The Udyam registration is not just like a formality; it is essential for all entrepreneurs in India. The process of Udyam registration online is very simple and easy. Through the Udyam registration, access to a lot of government benefits and schemes. The credit guarantee scheme is one of the benefits of accessing the Udyam registration. The credit guarantee scheme is run by the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE). This scheme is very helpful for growing your business.
What is Udyam registration?
Udyam registration is a government-issued certificate granted to eligible businesses as Micro, Small, or Medium Enterprises (MSMEs) under the MSME Development Act, 2006. In July 2020 it was introduced as a replacement for the Udyog Aadhaar. The process of Udyam registration is made easy online with a paperless process. After successfully completing your registration process, you get 16 digits of the Udyam registration number FSSAI. The Udyam Registration ID is very important to log in to your Udyam portal. Udyam registration helps to grow your business. And accessing the various government benefits.
Types of businesses eligible for Udyam registration:
- Proprietorships.
- Partnership firm.
- Hindu undivided family (HUF).
- One-person companies (OPC).
- Private limited companies.
- Public limited companies.
- Limited liability partnership.
- Co-operative society.
- • Any other legal entity.
Required documents for Udyam registration:
- No need for physical documents, but keep the following documents with you:
- Aadhaar number of proprietor, partner, or director.
- PAN card.
- Address of the business.
- Bank details
Steps to register the Udyam certificate:
Step 1: Visit the official website of Udyam at
Step-2: Select the new registration of the Udyam option.
Step 3: Enter all the details in the application form, like:
- Name of the applicant.
- Mobile number.
- Email ID.
- PIN code, state district.
- Gender.
- Social category.
- Business name.
- Date of commencement of business
- Address of the business.
- Type of organisation.
- Main business activity of enterprises.
- Investment plan and machinery.
- Annual turnover.
- Aadhaar and PAN and GST details and bank details.
- Additional details of the business.
Step 4: Enter the verification code.
Step 5: Submit the application form.
Points to remember:
- Even if you have multiple businesses, only you can register the Udyam certificate one time.
- To update Udyam certificates on time and place any changes in your business.
- • The most required documents for Udyam registration are GST and PAN.
What is a Credit Guarantee Scheme?
The Credit Guarantee Scheme (CGS) is a Government of India initiative that helps micro and small enterprises (MSEs) get unsecured business loans. When you register your business on the Udyam Registration Portal (the official platform for registering MSMEs), you will be eligible to apply for loan benefits under the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE).
The meaning of CGTMSE is the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE), which was launched by the ministry of MSME. The main purpose of CGTMSE is to provide loan guarantees to banks and financial institutions that lend to micro and small industries. And also encourage banks to grant loans to small businesses without collateral.
Key features of the credit guarantee scheme:
- If you want to get this scheme, you must have the Udyam registration certificate.
- The loan limit under this scheme is up to 5 crore.
- This scheme is providing collateral-free loans.
- This scheme provides various types of loans, such as a term loan, a working capital loan, or both.
Credit Guarantee Scheme Benefits With Udyam Registration
Collateral-Free Loans:
- Banks and financial institutions can provide loans without collateral or the need for third-party guarantees.
- CGTMSE provides a guarantee of up to 85 percent of the loan limit (depending on the type of loan and the institution concerned).
Easy Access to Credit:
- MSMEs that register their business will be recognised as legal entities, making it easier to get loan approval through this scheme.
- This is mainly useful for startups or small businesses that do not have fixed assets.
Coverage of Term Loan & Working Capital:
- This guarantee applies to term loans and working capital loans related to fixed assets.
- Maximum loan eligible for guarantee: ₹5 crore.
Support for First-Time Entrepreneurs:
- Many new entrepreneurs have difficulty obtaining bank loans due to lack of credit record. CGTMSE will fill this gap.
- Promotes self-employment and the creation of small businesses.
Low Guarantee Fees:
- CGTMSE charges a fairly low guarantee fee for microloans and women entrepreneurs.
- Fees vary according to loan amount and regional location (for example, lower in the Northeast).
You Can Apply for Print Udyam Certificate Though Udyam Portal
Conclusion:
The Credit Guarantee Scheme, combined with Udyam Registration, significantly empowers micro and small enterprises by providing easy access to collateral-free loans backed by government guarantees. This reduces the financial risk for lenders and encourages them to provide more loans to small businesses, startups, and new entrepreneurs. As a result, Udyam-registered organisations will be able to showcase their development skills through this scheme, increase their operations, and contribute to the economy with more trust and financial support. “Overall, this scheme is playing a major role in supporting the development of micro, small, and medium enterprises in India and achieving economic equality.”
