Q&A library

Under the ECLG scheme, we have availed 20% of loan amount as on 20/02/2020. Immediately the NBFC started encashment of ECS stating that we cannot avail 20% ECLG scheme and moratorium too. Request your input on the same.
Questioned by Duhita Bhole, Maharashtra
The ECLG is a loan for which 100% guarantee would be provided by National Credit Guarantee Trustee Company (NCGTC) to Member Lending Institutions (MLIs), and which will be extended in the form of additional working capital term loan facility in case of Scheduled Commercial Banks (SCBs) and Financial Institutions (FIs), and additional term loan facility in case of Non-Banking Financial Companies (NBFCs), to eligible MSMEs/ Business Enterprises and interested Pradhan Mantri Mudra Yojana (PMMY) borrowers. Credit under GECL would be up to 20% of the borrower’s total outstanding credit up to Rs. 25 crore, excluding off-balance sheet and non-fund based exposures , as on 29th February, 2020, additional credit shall be up to Rs. 5 crore. It is not necessary that the existing loans of the borrowers should be covered under the ECLGS of NCGTC. There will be a moratorium of one year on the principal repayment, but interest payment will continue during this period (be payable during the moratorium period). The principal repayment will then be converted into equated instalments spread across the remaining period, which is 36 months. A separate loan account will be opened, which is distinct from your current loan accounts. In that sense, the scheme is not a top-up on your existing loan. https://www.ncgtc.in/

My GST blocked due to returns not submitted due to financial problem. Ontime collections not received. Please give the solution to restart the business.
Questioned by Komula Radha, Telangana
With pandemic effect still continuing and impacting businesses, the government has announced the extension of dates from June 30th to September 30th for the submission of GST annual returns for FY 18 - 19. This is crucial since if a taxpayer has not filed GSTR for two or more consecutive months, then he/she cannot generate e-way bills to do dispatches and receive goods, resulting in a standstill. Only when a taxpayer files GSTR, the e-way bills will get unblocked on the next day. Moreover GST credits can be used to create an additional revenue source for banks while also generating more liquidity for the government and builds the much-needed confidence within the business community. Hence the GST filing remains utmost important. The loans for the restart of business for various small scale industry are available from NBFC’s and MFI’s with collateral given, Muthoot Fincorp Ltd. has launched a special Gold Loan Scheme for businesses known as "Ashwas Dinam Gold Loan" The features are:• Maximum loan value against gold• Steady interest rate for 180 days• 24x7 online repayment options• Reducing interest on daily payments.Other Small Business loans for SME also available to meet the working capital needs or to improve the scope of the business. However a good credit score is equally important to avail these loans.https://blog.saginfotech.com/gst-due-dates-e-filing-of-tax-return

Our business is down due to the Covid-19 scenario but we have existing business loans and vendor commitments to be settled. We tried to get financial assistance but couldn’t get any approval. Please suggest possible solution to overcome this situation.
Questioned by Poornachandra Tejasvi, Karnataka
Consult ways to improve your business using the current technologies or improvised methods so you can overcome the current crisis. There can be various reasons why your loan is getting rejected. The financial stability of the business is one among the many elements the banks consider before they sanction the loan. If your business has more expenses than income, it can lead for a rejection. Lenders generally check the personal credit score of the business owners while evaluating the application so kindly ensure if your credit score is high or low. Also, there can be other different factors like purpose of the loan, collateral security, repayment capability etc. Consider other initiatives like Angel Investors (Reach out to angel networks such as Indian Angel Network, Mumbai Angels, Lead Angels, Chennai Angels, etc. or relevant industrialists for this), Crowd funding (via online crowd funding platforms), bootstrapping etc. where you can get financial assistance

Our Company exports Inner garments and we have good orders coming in due to the recent issues with our neighbouring country. We are running short of sewing operators in our organisation. Also, to meet the new requirements we require financial capital assistance as well.
Questioned by Mohammed Aslam, Kerala
You can contact National Skill Development Corporation (NSDC) or Pradhan Mantri Kaushal Vikas Yojana (PMKVY) training partners for suitable resources. Both provide various skill certification scheme to a large number of Indian youth to take up industry-relevant skill training that will help them in securing a better livelihood. This includes Apparel/Home Furnishing sector/industry curriculum. Individuals with prior learning experience or skills are assessed and certified under faculty training standards, quality assurance, technology platforms, and student placement mechanisms. Also you may go for referrals within your friends and family circle.You can also consider offerings by NBFCs - "Ashwas Dinam Gold Loan" and “Restart India Pradhan Gold Loan” provided by Muthoot Fincorp Ltd (MFL) for immediate capital funds.http://bit.ly/MuthootFincorpADGL & http://bit.ly/MuthootFincorpRIPLAlso, MUDRA loan is available through Banks/NBFCs/MFIs. It is advisable to start with the Bank where you already have an account/loan to get the approval easily. Loans are categorised into Shishu, Kishor and Tarun. Loans upto 50,000/- comes under the ‘Shishu’ category. Generally, loans up to Rs.10 lakh issued by banks under Micro Small Enterprises are given without collaterals.

I own a manufacturing firm but not getting enough funds to run the business. Please suggest any non-collateral loans that can be availed.
Questioned by Bijay Choudhary, West Bengal
Finance Minister, Nirmala Sitharaman had recently announced on 13 May, 2020 that collateral-free loans will be given to businesses including MSMEs to help them sustain in the economy which is greatly affected by COVID-19. With this loan, the MSMEs which have been struggling to survive and need additional funds to purchase raw material and restart their businesses can avail of this loan as part of the relief package offered by the government of the country. Mudra Yojana started under the Jan Dhan Yojana, provides collateral free loans. Three types of loans are disbursed under the MUDRA yojana and the borrowers are not required to provide any collateral or security for availing this loan. The three free collateral loans available under Mudra loans are Shishu, Kishore and Tarun. Various Public and private sector banks, regional rural banks, MFIs, NBFCs and co-operative banks function as MLIs (member lending institutions) to the borrowers under the Pradhan Mantri MUDRA Yojana (PMMY). The other options are Crowd Funding, Angel investment, bootstrapping etc.

How can I get Instant loan to start my second venture of manufacturing and trading of sanitization and healthcare products. I need Rs. 15 lakhs. I have applied for Mudra loan for 10 Lakhs, what else can I do?
Questioned by Sunilkumar ramchandr Azad, Gujarat
There are other ways to source funds with collateral, which support facilities/systems that are being provided to customers coming under the MSME categories - by Government and Financial Institutions alike. Emergency Credit Line Guarantee Scheme (ECLGS) or Guaranteed Emergency Credit Line Scheme (GECL) is a part of COVID-19. Loan by the Government of India for MSME units in the current scenario of COVID-19.

I am an E-Commerce specialist with 5 years experience in the field, I have been working as a freelancer in Amazon.in E-commerce platform. Now, desirous to start my own online business on Amazon. Need some financial assistance. How can Restart India advise and help me. Thank You
Questioned by John Martin, Haryana
As you are willing to start online business of your own, concrete business plan is necessary. It is good to be specific regarding the cost to be incurred such as premises, hardware, software, staff, cash flow, future projections etc. As you have 5 years’ experience in Amazon as an E-Commerce specialist you might not have to face problems regarding funding as Amazon is a big brand and lenders will have confidence in providing financial assistance. Once your business is established and profits start coming in, new challenges may arise such as material requirement, revenue expenditure, expenditure on acquiring additional assets, investing profits for future business growth etc. For all this you will require a mix of various types of finances to cater to your business needs. There are online companies like Lendingkart <https://www.lendingkart.com/business-loans/> and others who can help arrange funds based on the business requirements.

Is there any financial support for Maruti Suzuki authorised service during the current scenario? I am facing a big financial loss, please help me with some suggestions.
As far as Maruti Suzuki authorised service centres / dealers are concerned – Maruti Suzuki had offered an 800 Cr package initially, which included one-month interest waiver on inventory for dealers. RBI had provided relief in the form of moratorium (optional) as well. But, given that dealers are not yet identified as an MSME by Government, they were not qualified for the special package announced by the Union Government. Now as the sales has started moving up the dealers can draw from their existing inventory limits / trade advance given by banks and NBFCs.

I have to start my business of agarbatti manufacturing and for this I need to purchase machines and raw materials. Please suggest financing options
Questioned by Ravi Kant vinodiya, Madhya Pradesh
Agarbatti Industry is one of the most vivacious cottage industries that employs around 20 lakh people across the nation. Agarbatti business needs a low to medium investment with limited to basic raw materials. The initial investment required to start a agarbatti business is approximately Rs. 10 lakh to Rs. 40 lakh. The financial aid for the same are available under SIDBI or Mudra loan (loan up to Rs. 10 lakh available). Meanwhile the Union Government approved Khadi Agarbatti Atma Nirbhar Mission on August 2, 2020, which promises to generate employment and make India self-reliant in agarbatti production. The Khadi Agarbatti Atma Nirbhar Mission aims at handholding artisans and supporting the local Agarbatti industry. It will help create sustainable employment and support private Agarbatti manufacturers to increase their Agarbatti production without any capital investment by them. Under the mission, the KVIC will provide powder mixing machines and automatic Agarbatti making machines to the workers through the successful private Agarbatti manufacturers. The Commission will provide 25 percent subsidy on the cost of the machines, the remaining 75 percent of the cost will be recovered from the workers in small instalments every month.Article: Jagran Josh dated Aug 2nd

I am running a start-up and I got my INC on 1st January 2020. We tried to apply for loans but they are not getting approved. I started an essential business using the gold loan and I don’t have any other fund available. Please advise me with alternate suggestions
Questioned by Rajendra c, Karnataka
The characterisation of an entrepreneur is a person who sorts out and operates a business taking on greater than normal financial risks. You’ve actually joined a club that not many choose to be in, but whose membership is filled with legends. Difficult times bring out the true character of company leaders. Be human, but do your best to keep a level head under pressure. Your business must be a fresh idea and not a splitting up or reconstruction of an existing business. At present, you may consider the possibilities of raising funds through Grants/Pitching Events (Best for mission-oriented start-up businesses. Even though the quantum of money is not generally large, it will be a support at this particular stage), Friends and Family, Government Loan Schemes (Central Govt. schemes include CGTMSE, MUDRA, and Stand-up India. Also, there are various initiatives by the respective states that are taken to help accelerate the growth of start-ups), Angel Investors (Reach out to angel networks such as Indian Angel Network, Mumbai Angels, Lead Angels, Chennai Angels, etc. or relevant industrialists for this), Crowd funding (via online crowd funding platforms). Apart from this, you can avail assistance through any NBFCs/ banks operating in your region for financial support.

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