Many small business owners hear that they can get a 'CGTMSE loan' without collateral. In reality, CGTMSE is a guarantee trust: the loan is given by a bank or eligible lender, and CGTMSE guarantees a portion of it.
Who is involved
- The borrower: an eligible micro or small enterprise
- The member lending institution: the bank or financial institution that sanctions the loan
- CGTMSE, which covers a percentage of the lender's risk for a guarantee fee
What it means for you
- The lender still appraises your proposal on its normal credit norms
- Collateral and third-party guarantees are not required for the covered credit
- An annual guarantee fee applies, as notified by CGTMSE
- Approval remains entirely the lender's decision
Preparing to apply
Have your Udyam registration, KYC, financial statements, bank statements and a clear project report ready. A well-documented proposal makes the lender's assessment easier.
Scheme limits, coverage and fees are revised from time to time. Always check the latest information on the official CGTMSE website before you apply.
Abhigamyah Fins is a loan consultancy. We are not a bank or lender. All lending decisions, interest rates and terms are decided solely by the relevant lender. Loan approval is not guaranteed.
