We need loans for growing our business. We go in the market and get loans at 18-20%. I remember meeting a businessman. He had taken loan against credit card swipes. He used to pay everyday to the lender. Mathematically, he was paying MORE THAN 50% interest rate per annum.
What’s the Math!
Lenders take you for a ride because you always HATED Maths as a subject when you were young. For Rs.100000, you have to pay Rs.3690 as EMI every month for 3 years. The interest rate is 19.5%. It can be portrayed to you as 11% also. The actual rate of interest goes up to more than 25% if you include Processing Fee & the insurance they hard-sell you. Ok, I know you hate Maths. So forget the calculations.
Just remember that you end up paying more than 25% as rate of interest when you take a business loan. You have to pay every month even if you don’t use the money.
Is there something affordable?
So what, if I tell you that you can get an unsecured business loan for 12-14% which works like an Overdraft & you have to pay interest only when you use it. Yes, such a thing exists.
If you are engaged in Manufacturing or Services, it exists for you. The scheme is called CGTMSE – Credit Guarantee fund Trust for Micro & Small Enterprises. Before you lose heart, a Small Enterprise is one which has invested in Plant & Machinery upto Rs.5crores. This is for the manufacturing entities. For someone engaged in services, investment in equipment upto Rs.2 crore qualifies for this scheme.
More about CGTMSE
The limit can be taken from any scheduled Bank. The limits are available till Rs.1crore. YES, Rs.1crore. The Bank assesses limit requirement as it does normally & then takes a call whether they can be given to you or not. They come without any collateral which means you don’t have to give any security to the Bank for getting this loan.
CGTMSE limits are partially guaranteed by SIDBI. They can be taken in form of Overdraft, Term Loan, Bank Guarantee, L/C limits.
You can ASK experts on BankerBhai more about CGTMSE and Apply now for CGTMSE Loan.
