18 Apr Poor CGTMSE Scheme!!
CGTMSE Scheme is great! I have seen eligible entrepreneurs benefited. I was party to four such loans in the past one year. But Entrepreneurs seem to assume it is their prerogative. I receive quite a few calls these days on CGTMSE and most of the case are not fit enough to approach the banks under CGTMSE Scheme. Please read this blog post. This throws lot of light on CGTMSE Scheme.
I had this interaction on mail from an entrepreneur. It is sad. If you don’t have money and if you don’t have lot of assets, only way to grow big is doing straight business. Above board businesses get lot of help even in this corrupt world.
Entrepreneurs need to understand one thing clearly. You can expect finance based on your deeds. Please do not expect finance based on your dreams. World doesn’t work that way. Read on. This is funny and sad at the same time
The Original Message Received
I am ABC Proprietor of XYZ Computers I need the loan for my project the project is that I want to expand my Business in all over India for tht I need the 150 Crore INR but I cannot have the ITR, Balance Sheet or Security I need the loan against Hypothecation means which materials or assets I will buy it will be in the securityis any option is there to get the loan if yes then kindly tell me how can I apply for that
And if not then kindly tell me the whole process of CGTMSE Sheme that how canI apply for that and what documents I need to submit in the bank and which bank will provide me the Loan under CGTMSE Scheme
Thanks for the mail. Rs.150 Crores is not in my league. You need a combination of QIP (Qualified Institutional Placement) and Private Equity. I restrict myself to about Rs.30 Crores Max.
All these type of funding (CGTMSE included) require strong Governance. Without ITR Balance Sheet and Security there is no way you can raise any loan. If you want to grow, the only way is to do Business, make profits and pay taxes. I suggest you start doing it today.
Sorry I am not of better help.
He has a doubt
But CGTMSE is no collatrel loan, then why I need to provide the security under CGTMSE
In my bid to educate an entrepreneur I write
Only security is not needed. Good Governance shown by increasing turnover, profit and taxes have to be established by Balance Sheet and ITR. If you don’t have them you will not be considered for CGTMSE Scheme.
He is persistent.
Ok under CGTMSE how much I can apply for what is the limit can you tell me? And is any sheme like CGTMSE is avalable for 150 Crore INR Without collateral Security?
Waiting for your reply
I believe it is impolite not to reply to a query from an SME Entrepreneur. So I write…
Maximum limit is Rs. one crore under CGTMSE scheme. All schemes for Rs.150 Crores is without collateral only!!! Business should have proven capacity to take that money.
I was initially flabbergasted when I received this reply.
Where can I apply for that? my monthly transection is currently 5-6 lakhs I have the balance sheet but not the audited balance sheet so is any scheme is avalable for me.
And felt sad too. So I reply
No. Without PAN, ITR and Audited Balance Sheet it is not possible to get any loan from bank or financial institutions. Please take my advise. Forget loans for now. Get the Balance sheet Audited pay taxes show some profit and then approach the bank you know for a small loan without collateral. At the moment you cannot expect any loan from a bank or financial institution.
All my pains to educate went down the drain. I gave up when I received this
Ok sir if I need 150-200 Crore INR then how much profit I need to show and how much income I need to show and how much yearly transection I need to show the bank because I have not file my ITR or sales tax return so can you guide me properly