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Bill Discounting or Invoice Discounting

Bill Discounting or Invoice Discounting

Bill discounting or invoice discounting is a method of sourcing working capital from future payables. Furthermore, the bill of exchange to the financial institution recovers the number of sales before it gets matured.

Bill discounting is a major trade activity. It aids the company’s outstanding bills which are due to be paid at a future date are sold to a bank. It also helps the bank earn some income by charging a discount/fee. The bank takes it from a seller to issue funds before the credit period ends. When the due date of the credit period comes, the seller’s client pays the full amount to the Bank.

The discount on the bill of exchange is based on the remaining time to maturity and the amount involved. The buyer gets a credit period against the letter of credit and the seller gets his advance payment. 

Bill Discounting Process:
  • Invoices are being raised when the seller/ exporter sells the goods on credit to the buyer/ importer.
  • Accepting the invoice means, that the buyer pays the entire amount as per the invoice to the seller on the due date.
  • For discounting purposes, the seller addresses his bank with the accepted bill of exchange by the buyer to discount it.
  • As per the creditworthiness of the buyer, the banks review the bill of exchange and assess the risk.
  • Bank or NBFC dispenses the fund to the seller post deducting the fee.
  • Furthermore, the seller gets the funds that can be used for business plans.

Sellers have always recognized bill discounting or invoice discounting as a beneficial financial instrument that assists them in providing working capital finance.

What are the Advantages of Bill Discounting?

Bill Discounting offers the following benefits:

  • Bill discounting reduces the chances of bad debt.
  • It facilitates the seller to improve the cash inflow and hence expand deals, seeking after development, securing hardware, etc. is possible.
  • A low rate of interest/ fees as compared to other advanced facilities is, therefore, beneficial for sellers.
  • Bill of exchange is a negotiable/ tradable instrument. Financial institutions can further rediscount it and sell it to other financial institutions.
  • You do not need to provide any collateral since the outstanding invoice serves as the collateral itself.
  • The seller/ beneficiary has to interest on the used amount only unlike other business loans.
  • Instant access to cash: It does not involve a lengthy documentation procedure.
  • No debt incurred: Bill discounting supports in saving tax liability. The chances of a company undergoing any loss or damage are less.
  • No impact on the balance sheet: Bill discounting does not affect the balance sheet of the business as it is an off-the-book process.
Eligibility for Bill Discounting

The eligibility criteria for bill discounting vary from bank to bank. The factors that affect eligibility:

  • Business Vintage
  • Business Volume and Annual Turnover
  • Financial Stability
  • Repayment history and capability
  • Business Positive Net worth or Profitability
  • Credit rating of the business
  • Previous loan defaults, if any
About Finline!

Finline is an online platform for creating financial reports for getting bank loans and investments. It’s like ‘Canva’ but for financials. If you are an entrepreneur looking for a bank loan, you need to have a well-crafted project report. We, at Finline help you with that. Our team will help you create a powerful business plan in ten minutes. That too in your language. Our reports are accepted by all public and private sector banks working in India. Click to create your report.

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Cash Credit Loan

A cash credit loan is a type of working capital loan for a company to meet its working capital requirements. The money can be withdrawn against the hypothecation of stocks and receivables. It can be availed either in the form of a secured loan or an unsecured loan. Cash credit has a loan repayment tenure of one year. In fact, the bank offers loans to an enterprise depending on the credit history of the applicant. However, businesses need to submit collateral or security to avail cash credit loans. 

The business may use these funds for any overall operational expenses including raw material procurement, machinery purchase, overhead costs, paying off salaries, debt settlement, buying real estate, inventory costs, etc.

Advantages and Disadvantages of Cash Credit Loans
Advantages Disadvantages
No collateral required  Rate of Interest is High
No CIBIL score check is required Lesser repayment period of 12 months
Interest paid is tax-deductible Difficult to avail by Startups
Quick and easily accessible with flexibility Used mainly to meet working capital requirements
Interest Rate on the withdrawn amount Short-term Loan
Source of working capital financing Minimum commitment charges
Easy arrangement Difficulty in securing
What are the Documents Required for a Cash Credit Loan?
  • Duly filled application form
  • Business Plan/Project Report
  • Copy of PAN card
  • Passport-sized photographs of the applicant
  • Identity Proof: Passport, Driver’s License, Voter’s ID card
  • Residence Proof: Voter’s ID card, Driving License, Passport, Ration Card, Telephone Bill
  • Income Proof: Last 6 months’ bank statement along with last 3 years
  • Audited financial documents
  • Last 2 year’s ITR along with the current year’s GST returns
  • Business Proof: Incorporation and sales tax registration certificates, rent agreement,
  • Business address proof: Ownership proof, property papers, house tax documents, electricity bill
  • Details of collateral or security to be submitted
  • Details of existing loans and their repayment schedule
  • Partnership deed and Memorandum of Articles (MoA)
  • Valid Trade Licenses
  • Certificate under the Shop Establishment Act
  • Lastly, the GST registration certificate
Who can avail of a Cash Credit Loan?

Individuals, professionals, business entrepreneurs, companies, partnerships, sole proprietorships, limited liability partnerships (LLPs), cooperative societies, and registered trusts engaged in manufacturing, trading, and services categorized under MSME can avail the Cash Credit Facility.

If you are an entrepreneur struggling to create a project report, don’t worry Finline is there for you. Our expert team at Finline helps you craft a compelling project report in less than 10 minutes. That too in your language. Also, our reports are accepted by all public and private sector banks working in India.

Now there is nothing stopping you from starting your dream business. Begin your journey with Finline right away!

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Point of Sale (POS) System

The Point of Sale (POS) System serves as the central element of your business. A POS is a location where your customer makes a payment for products or services at your shop. Simply put, it’s the centre where everything like sales, inventory management, payment processing, and customer management merges. 

Today, modern POS systems are fully digital, which means you can check out a customer from anywhere. All you need is a POS app and an internet-enabled device, like a tablet or phone.

The point-of-sale software goes beyond credit card processing to help retailers and restaurants. A point-of-sale system is used to refer to the cash register at a store that incorporates mobile POS features and contactless payment options, e-commerce integration capabilities, and more.

How does a POS system work for a small business?

So what does a POS system do? 

1. A customer decides to buy your product or service.

If you have a physical store, the sales associate could use a barcode scanner to look up the item’s price. Some POS systems, like Square Point of Sale, also allow you to visually scan items using the camera on your device. For online stores, this step happens when a customer finishes adding items to their cart and clicks the checkout button.

2. Your POS system calculates the price

Calculates the price of the item, including any sales tax, and then updates the inventory count to show that the item is sold.

3. Your customer pays. 

To finish their purchase, your customer will have to use their credit card, tap card, debit card, loyalty points, gift card, or cash to make the payment go through. Depending on the type of payment they choose, your customer’s bank then has to authorize the transaction.

4. The point-of-sale transaction is finalized. 

This is the moment when you officially make a sale. The payment goes through, a digital or printed receipt is created, and you ship or hand your customer the items they bought.

What are the Components of a POS system?

Every POS system comprises software and hardware components that make running the daily operations of your business. It’s important to understand what POS software options are. They are on-premise (or installed) POS terminals and a cloud-based POS system.

A cloud-based POS system with centralized payment processing, inventory management, customer loyalty program, and more.

Flexibility is key to ensuring your POS vendor works with the payment processor of your choice so that you can control cost. If you’re already using applications important to your business, make sure the POS can integrate with them seamlessly, so that you can continue using them. On-premise POS hardware, like a barcode scanner, cash drawer, card reader, receipt printer, and more.

Hardware components of a POS system

These are the common physical components required to get your POS up and running.

Monitor/tablet:

Displays the product database and enables other functions. Employee details, inspecting sales reports, and many more. Recommend replacing larger monitors with tablets.

Barcode scanner: 

Scanning barcodes extract product information and add it to the checkout total. Barcode scanners can also combine with inventory management systems to automatically adjust stock levels. It automates the checkout process.

Credit card reader: 

Since Non-compliant retailers face potentially huge losses on fraud credit card readers are a must. 

Receipt printer: 

Paper receipts remain indispensable for providing customers with a fast snapshot of their purchases or returns even Email and text receipts getting popular. 

Cash drawer:  

You’ll need a safe place to store cash for transactions. It may fade away in years, but cash is still king. Another benefit of cash: there are no associated credit card fees.

About Finline!

Finline is an online platform for creating financial reports for getting bank loans and investments. It’s like ‘Canva’ but for financials. If you are an entrepreneur looking for a bank loan, you must have a well-crafted project report. We, at Finline help you with that. Our team will help you create a powerful business plan in ten minutes. That too in your language. All public and private sector banks working in India accept our reports. Click to create your report.

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What is a Line of Credit (LOC)?

A line of credit (LOC) is a preset borrowing limit that borrowers can withdraw at any time. It is an arrangement between a financial institution, usually a bank, and a client.

The borrower can obtain money as needed until reaching the limit. It is a flexible loan from a bank or financial institution. Similar to a credit card, as money is returned, it can be borrowed again in the case of an open line of credit.

Likewise, a Line of Credit is a benefit for those who need financial support at frequent intervals. As with a loan, a line of credit will impose interest as soon as money is borrowed not on the whole amount. The interest rate is usually variable. Lines of credit tend to be lower-risk revenue sources relative to credit card loans. Resulting from this, the customer can maintain monthly payments without becoming overloaded with the loan EMIs.

What are the Features of Line of Credit? 
1. Unsecured: 

As a credit line is an unsecured loan, there is no need for collateral.

2. Interest Rate: 

The borrowers save a large amount by not paying the interest rate on the loan amount which is unused not on the total amount. Eventually, reduces the burden of paying off EMIs.

3. Higher Loan Amount: 

Under the line of credit which is termed under business loans, MSMEs can avail a high loan amount.

4. No Hidden Charges: 

There are no extra or hidden charges levied on the unused credit line or the total sanctioned amount.

5. Flexible Re-payment Tenure: 

Borrowers find it flexible and it offers a relaxed interest rate that needs to be re-paid in the form of EMI for only the money borrowed. 

What are the Advantages of Line of Credit? 

1. It can be used in various forms. These include discounting, demand loans, overdraft protection, commercial bill purchases, revolving credit card accounts, and so on.

2. For self-employed individuals, LOC is immensely beneficial as they can take the amount in a smaller quantity and set up a business.

3. This provides a substantial amount of money in the bank that can be claimed at any time if required.

4. Individuals who don’t want to go for personal loans owing to the high interest rate charges can opt for LOC.

5. While you opt for a line of credit, you can expect to have a very high credit limit.

What is the Eligibility Line of a Credit Loan?

1. Good credit/CIBIL score

2. The creditworthiness of the borrower

3. Decent tenure of business existence

4. Valid and authentic business documents and certificates

5. Stable credit and financial history

6. Business existence with profitability

About Finline!

Finline is an online platform for creating financial reports for getting bank loans and investments. It’s like ‘Canva’ but for financials. If you are an entrepreneur looking for a bank loan, you need to have a well-crafted project report. We, at Finline help you with that. Our team will help you create a powerful business plan in ten minutes. That too in your language. Our reports are accepted by all public and private sector banks working in India. Click to create your report.

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What is a Letter of Credit?

A letter of credit, or “credit letter” is a letter from a bank guaranteeing payment. They can provide security to a seller that will be received on time and for the correct amount. If the buyer is incompetent to make such a payment, the bank covers the full or the outstanding amount on behalf of the buyer. 

A letter of credit is issued against a pledge of securities or cash. Banks typically collect a fee, ie, a percentage of the size/amount of the letter of credit.

Letter of credit is used majorly in international trade. The bank provides a financial guarantee to enterprises that deal in the import and export of goods. Enterprises doing business overseas have to deal with foreign suppliers and they demand certainty of payment before executing any transaction. Therefore, a letter of credit is crucial to provide payment assurance to the suppliers or exporters.

How a Letter of Credit Works?

Because a letter of credit is typically a negotiable instrument. If a letter of credit is transferable, the beneficiary may assign another entity, such as a corporate parent or a third party, the right to draw.

Banks also collect a fee for service, typically a percentage of the size of the letter of credit. The International Chamber of Commerce Uniform Customs and Practice for Documentary Credits oversees letters of credit used in international transactions. 

  1. The buyer must first approach the bank and request to issue a letter of credit.
  2. The issuing bank, generally an international bank pays the beneficiary or any bank nominated by the beneficiary. The job of the advising bank is to authenticate and check the information in the letter of credit
  3. After authenticating, the advising bank proceeds to reassure the seller that his money will be processed.
  4. After the purchased items are shipped by the buyer, the seller receives a bill of landing.
  5. From here the banks take over as the landing bill is sent to the bank on a charge of negotiations which in turn check the exported goods. 
  6. The shipping documents are then shared with the issuing bank.
  7. The issuing bank proceeds to disclose all documents to the buyer. 
  8. Finally, the buyer makes the payment to the issuing bank, which in turn forwards the payment to the negotiating bank.
  9. Banks collect a fee for issuing a letter of credit.
Types of Letters of Credit
1. Commercial Letter of Credit

This is a direct payment method in which the issuing bank makes the payments to the beneficiary. In contrast, a standby letter of credit is a secondary payment method in which the bank pays the beneficiary only when the holder cannot.

2. Revolving Letter of Credit

This kind of letter allows a customer to make any number of draws within a certain limit during a specific period.

3. Traveler’s Letter of Credit

For those going abroad, this letter will guarantee that issuing banks will honour drafts made at certain foreign banks.

4. Confirmed Letter of Credit

A confirmed letter of credit involves a bank other than the issuing bank guaranteeing the letter of credit. The second bank is the confirming bank, typically the seller’s bank. The confirming bank ensures payment under the letter of credit if the holder and the issuing bank default. 

5. Transferable Credit

Transferable credit, as the name suggests is a type of LC in which the beneficiary can transfer his/her rights to third parties. The terms and conditions may differ as per the trade and industry.

About Finline!

Finline is an online platform for creating financial reports for getting bank loans and investments. It’s like ‘Canva’ but for financials. If you are an entrepreneur looking for a bank loan, you must have a well-crafted project report. We, at Finline will help you with that. Our team will help you create a powerful business plan in ten minutes. That too in your language. All public and private sector banks working in India accept our project report. Click to create your report.

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Small Scale Industries India

Small-scale industries in India, also known as SSIs, form the lifeline of an economy. Therefore, it is very significant for a country like India. Being a labour-intensive industry still requires small capital. This is very effective in generating job openings. 

The investment in such industries is one-time. Small-scale industries connect small enterprises that manufacture goods or provide services. The industry operates with the help of smaller machines and fewer workers. The whole investment in limit in plant & machinery in such industries does not exceed 1 crore.

However, in a developing country like India, small-scale industries export approximately half of the products (45-55%). Some small-scale industries are created because of the need for vendors for multinational companies.

Generally, those industries that manufacture, produce, and render services form small-scale industries. These enterprises must fall under the regulations, set by the Government of India.

Small-scale industries are categorized into three:-
  • Manufacturing Industries: Manufacturing small-scale industries examples are power looms, engineering industries, food processing, etc. Generally, individuals own these types of small-scale industries. They produce finished goods either for consumption or used in processing industries. 
  • Ancillary Industries: Ancillary industries can also be identified as those companies that make machines for multinational companies or medium-scale industries. They don’t generally make all the parts themselves. 
  • Service Industries: Repair shops and maintenance industries come under the category of service industries
  • Feeder industries and mining or quarries are other types of industries.
What are the objectives of the small-scale industries?
  • Create more employment opportunities.
  • Develop the rural and less developed regions of the economy.
  • Reduce regional imbalances.
  • Optimum utilization of unexploited resources of the country.
  • Improve the standard of living of people.
  • Equal distribution of income and wealth.
  • Solve the unemployment problem.
  • Use the latest technology aimed at producing better quality products at lower costs.
Registration of SSI & Overview

SSI registration is a registration provided by the Ministry of MSME through the Directorate of Industries of the State Government. The Government gives several subsidies to businesses, and SSI registration helps businesses become eligible for them. One should register online through Udyam Registration. The process of SSI/MSME registration & guidelines:

Micro and small enterprises, as defined by the MSME Act, of 2006, can obtain SSI registration. A small enterprise is an enterprise whose investment does not exceed Rs.10 crore, and whose turnover does not exceed Rs.50 crore.

  • Visit the Udaym Registration portal 
  •  Click on the “For New Entrepreneurs who are not Registered yet as MSME or those with EM-II”.
  • Fill in your “Aadhaar Number” and “Name of the Entrepreneur”
  • Click on the “Validate and Generate OTP” button. 
  • You will receive OTP to your mobile number. 
  • Enter OPT on the PAN verification page. 
  •  Enter PAN details and click on the “Validate PAN” button.
  • The Udyam Registration page will open. Fill in all the personal details and industry details such as industry name, address, and bank account details. 
  • Click on the “Submit and Get Final OTP” button.
  • A message of successful registration with a reference number will appear. 
  • After verification of registration, the MSME Registration Certificate is issued.
What are the Benefits of obtaining SSI Registration?
  • The government offers various tax rebates to Small Scale Industries
  • A credit for Minimum Alternate Tax is allowed to be carried forward for up to 15 years instead of 10 years.
  • Many government tenders are only open to the SSI.
  • Easy access to credit.
  • Many rebates and concessions are available once registered.
  • The cost of acquiring a patent, or the cost of setting up the industry reduces.
  • Given the higher preference for government license and certification.
About Finline!

Finline is an online platform for creating financial reports for getting bank loans and investments. It’s like ‘Canva’ but for financials. If you are an entrepreneur looking for a bank loan, you need to have a well-crafted project report. We, at Finline help you with that. Our team will help you create a powerful business plan in ten minutes. That too in your language. All public and private sector banks working in India accept our reports. Click to create your report.

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What are PSB Loans in 59 minutes?

The Government of India launched a quick business loan portal for individuals who wish to extend their existing business. Under this scheme, MSMEs can get loan amounts from Rs. 1 Lakh to Rs. 5 Crore in less than 59 minutes from Public and Private Sector Banks and Non-Banking Financial Companies (NBFCs).

PSB Loans in 59 Minutes is an online marketplace, that allows business individuals to apply for a Business Loan at an interest rate of 8.50% onwards. 

This action was taken to ease the MSME business and promote a self-employed business model in India by reducing the loan approval process and long queues at the bank. PSB Loans 59 minutes aims to approve the business loan in 59 minutes, thus significantly reducing it from a long 30-day process and expecting to disburse it in 7-8 working days if approved.

PSB Loans in 59 minutes: Features and Benefits
  • Loan Amount starting from Rs 1 Lakh: PSB Loans in 59 minutes provide loan amounts starting from Rs 1 Lakh to Rs 5 Crore. All business individuals with business requirements small or big can get benefits. 
  • Rate of Interest: The interest rate for PSB Loans in 59 minutes starts from 8.50% onwards per annum.
  • Minimal Documentation: PSB Loans in 59 minutes, the complete process of a Small Business Loan for MSMEs is supposed to be super fast and hassle-free that too with minimum documentation.
  • Advanced Technology Loans: PSB Loans in 59 minutes prepare the loans without human interruption till the stage of sanction. 
  • Apply at Multiple Banks: The loan applicants can apply for Small Business Loans multiple times in one go.
  • Safe and Secure: The entire data of the applicants is safe and secure with the highest level of security.
  • Integration with Govt. Facilities: It is integrated with the latest facilities like Income Tax returns, GST, and Bank statements so it assists in the conclusion making of the loan application.
Documents Required for Loan Application

Check the following documents required to apply for PSB loans in 59 minutes:

  • Loan Applicant with existing business can apply for a small business loan with the following documents:
  • GST Details: GST Identification Number (GSTIN) and his / her GST ID and password.
  •  Last 6-month bank statement in PDF format for all business-related accounts (maximum 3 bank accounts)
  • Details of Income Tax: Latest 3 years’ ITR in XML format
  • Info about the Loan Required
  • Details of Proprietorship/ Partners/ Directors
  • E-KYC Documents of the Loan Applicant
  • Personal and educational details of the applicant.
Know your eligibility before applying for a business loan from psbloansin59 minutes.com:
  • The business must be an existing one.
  • The borrower should have a Login ID of psbloasnin59minutes.com, GST, and IT compliant and should have the last 6 months’ bank statement.
  • Income/Revenue
  • Repayment Capacity of the Borrower
  • Existing credit facilities
  • Other factors set by the Financial Lender
Things to Keep in Mind

PSB Loans in 59 Minutes centres on automating the loan process for MSME business loans. As a result, one can get an eligibility letter or approval in less than 60 minutes. The applicant can select the bank from the provided list for a smoother MSME loan process.

  1. The loan amount ranges from Rs 1 Lakh to Rs 5 Crore
  2. PSB Loan in 59 minutes Rate of Interest starts from 8.50% onwards
  3. The Loan Processing takes 59 minutes; reduced from 20-25 days
  4. Post the approval of the loan, the Loan Amount takes 7-8 working days to be disbursed.
  5. The Loan is processed without personal intervention till the sanction and/or disbursement stage.

Click Here to Apply

About Finline!

Finline is an online platform for creating financial reports for getting bank loans and investments. It’s like ‘Canva’ but for financials. If you are an entrepreneur looking for a bank loan, you need to have a well-crafted project report. We, at Finline help you with that. Our team will help you create a powerful business plan in ten minutes. That too in your language. All public and private sector banks working in India accept our reports. Click to create your report.

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 8 Steps to Starting Online Business

Launching an online business can be an affordable plan to become an entrepreneur. And with the wide variety of e-commerce platforms and channel options, you have more access than ever to get your products and services in front of a huge audience. Here are 8 Steps to Starting a Small Business Online:

1. Start with the Right Product or Service

The first step for starting an online business is to assess the viability of your new business idea. Your business doesn’t have to be focused on a physical product. The most significant thing is to figure out what problem you’re solving or what need you’re fulfilling. There’s a tremendous possibility out there for the right idea.

2. Understand the Costs to Run an Online Business

Develop a business plan while launching an e-commerce business. It doesn’t want the burden of an office or a physical store. But you still need to have a good grip on your costs.

However, as you’re factoring overhead and other costs will affect your pricing. More than 69 per cent of online shopping carts are dropped, and the number one cause is that extra fees, like shipping and taxes, were too high. By having accurate cost estimations, you can set your prices so that your overhead costs are covered without creating hurdles to sales.

3. Choose a Business Name & Business Structure

Determining your business’ name is an important step in the startup process. Because your business will primarily function online, your preferred name must be open for registration as a business name in your country and within the digital space.

This means you will need to check whether the name you want is available as a:

  • Business name in your country
  • Domain name
  • Username on each of the social media platforms you plan to use

If your chosen name isn’t available as a domain name or social media username, consider different permutations of the name, and remember that many domain name extensions beyond the original “.com” are available. Additionally, it’s important to check that your name and domain name aren’t infringing on registered trademarks.

Most small business owners choose from the following structures:

  • Sole proprietorship. 
  • Partnership. 
  • Limited liability company (LLC). 
  • Corporation. 

It’s always a good idea to discuss with a CA to define the appropriate business structure for your new business. Because each structure has separate tax provisions, you may also want to consult a tax professional.

4. Choose the Right Shipping Structure

If you’re selling products made by someone else, you may choose drop shipping. Drop-shipping is when the manufacturer or distributor ships the products directly to the customer after you forward the order data. Here other third-party fulfillment services can handle your inventory and manage to ship for you. 

5. Make use of Online Marketplaces

Many online retailers prefer to sell on third-party marketplaces in addition to, their websites. Platforms like Facebook, Amazon, eBay, and Flipkart marketplace give you entree to huge audiences.

The platform offered competitive shipping rates, with the fees that the platform charges. Amazon’s plans are priced at 99 cents per item or $39.99 per month. Both plans have additional fees, depending on the items sold, volume, and other factors.

5. Build a Community of Customers

Use social media platforms like Twitter and Facebook to post pictures of your newest products. Also shares information about the products and materials used, which adds compelling content to the posts. 

This type of community builds loyalty to your business. And there are several ways to address it. You could create an email newsletter that addresses information straight to your audience. Or you can use social media platforms to retain your customers. Even YouTube videos or podcasts, can educate your customers and be a form of community-building. The key to success is to strengthen the customer relationship.

6. Create a Great Consumer Experience

Build your website to make an exceptional customer experience. Which allows you to either build online stores on its platform or integrate its technology into your website. Or you may choose a web development and consulting firm to operate your e-commerce site so you can concentrate on other fields of your business.

7. Choose Your Sourcing and Fulfillment Methods. 

Depending on the products or services you’ll be offering, you will also need to evaluate and choose your sources of supply and inventory, as well as how you will deliver your product or service to your customer.  

8. Use your Analytics & Marketing Strategies

One of the great strengths of online businesses is the ability to analyze everything. Monitor what customers are buying, how they find your business (Google or Facebook, for example), why they leave carts, and other information about your website. Doing so allows you to twitch your offerings and marketing strategy to be more effective. Depending on which online platform you use, you may be able to generate emails that reach out to shoppers who have dropped carts or create special offers for loyal customers.

These are the 8 steps to start your dream online business. By strengthening your target market’s trust in your launch through social media and different advertising techniques, you will be flooring the way for a successful launch.

About Finline!

Finline is an online platform for creating financial reports for getting bank loans and investments. It’s like ‘Canva’ but for financials. If you are an entrepreneur looking for a bank loan, you need to have a well-crafted project report. We, at Finline help you with that. Our team will help you create a powerful business plan in ten minutes. That too in your language. Our reports are accepted by all public and private sector banks working in India. Click to create your report.

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MSME/UDYAM Registration

Any person who intends to establish a micro, small or medium enterprise may file MSME/UDYAM Registration online in the Udyam Registration portal. It is based on self-declaration with no requirement to upload documents, papers, certificates, or proof. On registration, an enterprise will be assigned a permanent identification number to be known as the “‘Udyam Registration Number”. An e-certificate, namely, the “Udyam Registration Certificate” shall be issued upon completion of the registration process.

MSME/UDYAM Registration Everything you need to know:
  1. The MSME registration process is free, fully online, paperless, and based on self-declaration.
  2. Registration of an MSME does not require uploading any documents or proof.
  3. Only an Adhaar Number will be enough for registration.
  4. The Aadhaar number shall be of the proprietor in the case of a proprietorship firm, of the managing partner in the case of a partnership
  5. The organization or its authorized signatory shall provide its GSTIN and PAN along with its Aadhaar number.
  6. PAN & GST linked details on investment and turnover of enterprises will be taken automatically from Government databases.
  7. The government online system will fully integrate with the Income Tax and GSTIN systems.
  8. PAN and GSTIN are required for Udyam Registration with effect from 01.04.2021.
  9. No enterprise shall file more than one Udyam Registration.
  10. Whoever intentionally misrepresents or attempts to suppress the self-declared facts and figures appearing in the Udyam Registration or update process shall be liable to such penalty as specified under section 27 of the Act.
  11. Those who have EM-II or UAM registration or any other registration issued by any authority under the Ministry of MSME will have to re-register themselves.
MSME/UDYAM Registration Process
  1. Fill in the MSME registration form with all required details online provided in the Udyam Registration portal.
  2. Click on the first link if you are a New Entrepreneur who is not yet registered as an MSME.
  3. Enter the Aadhaar Number and Name and click on ‘Validate & Generate OTP’.
  4. You will have to fill in the PAN details, after the completion of verification. You can select the No option if you don’t have a PAN card yet.
  5. Post this, you will have to fill the form having field numbers 5-24.
  6. At the end of the form, an OTP request will be sent to your phone again. Enter the OTP and verification code to submit the form successfully
  7. After successful registration, a “Thank You” message will appear with a Registration Number. Keep that number handy for later reference.
  8. After the submission of the application form, it can take 2-3 days for the approval and registration to complete.
  9. If the application receives approval, completion of the registration and sending of the MSME certificate via email will occur.
MSME/UDYAM Registration FOR EXISTING ENTERPRISES
  1. All existing enterprises registered under EM–Part-II or UAM shall register again on the Udyam Registration portal on or after the 1st day of July 2020.
  2. All enterprises registered till 30th June 2020, shall be reclassified following this notification.
  3. The existing enterprises registered before 30th June 2020, shall continue to be valid only for a period up to the 31st day of March 2021.
  4. An enterprise registered with any other organization under the Ministry of Micro, Small, and Medium Enterprises shall register itself under Udyam Registration.
Also Read: What is MSME Loan? MSME Eligibility, Documents, MSME Schemes.
Benefits of MSME/UDYAM Registration

Registration of your MSME is not compulsory. If you want to register, then your business can enjoy an excise privilege scheme from direct taxes, and avail of special schemes from banks custom-made for MSMEs.

Also, registered businesses with an MSME certificate will benefit from different government departments, including electricity. 

  1. MSME certificate helps in getting government tenders.
  2. Under a bank loan, a 15% import subsidy on fully automatic machinery
  3. Becomes easy to get licenses, approvals, and registrations, irrespective of the field of business
  4. Compensation for ISO certificate expenditure
  5. MSME registration helps new entrepreneurs, traders, and business owners in getting loans at low interest rates.
  6. Registered MSMEs get tariff subsidies and tax and capital subsidies
  7. Gets exemption under Direct Tax Laws
  8. Avail special rebates and concessions on patents and industry set-ups 
  9. One-time settlement fee for the amount unpaid 
  10. Government preference for MSMEs 
  11. Get credit guarantee schemes from the Government 
  12. Special consideration on International Trade fairs
  13. Bar code registration subsidy 
  14. Support from your state government

*Note MSME/ Udyam registration process is completely free.

About Finline!

Finline is an online platform for creating financial reports for getting bank loans and investments. It’s like ‘Canva’ but for financials. If you are an entrepreneur looking for a bank loan, you need to have a well-crafted project report. We, at Finline will help you with that. Our team will help you create a powerful business plan in ten minutes. That too in your language. All public and private sector banks working in India accept our project report. Click to create your report.

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What is MSME Loan?

Entrepreneurs and owners of businesses can apply for MSME Loans, commonly referred to as Micro, Small, and Medium Enterprise Loans. This sort of loan gives you access to operating capital that you may use for a range of things, such as purchasing expensive equipment, paying your workers’ wages, growing your firm, or buying new goods. In India, several lenders offer MSME loans to their clients. However, banks charge different rates of interest.

On May 13, 2020, the Indian government revised the concept of an MSME and made the changing public. The following is the revised description of an MSME:

  • Investment-only requirements have replaced the investment plus yearly turnover criteria for MSME categorization.
  • The Indian government also raised the investment cap for MSME unit categorization. It implies that more companies and enterprises can now benefit from MSME programs.
MSME Loan Classification 

Micro, Small, and Medium Enterprises can apply for MSME loans to expand their existing enterprises or start new ones. Interest rates for MSME loans start at 7.65% annually. Loans are available from as low as Rs. 50,000 to many crores. Depending on the approved loan amount, the loan payback duration may last up to fifteen years.

MSMEs (Micro, Small & Medium Enterprises) are classified in two ways:

  • Manufacturing Enterprises are involved in the manufacture or production of goods if the industry plans on extending plant and machinery in the process of value addition to the final product.
  • Service Enterprises interested in providing or rendering service
MSME registration steps

The procedures for signing up as a new user for MSME are listed below:

  • Navigate to the Ministry-MSME-registration page at https://udyamregistration.gov.in/Government-India.
  • Choose “New Businesses who have not yet been Accredited as MSME or those who hold EM-II” if you’ve never registered.
  • Before selecting “Validate and Generate OTP,” you must first provide your name and Aadhaar information. A One-Time Password will be sent to your cellphone number (OTP). Enter the OTP to authenticate. After that, you must establish it by providing your PAN and organization information.
  • Provide your contact information and details about the business or facility where you serve in the next step.
MSME Classification 
Investment in Plant & Machinery or Equipment Annual Turnover
Micro Not more than Rs. 1 Crore Not more than Rs. 5 Crore
Small Not more than Rs. 10 Crore Not more than Rs. 50 Crore
Medium Not more than Rs. 50 Crore Not more than Rs. 250 Crore
What are the Eligibility Criteria for MSME Loan?
  • The age limit should be a minimum of 18 years to a maximum of 65 years
  • Individuals, SMEs, MSMEs, business owners, women entrepreneurs, self-employed professionals, people falling under SC/ST/OBC category, Private or Public Limited, Sole Proprietorship, Partnership Firm, Limited Liability Partnership engaged only in trading services, and manufacturing sectors are the eligible category under this scheme.
  • Business Turnover: Min. Rs. 10 lakh for existing enterprises
  • Good repayment history.
  • CIBIL score above 700
What are the Documents Required for an MSME Business Loan Application?
  • Self-drafted Business Plan/Project Report
  • Duly filled Application form.
  •  Passport-sized photographs
  • KYC documents of applicant and co-applicants that include Passport, Aadhar card, Voter’s ID card, Driving License, PAN Card, and Utility Bills (Telephone, Electricity)
  • Last 12 months’ bank statement
  • Copy of Business Incorporation of Company Establishment
  • Any other document required by the lender
MSME Loans under Government Schemes – 2021

Popular MSME schemes launched under the Ministry of MSME offered by banks or NBFCs are mentioned below :

  • CGTMSE: Credit Guarantee Fund Trust for Micro and Small Enterprises
  • CLCSS: Credit Linked Capital Subsidy Scheme
  • Credit Guarantee Scheme
  • MUDRA Yojana under PMMY
  • National Small Industries Corporation (NSIC) Subsidy
  • PMEGP: The Prime Minister Employment Generation Programme
  • PMRY: Prime Minister’s Rojgar Yojana
  • PSB Loans in 59 minutes
  • Standup India
  • Startup India
Purpose of MSME Loans
  • Answer working capital requirements
  • For new business development
  • Maintain business cash flow
  • Introduce new equipment or machinery
  • Purchase of raw materials, vehicles, tools, etc
  • Stock up inventory
  • Pay off rent, and salaries, hire staff, train staff, etc.
About Finline!

Finline is an online platform for creating financial reports for getting bank loans and investments. It’s like ‘Canva’ but for financials. If you are an entrepreneur looking for a bank loan, you must have a well-crafted project report. We, at Finline will help you with that. Our team will help you create a powerful business plan in ten minutes. That too in your language. Also, all public and private sector banks working in India accept our project report. Click to create your report.