In Budget 2019, there was an announcement about a facility for MSMEs to get 2% interest subvention from Government for incremental loans of Rs 1 crores under the MSME Credit Scheme. With entrepreneurship being the order of the day and many people doing something of their own, getting your paperwork is a must if you are to claim such benefits. It all boils down to whether you have proper registration. If you are an MSME, but haven’t registered yourself — now is the time to do it. Registered MSMEs can get better credit terms on business loans etc. and a whole host of other benefits. Here we tell you all that needs to be known about the MSME registration process. Get started today.
Are you an MSME?
MSME is an abbreviation for Micro, Small and Medium Enterprises. Entities in either the manufacturing line or the service line can be an MSME. Fortunately, registrations for both these areas can be obtained through the MSME Act. Once you get the registration, you can reap benefits in terms of taxation, setting up the business, credit facilities, business loan.
To be a ‘micro’ enterprise in manufacturing, your investment in plant and machinery/equipment should be less than Rs 25 lakh. To be a micro-enterprise in services, that number should be less than Rs 10 lakh. A ‘small’ enterprise in manufacturing the investment needs to be less than Rs 5 crore while in services a ‘small’ enterprise needs to have less than Rs 2 crore investment on machinery. For ‘medium’ enterprises, the numbers are Rs 10 crore and Rs 5 crore for manufacturing and service entities respectively.
To do the registration the small and medium scale industry owner has to fill a single form. You can do it on paper i.e. offline mode, or opt for an online mode in the same way you do it for a business loan application.
Please note the documents required for the MSME registration include personal Aadhaar number, industry name, address, bank account details and some commonly available information such as number of employees etc. Good news is there are no registration fees required for this process
Once the details are filled, you can submit the form to the department or upload online to get the MSME registration number. It is a much easier process if you choose the online MSME registration process.
Benefits of MSME registration
Due to the MSME registration, the loans become cheaper. Ideally, the interest rates on business loans should be lower than interest on regular loans. If you don’t get cheaper interest rates, try to explore business loan options with trusted lenders like Tata Capital who offer up to Rs 50 lakh business loans at attractive rates and no collateral is required. You can check the repayment options by using a business loan EMI calculator.
Other MSME registration benefits include various tax rebates offered to MSMEs. For instance, a registered MSME can get credit for minimum alternate tax to be carried forward for up to 15 years instead of 10 years.
Also, there are many government tenders which are only open to the MSMEs. If you want to fulfill a tender order but lack funds, use the quick & fast business loan option. This can get a registered MSME easy access to credit. Business loans can deliver the required funds to registered MSMEs within days and help you repay later in flexible EMIs. To customize the repayment schedule and apply for affordable interest rates, talk to Tata Capital. Calculate your loan repayment requirements with business loan EMI calculator.
Do note that the India government is trying to support MSMEs, and so business registered under MSME may be given higher preference for government permit and certification. Hence, it is important that you get registered as an MSME if you are an eligible entity.