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DIFFERENCE BETWEEN PMMY LOAN AND MSME LOAN

BASIC DIFFERENCE BETWEEN PMMY LOAN AND MSME LOAN

PMMY (Pradhan Mantri Mudra Yojana) Loan

MUDRA is a refinancing establishment. MUDRA does not offer directly to the micro financiers or individuals. The Government of India launched a leading scheme called Prime Minister Mudra Yojana on 8th April 2015 to spread reasonable loans to the non-corporate, small initiatives by way of supply to their funding needs.

MUDRA extends to Micro Units Development and Refinance Agency Limited shaped as a refinancing foundation providing loans up to Rs. 10 lakhs maximum to the qualified initiatives through the Profit making Banks, Cooperative Banks, NBFC and MFI etc. The debtors can approach the nearby branches of the providing institutions or apply for loans under the MUDRA scheme.

Scheme under Mudra Loan

Under the guidance of Pradhan Mantri Mudra Yojana, MUDRA has created schemes. The intermediations have been named 'Shishu', 'Kishore' and 'Tarun' to indicate the stage of development and expansion.

Shishu: loan limit up to 50,000/-

Kishor: loan limit above 50,000/- and up to 5 lakh

Tarun: loan limit above 5 lakh and up to 10 lakh

With an objective to advance business enterprise among the new age aspiring youth, it is guarantee that more importance is given to Shishu Category Units and afterward Kishore and Tarun classes.

Inside the system and generally objective of development and growth of miniaturized scale ventures area under Shishu, Kishore and Tarun, the items being offered by MUDRA are so structured, to meet necessities of various business exercises just as business visionary.

The subsidizing support from MUDRA is of two kinds:

  • Micro credit scheme for loans up to 1 lakh investment.
  • Refinance scheme for Viable Banks / Regional Rural Banks / Small Finance Banks / Non-Banking Financial Companies.

Benefits of Mudra Loan

  • To engage in revenue generation are the major goal for extension of loan amenities.
  • The debtors are not mandatory to provide any security to avail of Mudra Loan.
  • There are no handling charges for availing of the loan.
  • The loans are provided for the financed and non-funded category.
  • The loans can be in the form of term loans, overdraft facility, letters of credit or bank guarantees.
  • The Mudra loan scheme does not recommend any minimum value.

Eligibility

Enterprises and individuals falling under the following classes include MUDRA loan eligibility.

  • All non-corporate non-farm enterprises.
  • Mainly involved in revenue generation through manufacturing, trading and services.
  • Where the requirement of credit is for maximum Rs.10 lakhs or lower.
  • Involved in allied agriculture services since 1st April 2016.

MSME (Micro Small Medium Enterprise) Loan

MSME outlooks for micro, small and medium enterprises, from time to time it is also summarized to SME for small and medium enterprises.

But, in spirit, MSME and SME Loans are similar and are obtainable to industries that come under these two categories. Frequently, these loans are specified to startup holders, small business owners and women businesspersons on a short-term source. The period of MSME or SME loans varies from creditor to creditor. There are some minimum eligibility requirements in order to moderate the risk for creditors.

Benefits under MSME Loan

  • To help in getting government proposals.
  • Under bank loan, 15% import subsidy on fully programmed machinery.
  • Becomes easy to get licenses, sanctions and registrations, regardless of field of business.
  • Reimbursement of ISO license.
  • Least interest taxes.
  • Registered MSMEs gets fare subsidies.
  • Gets discharge under Direct Tax Laws.

Eligibility Criteria

The difference between the manufacturing and services inventiveness has been detached by making the investment value and annual income similar for enterprises engaged in both the sectors.

MSME –Investment and Annual Income

Sector/Enterprise Type

Micro Enterprise

Small Enterprise

Medium Enterprise

Manufacturing & Services, Both

Investment less than Rs. 1 crore

Income less than Rs. 5 crore

Investment less than Rs. 10 crore

Income up to Rs. 50 crore

Investment less than Rs. 50 crore

Income up to Rs. 250 crore

Registration Process

  • Sign up with the portal as launched by government
  • Make login credentials with the help of OTPs
  • Sign in the same at portal
  • Give access from the GST and Income tax portal
  • Upload basic information of applicant
  • Information is all about applicant and business details
  • Submit the application
  • If department satisfies with the document then issue in principle approval letter
  • With the help of letter, an applicant can visit the bank as mentioned in letter
  • If bank satisfies with all the things then they can disburse the loan amount as he wants.
  • Total discretionary power is with banks only.

Conclusion

An absence of funding is a significant issue for some business people, and it is a major reason behind why numerous organizations never reached at a point of success after having a sound business model. A lot of entrepreneurs have the drive and energy, however, not the dollars and sense to bring these into the real world.

A startup may require financing to step up the ahead. It is significant that you, as a business visionary, are clear concerning why you are raising funds. You should have a point by point monetary and marketable strategy before you approach investors. In the wake of making room, entrepreneur can design the measure of funds he required to begin the startup. There are two different ways accessible from which he can get credit. Pick the most appropriate model of financing for startup. Neusource can direct on from where you can get advance and where you ought to apply from both the models.

For further queries please contact us on: Email Id Swati@neusourcestartup.com and Phone Number 9540026175.

The NeuSource Startup Mind is the finest business startup consultant that offers various services of registration like Proprietorship Firm Registration, Partnership Firm Registration, LLP Registration, Company registration, GST Registration, Copyright Registration, ISO Registration Trademark registration and other FSSAI License etc.

27 Jun

NeuSource Startup
Akash Rai

"Any time is a good time to start a company.” Neusource indulge in providing business consultancy services which help startups to accomplish their desired results as a TAJ EXPRESS. If you’re passionate about something and you work hard, then neusource is the right choice for you.