Many entrepreneurs are concerned how to raise funding for their start up with being aware of the government scheme which they could make use of.
While starting your entrepreneurial journey it seems really hard, not because you lack a business plan or an idea but because you lack the right amount of funding. Incase even if you loan some money from a money lender that's another headache, the interest you pay will exceed the principal.
What is the solution then?
We in Tamil nadu are really blessed to have opportunities benefiting entrepreneurs.
Both state and central government provide loan with subsidy for entrepreneurs and help them kickstart their ventures.
PMEGP & UYEGP
Prime minister's employment generation programme
Unemployed youth employment generation programme
Let's start with PMEGP.
This is a central government's scheme which supports micro small mini enterprises with loan. For manufacturers the maximum loan provided is 25 lakhs and for service based businesses the maximum loan provided is 10 lakhs.
This scheme is suitable for entrepreneurs who has a minimum educational qualification of 8 standard completion.
To apply for this you shall approach DIC / KVIB / KVIC after filling your application online for PMEGP loan.
Now for UYEGP,
The maximum loan amount for manufacturers is 10 lakhs and for service based businesses the maximum loan amount is 5 lakhs.
Educational qualification is the same as PMEGP
And you shall apply for this loan at the MSME portal online.
Advantages in both PMEGP and UYEGP
1.Reservations are provided special classes.
(* while applying you can find if you fall under this category)
2. Subsidy for motivating entrepreneurs to provide more employment opportunities to deserving people
Minimum of 15% to 35% subsidy provided depending upon your category.
3. Special training and mentoring provided before processing the loan and guidance from the District Industry centre (DIC).
4. Support in business growth by becoming a seller at GeM
(Government eMarketplace).
Not suitable for,
1. Agriculture based businesses are not eligible for these schemes.
( you can try starting value added product businesses)
2. People above 35 years (normal class )/ 45 years ( special class )are not eligible.
3. If there is any outstanding loan unprocessed this scheme is not eligible.
4. Minimum investment amount 5% for special classes and 10% for normal classes is mandatory. With this minimum investment from your pocket you are not eligible for these schemes.
Why are you still waiting start now!
1. Find what business is suitable for you in your location
2. Take a market survey , look for the demand and supply gap and find if you can fill that.
3. Create a viable business model and start raising your initial investment threshold.
4. Try bootstrap model before you apply for the loan and create some profit records.
5. Now once you feel and decide this is the right time, apply for the loan.
Stay confident and positive and apply online in the respective portals.
Once applied for the loan, follow up at DIC (District Industry centre) for PMEGP and MSME for UYEGP.
Time taken for the loan application to get passed for PMEGP is maximum of 30 working days. For UYEGP its maximum 7 working days.
After you business plan is validated and your verification is processed. You would be trained for 10 days if you have applied for UYEGP loan and 30 days if you have applied for PMEGP loan and after the training is over the respective banks shall process your loan and you shall start your business process.
For further clarification you can visit the government's official website.
