Riding the Wave: the Alternati...

Blog Detail

Riding the Wave: the Alternative Lending Era

Riding the Wave: the Alternative Lending Era

In recent times, the Indian economy has experienced growth and innovation mainly due to the emergence of various MSME schemes us small and medium enterprises (MSME’s) building their businesses at the local level with the aspiration to grow higher.  


MSMEs help uplift the country's rural and less developed areas, reducing regional imbalances and inequality. They play a significant role in the country's socio-economic development, but at the same time MSME financing in India is still an important issue. Their limited access to finance leads the economy to suffer a series of negative consequences- Economic and social opportunities are restricted, and enterprise creation and growth are restrained.


Most MSMEs do not get access to financial resources due to high interest rates, inadequate collateral, and process complications. Also, they need an established track record, which makes securing loans from banks and other financial institutions more difficult. This lack of credit history also makes MSMEs a risky venture for lenders, which decline their finance options. Therefore, there is a need to explore alternate sources of finance for the companies.  


As we dive deeper into this wave of alternative funding, various MSME schemes offered by the government come into the picture.


Unlocking Growth - MSME Schemes 


The Indian government has recognized the significance of MSMEs and has introduced a number of MSME subsidy schemes to empower entrepreneurs and help them financially. The companies can secure an investment subsidy of 75% of the state tax due and deposited for seven years from the commencement of commercial production under the MSME schemes of Rajasthan. Enterprises can also benefit from interest subsidy– 6% for five years, lowering loan interest rates. Not just Rajasthan but Uttar Pradesh and Haryana government are also helping the emerging enterprises through different MSME schemes for new entrepreneurs and existing ones.


The central government of India focuses on removing financial constraints through various MSME schemes for new entrepreneurs who are looking for setting up their business and existing entrepreneurs who are looking for expansion.  


Credit Guarantee Scheme for Micro and Small Enterprises (CGTMSE) aims to motivate first-generation entrepreneurs towards self-employment by providing credit guarantee funding for third-party guarantee-free / collateral-free loans. The Union Budget 2023-24 includes INR 2 Lakh Cr additional credit for Micro and Small Enterprises to be facilitated under the Credit Guarantee Trust for Micro and Small Enterprises (CGTMSE).


Breaking Barriers – MSME Schemes for New Entrepreneurs 


The Indian government's MSME schemes provide various subsidies in diverse sectors – agriculture, pharmaceuticals, auto components, electronics manufacturing, textiles, food processing, etc. Companies can upgrade their businesses to the next level through government assistance in upgrading technology, purchasing testing equipment, meeting quality standards and environmental compliance. Numerous MSME schemes for new entrepreneurs are being launched to create a conducive environment for the companies, like the Entrepreneurship and Skill Development Programme Scheme (ESDP), which aims to promote new enterprises and facilitate capacity building of the existing MSMEs. Apart from this, Pradhan Mantri Mudra Yojana assists in the form of collateral-free loans.


MSME Subsidy Consultants – Navigating the landscape 


Understanding and availing the benefit of these MSME schemes can be daunting for most entrepreneurs as they are already juggling with other priorities in their heads. Identifying the most profitable MSME scheme for new entrepreneurs is an important yet confusing task. This is where MSME subsidy consultants play a significant role by being supportive in applying for and availing subsidy benefits. Let's have a look at the crucial points where taking the support of subsidy consultants is indisputable.   


Scheme Identification: MSME Subsidy consultants analyze the unique needs of a business and identify the most suitable MSME scheme for new entrepreneurs and existing ones that aligns with their organization's objective.


Application Assistance: Subsidy applications are frequently declined due to inaccuracies and misfiling under the wrong scheme. MSME subsidy consultants play a crucial role in ensuring the accuracy of the application.


Compliance with the scheme: MSME subsidy consultants also ensure that the MSMEs fulfil the eligibility criteria required under the scheme and have all the clearances and documents needed. They also ensure that businesses remain compliant with the scheme, decreasing any complications and risks in the subsidy lifecycle.


In the era of alternative funding, taking advantage of government MSME schemes is an attractive solution for financing capital and operational expenditure. Before availing the subsidy, hiring the MSME subsidy consultants is a strategic move in the complicated web of various MSME schemes for new entrepreneurs and surviving entrepreneurs. Embracing these initiatives will save the massive upfront cost and lead the business towards innovation and sustainability.


SubsidyPro – One Stop Solution 


With in-depth knowledge of subsidies and expertise in the whole procedure from registration to disbursement, SubsidyPro provides a one-stop solution for entrepreneurs. It acts as your financial advisor by helping you avail subsidies that reduce the cost of plant and machinery, land, equipment, or the cost incurred in incorporating quality standards and meeting green compliances.


SubsidyPro ensures that the application is not rejected based on misfiling, inaccurate information, or missing documents. It helps you plan your business's expansion, or decide the most appropriate location for getting the benefit of subsidies. As the specialist MSME subsidy consultant, SubsidyPro navigates you through various MSME schemes offered by the government, makes you aware of eligibility criteria, and advises you on the best subsidy scheme suitable for your business, maximizing the benefit and improving the growth potential. With a proven success rate, SubsidyPro specializes in unleashing the financial support provided by the government.