How to get CGTMSE Loans for business

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CGTMSE (Collateral Free Loans)

This is one of the best Unsecured Loan scheme offered by govt. to provide Collateral Free Loans to Small and Medium Enterprises (SME) for their business expansion and working capital needs.

Under this scheme, borrower is granted upto Rs.2 Crore of Collateral free unsecured business loans in the form of Term Loans (for purchase of asset) or Working Capital based on Turnover and financials.


  • Any Enterprise (New or existing), Proprietorship, Partnership, Company
  • Must have obtained MSME Registration
  • No past bad CIBIL/Default history
  • Project Feasibility, experience of promoters, line of activity and visibility of Revenues will be the key decision criteria for lending and decided by Lending Bank/FI.

Products: (Unsecured Business Loan)

  • Term Loans for Purchase of Machinery ( Upto 75% of Cost of Machinery)
  • Working Capital in the form of CC/OD limits against Stocks and Book Debts of business

Operating and Technical parameters:

  • Permanent Residence proof is must from the promoters
  • If Place of business is Rented, then Rent agreement should cover the period of the loan
  • Fixed CGTMSE Guarantee Fees – in the range of 0.75 to 1.5% per annum for Guarantee Cover (This is basically kind of insurance premium paid by borrower to Govt.(MSME) for guaranteeing their loans in the event of default)
  • Funding for Negative Sectors under the guideline is prohibited (Jewellery, Real Estate, Film etc.)
  • Other financial ratio parameters to be met as per policy guidelines

How to avail loans under CGTMSE:

  • Approach Local Bank preferably your home branch where banking is maintained
  • File an application for CGTMSE Loan with supporting documentations
  • Documents required includes (covers important documents)
    • KYC of Promoters/Proprietor/Director/Partners
    • Project Report and Brief Profile of Business and Owners
    • Financial Projections for next 5 years
    • Quotations for Machinery/Assets to be purchased
    • Declaration on the letterhead towards purpose and end use of the funds lent by the bank
    • Place of Business and Residence proof with Rental Agreements/ Electricity bills/ Property tax receipts/ Rent receipts
    • 1 year Bank Statements
    • 3 Years Income Tax Returns (for existing enterprises)
    • Copy of Purchase Orders on hands

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