TAXAJ - TAXAJ Knowledge Base #Government Registrations

How to Apply MSME -SME Loan ?

Mon, 25 May 2020 01:47:08 +0530

Process to apply for MSME Loan as Announced by Finance Minister

According to the new guideline provided by the government, the investment limit has been revised upwards and an additional criterion of turnover introduced for the MSME loans. Previously, the Micro, Small and Medium Enterprises Act (MSME Act) 2006 defined a micro-unit with the investment of up to Rs 25 lakh, a small enterprise with investment between Rs 25 lakh and Rs 5 crore and a medium one with investment between Rs 5 crore and Rs 10 crore. There was a distinction between the manufacturing and services, so in case of services, the investment limit for micro was up to Rs 10 lakh, for small, the investment cap was Rs 10 lakh to Rs 2 crore and for medium, the limit was Rs 2 crore to Rs 5 crore.

Now the revised definition of MSMEs introduced recently removed the distinction between manufacturing and services. This means a micro firm is one with investment up to Rs 1 crore and turnover less than Rs 5 crore, the small firm has investment up to Rs 10 crore and turnover up to Rs 50 crore and the medium-firm will be one with an investment of up to Rs 20 crore and turnover under Rs 100 crore. This new changes not only help a startup or the already functioning business to grow but it also helps them gain more benefits with greater transparency in the classification. This will also allow the government to verify a company’s turnover using the GST data than the investment in machinery. If you are looking to get an MSME loan, here is a step-by-step guide on how to apply for MSME loan online.

Are you MSME or SME ?

MSME loans are unsecured loans that are offered by banks and NBFCs only if the applicant meets the certain eligibility criteria. MSME loans are defined by Indian Government and RBI, as the loans for business enterprises need support in terms of finance, infrastructure and other areas.

New MSME Definition

The distinction between the manufacturing and services enterprises has been removed by making the investment amount and annual turnover similar for enterprises engaged in both the sectors.

MSME – Merged Criteria: Investment and Annual Turnover
Sector/Enterprise Type	Micro Enterprise	Small Enterprise	Medium Enterprise
Manufacturing & Services Sector, Both	Investment less than Rs. 1 crore Turnover less than Rs. 5 crore	Investment less than Rs. 10 crore Turnover up to Rs. 50 crore	Investment less than Rs. 20 crore Turnover up to Rs. 100 crore

Key Takeaways of New MSME Definition introduced in ‘Atmanirbhar Bharat Abhiyan‘ or Self-reliant India Scheme 2020 by Government of India.

Collateral Free Loans to MSMEs
MSME Loans worth of Rs. 3 lakh crore
Moratorium period offered is 12 months
Manufacturing and Service MSMEs shall be considered as same entities
Repayment Tenure of 48 months
100% Credit Guarantee
To benefit approx. 45 lakh units
Interest Rate as low as 8.25%

What are the Documents required to apply for the Loan ?

Documents Required for MSME Loan

A. The existing units are expected to approach the bank with the following indicative documents:
A.1 For Existing Units seeking WC facilities:
- Last 3 years audited balance sheet with notes on account & annexure
- Last 3 years audited profit & loss statement with notes on accounts & annexure
- Last 3 years IT returns
- Last 3 years balance sheet & profit & loss statement of associate / sister concerns
- CMA data
- Order book position / contracts / proof of demand
- Last GST assessment order
- Statutory clearance certificate
- Lead Bank assessment note in case of consortium finance.
- Details of Associate / Sister / Group Concerns with names, bankers, credit facilities enjoyed, present status etc.
- Details of Collaterals wherever applicable.
A.2 Additional documents required in case of take over account:
- NOC / status of the account
- Credit report from the existing bankers
- Statement of account for last 1 year.
A.3 Additional documents required for Term Loan / LC for capital goods application, if they are not included in project report:
- Cash flow statement for entire repayment schedule
- Fund flow statement for entire repayment schedule.
- Profitability projections and assumptions for entire repayment period
- Break-even analysis.
- IRR working
- DSCR working
- CA certificate for promoter's contribution
- Project Report covering:
  a) Details of cost of machinery, suppliers of machinery
  b) Quotations / proforma invoices from suppliers
  c) Installed capacity calculation
  d) Raw material details & their availability
  e) Market survey: viability reports from market, reports from associations
  f) Project implementation schedule.
  g)Status of various clearances required.
A.4 Additional documents required in case of factory building:
- Building approval plan
- Estimate from Architect
- Statutory clearances: Environment, pollution clearance, and other applicable clearances.
- Power & water sanction proof,
- Any other clearances like explosive license etc wherever applicable to different projects.
A.5 Additional documents required for raw material LC:
- Pattern of purchase
- Quantum & Value of import and domestic purchases.
- Import license
- Percentage of Total Purchase under LC
- Lead-time required
- DA period in case of DA LC
A.6 Additional details required in case of Bank Guarantee:
- Details of existing guarantees & facilities
- Bid bond / security deposit Details
B. In case of New Projects seeking TL & WC facilities Complete Project Report to be submitted including the following indicative documents by the Entrepreneurs:
- Projected Balance Sheet for the entire repayment period,
- Projected P & L Account for the entire repayment period,
- Presumptions made in Projected Profitability Estimates
- Projected Cash Flow Statement for the entire repayment period,
- Projected Fund Flow Statement for the entire repayment period,
- Break Even Analysis
- DSCR Computation for the entire repayment period, with Average DSCR Calculation,
- IRR Computation,
- CA certificate for promoter's contribution
- IT return & personal Balance Sheet of the promoter's & guarantors
- Bio data of Promoter's / Directors
- Details of cost of machinery viz Name of Machine, Machine Capacity, Supplier of
  machinery, Quoted Value etc.
- Estimates of Construction by Architect / Chartered Engineer.
- Copies of Various Basic / Statutory Approvals to establish the unit & to run the activity.
- Installed capacity calculation
- Raw material details & their availability
- Market survey: viability reports from market, reports from associations
- Project implementation schedule.
- Market Demand & Market Arrangements
- Details of Collaterals wherever applicable.

Process to Apply

Complete the upto date GST Compliance, GST Return Filings, Last 3 Years Income Tax Filing for your Business (At least upto March 2020)
Contact your Bank Manager or Relationship Manager in which you already are holding Account for your Business.
Ask for the Appointment for Application for Loan under MSME
Check on your Banks Website or Your Internet Banking Login Dashboard for the Loan Application.
Fill this Form for Application of Loan
Prepare complete set of documents as given above and visit your Bank for further processing along with Application form.

Note:

You should not be a defaulter of any loan previously and must have a satisfactory cibil score to be eligible for the loan.
Keep in constant touch with your banker.

For further help, talk to us!

Patta Chitta – Apply Online, Check Status & Validity

Thu, 30 Apr 2020 18:48:00 +0530

What is Patta Chitta – How to Apply Online, Check the status & Validity

What is a Patta?

When land is bought, a Patta is registered by the government of India. A Patta is a legal document authorized by the government of Tamil Nadu. Patta is registered in the name of the landowner. A Patta is also referred to as the Record of Rights(ROR).

An owner has to hold a Patta if he or she wants to buy land for any purpose. From building societies to shops to anything, a Patta ensures that the property was purchased according to the legal norms of the Tamil Nadu government. A Patta can be obtained from the tahsildar officer of the district. It consists of details such as Patta number, name of all the owners, survey number, tax details, area of land, and the address.

A Chitta is also an official document used in transactions or land deals. It is obtained from a local taluka or village administration office. Chitta contains details such as ownership, area of the land. A Chitta classifies the property into two categories. The first is Punjai, which is dry land, and the other is Nanjai, which means a wetland. A Punjai is low on water resources, while Nanjai has an excess of water.

Tamil Nadu government decided to merge Patta and Chitta into a single official document called Patta Chitta. A patta can be obtained from the Tahsildar’s office of the particular district. A patta consists of the following details:

Name of the District, Taluk and Village
Patta Number
Name of the owner
Survey number and subdivision
Is it a Wetland or a Dry land (Nanjai Nilam and Punjai Nilam in Tamil)
Area of the land and Tax details

What is a Chitta?

It is a land revenue document maintained by Village Administrative Officer (VAO) and the Taluk office. A chitta provides the relevant detail of the ownership, area, size, .etc of the land. Most importantly it classifies the land into nanjai (wetland) and punjai (dry land).
As of 2015, the government of Tamil Nadu does not issue a Chitta. The Patta and Chitta were merged into one document with all the relevant details mentioned in the Patta.

Applying for Patta Chitta Online

After the Patta and Chitta got merged into one, the Tamil Nadu government has now made the process of filing Patta Chitta online. You can follow these steps:

Log on to the Tamil Nadu Patta Chitta Website, the website is available in two languages – English & Tamil.
Select the Patta & FMB / Chitta / TSLR Extract and choose the district where your property is located. Add the details of the property for which you require a Patta Chitta. It will have details like Taluk, Village, Ward and Block, Survey Number and Sub Division Number.
Upon submission of the property details, a certificate from the Town Survey Land Register will be issued online with details of the property. The certificate will contain details such as the type of construction on the property, the municipal door number, locality, type of land, survey number etc.

Checking the status of your Patta Chitta

If you wish to check the status of your Patta Chitta you can do so here. As soon as you enter your Application ID the status of your Patta Chitta will be reflected.

Validity of your Patta certificate

The validity of the issued certificates can be checked online here. All you need to do is add your reference number.

Fees

A patta can be obtained online for a nominal fee of Rs.100.

How to apply for Patta Chitta online in Tamil Nadu?

Step 1: Log on to the official site at https://eservices.tn.gov.in/

Step 2: Opt for the View Patta & FMB/Chitta/TSLR Extract’ option.

Step 3: Enter details such as taluk, village, ward, survey number, etc., and proceed.

Step 4: When you submit, you will get a certificate from the Town Survey Land Registrar online with details about your property. This certificate will have all details about locality, type of land, survey number, etc.

*Sample purposes only

How to check status of Patta Chitta online?
If you have applied for the Patta Chitta online, you can check the status here. Use your application ID for the same. You can also check the validity of the same after you input the reference number. You can obtain the Patta Chitta online at a nominal cost.

How to transfer Patta Chitta?

You must apply for the transfer of Patta. The application needs to be submitted in the respective Tehsildar’s office. Do carry photocopies and original documents of the sale deed, tax receipts, electricity bill, encumbrance certificate when applying for transfer of Patta Chitta.

The application may be accepted or rejected on the basis of the study that the concerned department does.

Services on the mobile app
In 2018, chief minister EK Palaniswami launched the android application called Amma App. This mobile app allows users to access land records, Patta Chitta, from their phones besides a host of other services.

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