Loan up to Rs 100 crore will be available without guarantee, great news for startups and MSMEs, government has brought super loan scheme…

Business Desk – Amidst the ongoing tension in West Asia, there is a good news for the micro, small and medium enterprises (MSMEs) of the country. The special thing is that the government’s new Emergency Credit Line Guarantee Scheme (ECLGS 5.0) will easily provide funds to businesses facing crisis. Experts believe that this scheme will ensure continuity of business operations for companies, and will also protect banks from possible financial losses.

Why was this plan needed?

Although there is demand for goods in the market, due to the ongoing geopolitical tension abroad, the prices of raw materials have increased, due to which many companies are facing cash crunch. Shekhar Bhandari of Kotak Mahindra Bank says that due to this help of the government, now businesses will be safe. As soon as the loan guidelines were finalized, banks proactively contacted business owners to provide them timely assistance.

How much loan is available, how can it be obtained?

Through this scheme, the government aims to distribute new loans worth a total of Rs 2.55 lakh crore in the market. Under this initiative, companies can take an additional “top-up” loan of up to 20% of their existing credit exposure, subject to a maximum of Rs 100 crore.

The most important thing is that the government is giving 100% guarantee to the banks against this additional loan. This means that even if a business fails, banks will not suffer any financial loss.

Payment Terms and Conditions

According to Presha Paragash, CEO, Credit Season India, this scheme will prove to be very beneficial for small business owners who are facing financial crisis at this time. It is worth noting that borrowers will be given a period of five years to repay this loan.

A major saving grace of this scheme is the one year ‘moratorium period’ included in it, which means borrowers will not be required to repay any installment of the loan during the first year. This provision will provide ample opportunity to business owners to stabilize their operations and recover.