STEPS TO START AN ENTERPRISE – Part IV
FINANCIAL ASSISTANCE
l Financial assistance is available from institutions such as Nationalized Banks,Rural Banks, Small Industries Development Bank of India (SIDBI), NABARD, Regional Rural Banks, National Small Industries Corporation (NSIC), State Financial Corporations etc. depending upon the project requirement and promoters background.
2. Financial assistance has two components. Loan for fixed capital to acquire Plant and Machinery, Land and Building. Working capital loan is used to meet day to day operational cost of the production.
3. Financial Institutions provide composite loans covering Buildings,plant and machinery and working capital.
4. Any one of the financial institutions can be approached to get funds keeping in view their specific schemes.
5. Evaluate and compare the terms and conditions, including rate of interest and repayment period of loan offered by the different financial institutions.
6. Select the financial institution, which offers funds at minimum interest rate as per your repayment plan to suit the project.
7. Choose the Institution which is in close proximity to the project site if other terms and conditions are similar.
8. The major eligibility criteria are return on the investment and profitability of the project proposed to be set up.
9. Any financial institution will support the project if repayment is assured.
10. 20-25% of Total Investment has to be contributed as margin money by the promoter.
11. Care should be taken to have good cushion of Working capital. The Financial Institutions in most of the cases don’t finance full Working capital. One should keep back up for at least 6 months W.C and at times 12 Months
12. Financial Institutions insist margin money depending upon the category of the entrepreneur, risk factor and existing scheme under which the project will be financed.
13. The amount of loan can be used to cover all types of investments required in the project, such as machinery & equipment, working capital, land and buildings etc.
The general conditions for getting financial assistance are:
* Technical /Economic/Market viability
* Promoters contribution
* Capacity to repay loan
* Collateral Securities/Guarantee
Monday, November 15, 2010
Saturday, November 13, 2010
ENTERPRISE DEVELOPMENT-PartIII
STEPS TO START AN ENTERPRISE – Part III
PROJECT REPORT
The project report is a document, which gives an account of the project proposal to ascertain the prospects of the proposed plan/activity. The project report,(sometimes known as Bankable Project Report) should contain detailed information about:
a) Land & building required
b)Manufacturing/Production Capacity per annum
c)Manufacturing Process, Technology
d) Machinery & equipment along with their prices and specifications
e) Requirements of raw materials
f) Power & Water required.
g)Manpower needs
h)Marketing
i)Cost of the project and production.
j)Financial analysis & Techno-economic viability of the project.
* Model project profiles are available with the MSMEDIs (formerly SISIs) & DIC's for the guidance of entrepreneurs. However, these project profiles have to be recast in accordance with specific needs of the entrepreneurs and the current prices of inputs.
*MSMEDIs, National Small Industries Corpn., and State Govt. agencies viz. DICs, State Finance Corpn.,KVIC, etc., can help in preparing the Project Report. It can also be prepared by collecting detailed information on various inputs.
*Information in detail is required about the technical process, requirements of plant and machinery, raw materials, manpower requirement, market information and statutory obligations (like pollution control, Licenses, if needed, and public safety) etc. The details of power and water tariff, land/shed/building and selling prices etc. needs to be collected as prevalent in the market.
*Micro, Small & Medium Enterprises Development Institute’s (formerly Small Industries Service Institutes), Design and Development Centers like MSME Technology Development Center’s (formerly PPDC's) /Tool Room's, Research and Developmental agencies such as NRDC,CSIR Labs, Regional Research Laboratories etc., can help the entrepreneur in selecting the product, process technology, suitable equipments etc.
Filing of Entrepreneur Memorandum (EM)
l Filing of memorandum is optional for all Micro, Small & Service Sector Medium Enterprises. However to get incentives from Govt. it is mandatory
2 Filing of memorandum optional for Filing of memorandum mandatory for manufacturing sector Medium Enterprises.
3 EM has to be filed with General Manager, DIC, of the concerned district.
The EM is a document containing the details of the Enterprise to be set up.
The Entrepreneur has to fill up the EM in quadruplicate and submit to the concerned DIC in his/her district and obtain one copy duly signed by the competent authority at the District Industries Centre. The EM is required at all stages like Power connection, Tax Registration, etc.
PROJECT REPORT
The project report is a document, which gives an account of the project proposal to ascertain the prospects of the proposed plan/activity. The project report,(sometimes known as Bankable Project Report) should contain detailed information about:
a) Land & building required
b)Manufacturing/Production Capacity per annum
c)Manufacturing Process, Technology
d) Machinery & equipment along with their prices and specifications
e) Requirements of raw materials
f) Power & Water required.
g)Manpower needs
h)Marketing
i)Cost of the project and production.
j)Financial analysis & Techno-economic viability of the project.
* Model project profiles are available with the MSMEDIs (formerly SISIs) & DIC's for the guidance of entrepreneurs. However, these project profiles have to be recast in accordance with specific needs of the entrepreneurs and the current prices of inputs.
*MSMEDIs, National Small Industries Corpn., and State Govt. agencies viz. DICs, State Finance Corpn.,KVIC, etc., can help in preparing the Project Report. It can also be prepared by collecting detailed information on various inputs.
*Information in detail is required about the technical process, requirements of plant and machinery, raw materials, manpower requirement, market information and statutory obligations (like pollution control, Licenses, if needed, and public safety) etc. The details of power and water tariff, land/shed/building and selling prices etc. needs to be collected as prevalent in the market.
*Micro, Small & Medium Enterprises Development Institute’s (formerly Small Industries Service Institutes), Design and Development Centers like MSME Technology Development Center’s (formerly PPDC's) /Tool Room's, Research and Developmental agencies such as NRDC,CSIR Labs, Regional Research Laboratories etc., can help the entrepreneur in selecting the product, process technology, suitable equipments etc.
Filing of Entrepreneur Memorandum (EM)
l Filing of memorandum is optional for all Micro, Small & Service Sector Medium Enterprises. However to get incentives from Govt. it is mandatory
2 Filing of memorandum optional for Filing of memorandum mandatory for manufacturing sector Medium Enterprises.
3 EM has to be filed with General Manager, DIC, of the concerned district.
The EM is a document containing the details of the Enterprise to be set up.
The Entrepreneur has to fill up the EM in quadruplicate and submit to the concerned DIC in his/her district and obtain one copy duly signed by the competent authority at the District Industries Centre. The EM is required at all stages like Power connection, Tax Registration, etc.
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