Most startup founders are not aware that you can get a bank loan of up to a crore under the CGTMSE scheme, without requiring any collateral, just on the basis of the business plan. And those who have heard about this scheme, are usually under the impression that this is not possible to do without some sort of “connections” or bribery.
This is not true, as is seen by the experience of Sagar Bedmutha, Founder of of Optinno MobiTech the company that is behind the award winning SMS Blocker app.
Dare magazine has an interview with Sagar about this experience.
How much time did it take, from application to sanction?
About two months. A lot of time could have been saved, but even the bank officials were unaware of the scheme and the process.
Another important factor was that ours is a complete software (that too mobile software) business. I really had a tough time convincing the authorities that the business can be done the way I was imagining. Basically, the bank officials never had processed a loan for a software firm, and since this loan was collateral free, they were cautious in many aspects.
Your advice to entrepreneurs applying for a bank loan?
There are plenty of good schemes available for entrepreneurs. Do take time to know more about them and understand how can you take their benefit. As I mentioned, any loan process is exhaustive and at many points frustrating. But it is the cheapest source of money you can get.