Collateral Free Loans
The loan provides by the bank without supporting any security is known as security free. A special type of collateral free loan scheme is available in India under the Credit Guarantee Fund Trust Scheme for Micro & Small Enterprises (CGTMSE). Under this scheme, the micro and small enterprises (MSEs) are eligible for collateral-free loans up to Rs.1. crore in values.
The biggest problem faced by these enterprises has been a lack of funding, resulting in limited opportunities for growth, working capital needs or scaling. Most MSEs typically start out with a service or product that may not earn revenue in the near future.
Required documents for collateral-free loans:- (All copies of documents should be self attested by the customer)
Private limited companies with SME/SSI registration can apply
Product development expenses
Procurement of computers
Tools machinery etc.
Share allotment proof.
Share purchase agreement.
Process for collateral-free loans:
Prepare a Detailed Project Report or Business Plan
Ensure your request is Bankable
Choose the Right Bank and Branch
Build a Rapport and Ensure the Banker understands your Business
Be Patient & CGTMSE Scheme Overview.