MSMEs have become the country’s major pillar of foundation. In terms of contribution, MSMEs have bestowed an overwhelming 30% of the country’s GDP, approximately 45% of the manufacturing and around 48% of India’s output.
Moreover, MSME extends benefits to the economy and encourages technological transformation in the country, due to which the Government offers financial assistance to these enterprises through various schemes, incentives and subsidies. So, to avail of benefits under the MSMED Act, businesses need to register as MSMEs. Moreover, with this registration, they can apply for an MSME business loan during financial crunches.
Key benefits of getting businesses an MSME registration
Apart from improving the chances of acquiring an MSME business loan, this MSME registration will allow prospective business owners to develop their organisations and make proper business models.
Here are some of the essential benefits of MSME registration:
- Avail substantial credit
One of the greatest benefits of MSMEs is that unlike other small businesses that face difficulties securing loans due to the absence of collateral security, financial institutions offer competitive interest rates against MSME loans.
Borrowers must also know the ideal credit scores to have when applying for loans to avail the credit at affordable rates and favourable lending terms.
- Subsidy on patent registration
Per existing laws, MSMEs registered with the MSME industry will get a 50% subsidy on patent registration fees. Small businesses and enterprises can innovate and work on new projects and technologies.
- Exemption of overdraft interest rate
Organizations that are registered under MSME can avail 1% exemption on overdraft interest rate. This further allows small businesses to be secured in unfavorable markets.
- Income tax exemption
Another advantage of possessing an MSME certificate is income tax exemption. Because of the presumptive taxation basis, individuals are not required to maintain a detailed book of accounts and go through an audit process. Moreover, entrepreneurs can also avail of competitive SME loan interest rate against their borrowings, thereby saving considerably on the tax payment.
- Grants for infrastructural development
Since MSMEs generate employment and boost entrepreneurial ventures, the Government identifies training sectors for the MSMEs and offers capital grants for infrastructural improvement and support for entrepreneurial development. Alternatively, borrowers can also opt for business loans from reputed financiers like Bajaj Finserv at favourable interest rates and flexible tenor.
However, borrowers must also learn about the reasons for business loan rejection and work on them to improve the eligibility and easily ensure approval. Apart from availing a collateral-free MSME business loan, entrepreneurs are eligible for a subsidy for industrial promotion as mentioned by the Government.
Furthermore, borrowers must know the benefits of MSME loans to maximise and utilize funds based on their financial requirements. Besides, borrowing such credit options from leading financiers also provides exclusive pre-approved offers on various financing options, such as business loans, personal loans, credit cards, etc.
These personalized offers significantly remove the hassle of extensive documentation and save time. Check your pre-approved offers by mentioning your name and contact details and accelerate the loaning procedure.
MSME registration extends multiple benefits and incentives involving monetary and non-monetary ones. If sufficient financing is keeping you from establishing your business, then you can obtain an MSME business loan and register your business to enjoy government benefits as well.
Apart from these, MSME business owners can also get a business loan from reputed financiers extending substantial credit at competitive rates and along with pre-approved offers. Therefore, MSMEs are rapidly growing with the help of financial support from the Government and financial institutions in the form of MSME business loan and other incentives or schemes. This knowledge on MSME registration will boost the entrepreneurial spirit of youth.