MSMEs are high supporters of India’s economy because they provide them with a large number of jobs and aid in the process of manufacturing, besides serving as a facilitator of export. But to make use of all these facilities, MSME business owner needs to have their business registered. MSME registration does not only help an individual take advantage of the different schemes of the government but also enhances his business credibility and potential.
Let’s now discuss some of the key benefits of registering an MSME.
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Access to Government Schemes
The Indian Government has designed a number of programs and incentives for small business enterprises who are specifically registered their MSME business and these benefits include subsidies, grants, and other financial support to increase the competitiveness of MSMEs. Some of them are;
● Credit Guarantee Fund Scheme for Micro and Small Enterprises (CGTMSE): This scheme offers collateral-free loans to MSMEs.
● Technology Upgradation Schemes: These schemes offer financial support to upgrade and modernize your business.
● Subsidy Programs: Many subsidies on patent registration and industrial promotion are exclusively available for registered MSMEs.
By registering your business, you open doors to these government benefits, which can significantly reduce your operational costs and enhance productivity.
Easier Access to Funding
MSME registration increases your chances of accessing MSME loan and funding. Financial institutions and banks are more willing to lend to registered MSMEs because they are considered credible and secure. In addition, registered MSMEs can enjoy the following benefits:
● Priority Lending: Banks and financial institutions give priority to loans for MSMEs under certain government policies.
● Lower Interest Rates: Most of the banks, NBFCs, and other financiers have lower interest rates offered on loans advanced to registered MSMEs.
● Collateral-Free Loans: MSMEs get collateral-free loans which minimize risks for the small business owner under the CGTMSE scheme.
Access to funds becomes easier because it will ensure that your business is financially well-equipped in all aspects to grow and become stable.
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Legal Recognition and Credibility
When your business is registered as an MSME, it has legal recognition, which contributes to its credibility. Clients, suppliers, and investors regard registered businesses as a reliable and professional enterprise. Besides, registration legally safeguards your business through:
● Dispute Resolution: Registered MSMEs can avail of quicker dispute resolutions through specialized legal procedures.
● Protection Against Delayed Payments: The MSME Development Act protects registered businesses from delayed payments by large companies. If payments are delayed, registered MSMEs can charge interest on the pending amount.
Legal recognition fortifies your business position in the market and enables smoother operations.
Tax Benefits and Incentives
Registration of MSME avails several tax benefits and incentives that can considerably cut your financial burden. The important advantages include:
● Tax Exemptions: Registered MSMEs can claim exemptions on direct taxes during their first years, which reduces the cost of setting up the business.
● Rebates: Businesses can also seek rebates on patent costs and industrial promotion expenses.
● Lower GST Rates: MSMEs are often eligible for lower Goods and Services Tax rates, which lowers the cost of goods and services.
These tax benefits make it easier for small businesses to invest in growth and compete effectively in the market.
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Conclusion
In conclusion, MSME registration is a crucial step for any small business aiming to grow and succeed in India. From access to government schemes and funding to legal recognition and tax benefits, the advantages are numerous.
Registration of your MSME not only helps create a way for access to finances but also makes your credibility in the business market strong. Moreover, support from NBFCs plays a vital role in dealing with MSMEs by offering flexible and quick business loan. NBFCs are known to have simple eligibility criteria, quick processing time, and loans customized according to the specific requirements of MSME.
If you’re a business owner looking to take your venture to the next level, registering the MSME now should be a part of finding that all-important source of funding in the avenues of NBFCs or other financial houses.
This is quite a simple process with potentially huge long-term gains. Don’t let support and opportunities go up in flames while MSME registration and business loans can boost your business- make it stronger and prosperous today!
