this opportunity due to various reasons such as not-so-attractive business idea, restricted scope of generating revenue and inability to refund on time. That is why formal banking system refrains from investing in small and medium sized businesses. An analysis conducted by IFC revealed that, there is an approximate amount of $240 billion credit gap in India. In India, micro, small and medium enterprises are responsible for around 30% of economic output and it provides employment to around 111 million people. However, the growth in Fintech industry in India shows a new hope for SMEs to access required funds for its businesses. According to PwC report, Indian and global venture capital investors are more inclined to invest in this segment. Governmental policies: India is expected to be a $5 trillion economy by 2025. The country was recently termed as truly emerging market in Asia at the moment. In 2019, the SMEs have been identified with 60% increased in offering app-based services. Thus, they are increasingly becoming technology intensive. However, this was impossible to happen ten years back. The budget crunch and lack of business scope were played as key reasons. Various positive government initiatives played key roles to enhance confidence among entrepreneurs to invest in their startup. Key government policies that has helped SMEs to startup are MSME business loans in 59 minutes, MUDRA (Micro-Units Development and Refinance Agency), CGMSE (Credit Guarantee for Micro and Small Enterprises) loan, NSIC (National Small Industries Corporation) loan and CLCSS (Credit Link Capital Subsidy Scheme). These funding schemes and loans have enabled SMEs to overcome the problems faced by credit gaps in the industry. In it worth to mention that MUDRA scheme helped many micro enterprises to avail funding help of INR 50,000 while it enables to access loan upto INR 10 lakhs. Therefore, these diverse financial facilities catering to unique need of micro, small and medium sized enterprises helped the SME segment to become as the futile seed of manifold growth of economy within next few years. In a concluding note it is worth mentioning that SMEs are the backbone of Indian economy. The report published by Goldman Sachs says small businesses are the engines of job creation in America. It accounts for 29.6 million businesses in America. It comprises 99% of US employment firms. It employs around 58 million people in America. According the statistics provided by Federation of Small Business of UK, Small businesses accounted for 99.3% of all private sector businesses at the start of 2018 and 99.9% were small or medium-sized enterprises (SMEs). Therefore, due to the positive impact of various initiatives and existent external and internal drives, India is steadfastly moving towards a right direction by ensuring scope of growth across SMEs.

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