1. Bank loans (collateral-free)

The collateral-free credit applies to all small and micro-business verticals as specified by the Government of India. This initiative by our government ensures funds to both micro- and small-sector enterprises. Under this scheme, both the previously registered and the new enterprises can avail the deemed benefits. The Credit Guarantee Trust Fund Scheme was introduced by the Government of India not single-handedly but in consultation and collaboration with the Small Industries Development Bank of India and the Ministry of MSME.

2. Subsidy on patent registration

Under the existing legislations, the MSMEs duly registered with the ministry stand to benefit from a 50% subsidy on their patent registration fees. This incentive motivates and encourages both small businesses and firms to sustain innovation and handle new projects and technologies. Any MSME can avail of this subsidy by applying to the respective ministry.

3. Overdraft interest rate exemption

MSMEs are entitled to avail of a benefit of 1% on an overdraft of their business; however, the procedural details of the scheme usually vary from bank to bank. This option ensures the safety of small businesses, particularly at times of unfavorable markets or recession.

4. Industrial promotion subsidy eligibility

Businesses are also eligible for subsidies for industrial promotion as provided by the Government of India once they are successfully registered with the ministry as MSMEs.

5. Protection against payments (delayed payments)

Given the current volatile economic scenario, MSMEs constantly face the risk of delayed payments, which consequentially impacts their business negatively in its entirety.

Therefore, to bail out the MSMEs in such a scenario, the Supreme Court of India has made it compulsory that any buyer of goods or services from the registered MSMEs has to honor the payment either before the due date or within 15 days from the date at which the buyer had accepted the goods or services. In the case of a default, the buyer is obligated to pay penal interest for the payment due as mandated by the Reserve Bank of India.

This will deter a prospective buyer from delaying payment due to the concerned MSME.

6. Fewer electricity bills

Based on their MSME Registration Certificate, all MSMEs are entitled to concessions on their electricity bill. This enables MSMEs to boost their production and accept more work orders without any concern regarding capital expenditure on costs such as electricity and maintenance. A duly filled in prescribed proforma and the certificate of registration are the two documents that are to be submitted by the MSME to the department of electricity in this regard.

7. ISO certification charges reimbursement

Any registered MSME can claim reimbursement of the expenses that were made to obtain an International Organization for Standards (ISO) certification. Needless to say, this motivates the MSMEs to have their respective businesses certified by the ISO; obviously, the ISO certification helps the MSMS to expand their business abroad too in terms of high-quality exports.