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Tag: Startup funding India

  • TOP 5 GOVERNMENT SCHEMES YOU CAN ACCESS AFTER MSME REGISTRATION

    INTRODUCTION

    Micro, Small, and Medium Enterprises (MSMEs) form the backbone of the Indian economy. To promote entrepreneurship, encourage self-employment, and reduce dependency on formal employment sectors, the Government of India has launched several targeted schemes. These initiatives aim to provide financial support, collateral-free loans, grants, and technical assistance to MSMEs at various stages of their business journey. Read here:-Scheme-booklet-Eng.pdf

    In this article, we explore five major government schemes designed to empower MSMEs and startups. Whether you’re a first-time entrepreneur or looking to expand an existing business, these schemes can offer the financial foundation you need.

    TMWala can assist in identifying the right scheme, preparing required documents, and guiding you through the application process for smoother approvals.

    GOVERNMENT SCHEMES FOR MSME

    India’s MSME sector benefits from a wide range of government-backed initiatives that provide both funding and operational support. From collateral-free loans to startup subsidies, these schemes are tailored to meet the unique needs of businesses at various growth stages. Some of the most prominent schemes include

    • Pradhan Mantri Mudra Yojana (PMMY)
    • MSME Subsidy 2025
    • Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE)
    • Prime Minister’s Employment Generation Programme (PMEGP).

    These schemes serve one common purpose to foster economic participation through accessible finance, reduce credit dependency, and support India’s growing base of micro and small enterprises.

    1. PM Mudra Yojana Loan

    The Pradhan Mantri Mudra Yojana (PMMY), launched in April 2015, is a flagship initiative of the Government of India aimed at supporting non-farm micro and small enterprises through collateral-free loans of up to ₹20 lakhs. It targets a broad spectrum of beneficiaries, including individuals, proprietors, self-employed professionals, partnership firms, and companies engaged in income-generating non-farm activities.

    Eligibility requires a clean credit history, and lenders may assess technical capabilities for specialized sectors.

    This scheme is particularly attractive because it removes the biggest barrier many small businesses face i.e., collateral.

    Mudra loans are classified into three categories:

    • Shishu (up to ₹50,000)
    • Kishore (₹50,001 to ₹5 lakhs)
    • Tarun (₹5 lakhs to ₹10 lakhs)
    • Some banks also offer Tarun Plus for loans beyond ₹10 lakhs up to ₹20 lakhs.

    Application Process: Applicants must register on the Udyami Mitra portal, create a business profile, select the appropriate loan category (Shishu, Kishore, Tarun, or Tarun Plus), choose a lending institution, upload required documents, and submit the application online. A unique application number is generated for tracking purposes.

    Required Documents: Documents vary by loan category, but generally include

    • Identity and address proof,
    • Business-related documents,
    • Bank statements,
    • Financial reports for higher loan amounts.

    TMWalacan assists you by determining the right loan category, preparing detailed documentation, and improving your chances of loan approval by aligning your business proposal with required compliance requirements.

    2. How to Apply for MSME Subsidy

    The MSME Subsidy 2025 is a government initiative offering a non-repayable financial grant of up to ₹5 lakh to eligible startups and small businesses classified under the MSME category. The scheme is designed to support newly registered ventures by helping them manage initial setup costs, invest in essential machinery, or adopt new technologies and infrastructure. Unlike loan-based schemes, this grant does not require repayment. It is implemented to encourage innovation and entrepreneurship across manufacturing, services, Agri-processing, textiles, and tech-based sectors.

    This subsidy is ideal for early-stage startups that may not be ready for debt-based funding. By offering upfront capital, it significantly reduces the initial burden of launching a business.

    Eligibility Criteria:

    • Business Registration: Must be a newly registered MSME on or after January 1, 2025.
    • Udyam Registration: Mandatory registration on the Udyam portal.
    • Investment Cap: Initial capital investment should not exceed ₹1 crore.
    • Turnover Limit: Projected annual turnover must be below ₹5 crore in the first year.
    • Sector Coverage: Open to all sectors defined under the MSME classification.
    • Eligible Entities: Individual proprietors, partnerships, LLPs, and private limited companies.

    Application Process:

    • Register on Udyam Portal– Ensure the business is officially Udyam-registered.
    • Visit the MSME Subsidy 2025 Portal– Apply through the dedicated government portal.
    • Fill in the Application Form– Provide business details and investment plans.
    • Upload Required Documents– PAN, Aadhaar, Udyam certificate, business plan, and bank details.
    • Submit & Track– Submit the form and monitor application status using the application ID.

    This scheme serves as a direct boost for early-stage MSMEs, aiming to reduce credit dependency and promote sustainable business growth.

    3. CGTMSE Scheme for MSME

    The Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) is a government-backed scheme jointly launched by the Ministry of MSME and SIDBI to facilitate collateral-free credit to Micro and Small Enterprises (MSEs). It provides a guarantee cover to banks, NBFCs, and other eligible financial institutions, encouraging them to extend credit without demanding tangible security.

    Eligibility Criteria: The scheme is open to both new and existing Micro and Small Enterprises engaged in manufacturing or service-related activities. However, it specifically excludes businesses involved in agricultural activities, Self-Help Groups (SHGs), and Joint Liability Groups (JLGs). Loans of up to ₹2 crore are eligible under the scheme.

    How to Apply:

    • Identify a Participating Lender– Approach a bank or NBFC that participates in the CGTMSE scheme. Comparing terms across multiple lenders is recommended.
    • Submit a Loan Application– Provide a detailed loan proposal, including your business plan, KYC documents, financials, and project reports if applicable.
    • Loan Appraisal– The lender assesses the business viability and decides on the loan amount.
    • CGTMSE Guarantee Application– Once the loan is sanctioned, the lender applies for guaranteed coverage from CGTMSE on behalf of the borrower.
    • Loan Disbursement– After the guarantee is processed, the loan is disbursed to the borrower.

    This scheme greatly enhances the bankability of micro and small units that might otherwise be denied formal credit due to a lack of collateral.

    4. PMEGP Loan Eligibility

    The Prime Minister’s Employment Generation Programme (PMEGP) is a credit-linked subsidy scheme aimed at promoting self-employment through micro-enterprise development in both rural and urban areas. The scheme is open to individuals and entities looking to establish new manufacturing, service, or business units.

    Eligibility Criteria:

    • Age & Education: Applicants must be at least 18 years old and have passed at least Class VIII.
    • New Units Only: Only new projects are eligible for funding; existing businesses are not covered under this scheme.
    • Eligible Entities: Individual entrepreneurs, self-help groups (not availing benefits under other schemes), cooperative societies, charitable trusts, and production-based institutions are eligible.
    • No Income Cap: There is no upper limit on income for eligibility.
    • Bankable Projects: The business proposal must be financially viable and acceptable to banks.
    • Caste/Category Consideration: Special category applicants (SC/ST/OBC/minorities, women, ex-servicemen, differently-abled, etc.) are eligible for higher subsidies with lower margin money contributions.
    • No Prior Default: Applicants should not have defaulted on any loan from a bank or financial institution.

    Eligible Sectors:

    • Manufacturing: Food processing, textiles, wood/bamboo products, chemicals, etc.
    • Services: Transport, healthcare, education, and repair services.
    • Business/Trade: Select retail and wholesale trade categories.

    Application Process:

    • Register on the PMEGP portal PMEGP Home.
    • Fill out the application form with personal, educational, and project details.
    • Upload necessary documents:
      • Educational certificate (Class VIII pass),
      • ID/address proof, caste/category certificate (if applicable),
      • Project report, bank details,
      • Photographs.
    • Submit the form online for screening and bank processing.

    PMEGP plays a significant role in reducing unemployment by enabling individuals to start viable businesses. For additional working capital needs post-approval, entrepreneurs may explore personal loans for expansion.

    5. MSME LOAN SCHEMES

    Beyond grants, the government also facilitates a wide array of MSME loan schemes. These include term loans, working capital financing, equipment financing, and credit guarantee-backed lending through CGTMSE. Whether you’re scaling production, purchasing new machinery, or hiring staff, these loan schemes are structured to provide affordable credit options with minimal security requirements.

    Most MSME loan schemes can be accessed through participating financial institutions, both public and private. These schemes are designed to suit different business models, from manufacturing units to service-based operations.

    CONCLUSION

    MSME loan schemes are a crucial pillar in India’s push to strengthen its micro, small, and medium enterprise ecosystem. From offering collateral-free loans under the Pradhan Mantri Mudra Yojana, to non-repayable grants through the MSME Subsidy 2025, and credit-backed support via CGTMSE and PMEGP, the government has created a comprehensive framework to support every stage of business development.

    These schemes serve one common purpose to foster economic participation through accessible finance, reduce credit dependency, and support India’s growing base of micro and small enterprises. By addressing capital, credit, and operational challenges, they empower entrepreneurs across manufacturing, services, and trade sectors to start, sustain, and scale their ventures with confidence.

    Entrepreneurs and MSME owners are encouraged to assess their eligibility, utilize official portals for applications, and take full advantage of these financial tools to build sustainable and competitive enterprises in today’s economy.

    With digital guidance, expert advisors, and real-time application tracking, TMWala helps simplify the application process, ensuring entrepreneurs make the most of the government’s support ecosystem.

  • USING INTELLECTUAL PROPERTY AS A COLLATERAL FOR LOANS

    INTRODUCTION

    The transforming economy of India has brought intellectual property to the forefront of economic development. With the growing number of new startups and technology-driven enterprises, the role of intangible assets like trademarks, trade dress, copyright, and patents has become crucial. The exclusive IP rights of IP owners have become economic tools for them, that help them to grow their business and attract more investment. 

    In a country like India, where start-ups often don’t get good funds and access to capital is hard, IP-backed finance helps them explore all the options they can have to build their business. The IP-backed finance is a concept that uses intellectual property rights as collateral for loans, which help the business to get finance globally.

    In this article, we discuss what IP-backed finance entails, its types, benefits, challenges, and notable case studies along with how platforms like TMWala can play a pivotal role in facilitating IP-driven financing models.

    IP-BACKED FINANCING IN INDIA

    In India, IP-backed financing has gone through a long journey with several developments, including the National IPR Policy and provisions in the SARFAESI Act, 2002, which recognised intangible assets as “Property”. 

    The government, recognizing the growing importance of intellectual property, has also taken various steps to promote development in the financial department, which includes IP as a financial asset. The National IPR policy encourages IP securitization to support commercialization. Despite this developing approach, India has yet to witness large-scale success in IP-backed financial transactions.

    TMWala, as a comprehensive IP monetization and management platform, can assist startups and businesses in understanding the value of their intellectual property assets and prepare them for leveraging these assets in financial transactions. With expert tools for IP valuation and portfolio structuring, such platforms can bridge the gap between legal recognition and commercial viability.

    TYPES OF IP ELIGIBLE FOR FINANCING

    IP assets for finance can be categorized into two types:

    1. Formal IP

    This covers those IP assets that are easily monetized, identified, and legally protected. Intellectual property, like industrial design, copyrights, trademarks, and patents are example of such assets. These are formal IPs that have legal status, and investors are more likely to accept them.

    2. Informal IP (or Know-how)

    In this, assets like trade secrets, supplier chains, procedures, and brand reputation are included as informal intellectual property. Although they are very helpful on practical grounds, the financial institution finds them less appealing because they are difficult to measure and do not have the same legal protection as formal IP assets do. While approving loans, financial institutions in India have mostly taken formal intellectual property into account. But if we talk about international practice, even informal IP assets are considered as reliable source of security.

    BENEFITS OF IP-BACKED FINANCING

    1. Expanding Access to Capital

    IP-backed finance provides a new way for Indian start-ups to raise money if they are having trouble meeting the standard collateral requirements. This is especially important in the biotech and technology industries, where intellectual property (IP) has significant value, and where physical assets may be scarce.

    2. Diversification of Collateral Pools

    By integrating intangible assets into its investment frameworks, IP-backed financing enables financial institutions to diversify their risk. Additionally, this change is in line with contemporary valuation methods and worldwide best practices.

    3. Protecting Personal Assets

    Founders are typically expected to provide personal guarantees. By reducing the need for such guarantees, using intellectual property as collateral protects individual wealth while facilitating corporate growth.

    4. Appreciable Nature of IP

    In contrast to structures or machinery, intellectual property (IP) can increase in value over time as a result of branding, market share, or possible licensing. A powerful patent or trademark can raise a company’s value or produce long-term royalties, making it a more desirable asset for banks.

    CHALLENGES IN IP-BACKED LENDING

    Even with the obvious advantages, several obstacles still prevent IP-backed funding from being widely used in India:

    1. Complex and Subjective Valuation

    A combination of technical, legal, and business knowledge is needed to value intangible assets. An IP asset’s value is greatly influenced by some factors, including lifetime, competitive advantage, market demand, and possible litigation. Indian banks frequently lack the internal resources necessary to carry out these complex appraisals.

    2. Rapid Technological Obsolescence

    Existing patents may soon become outdated due to the rapid pace of invention in fields like biotechnology and information technology. Therefore, lenders run the risk of their intellectual property depreciating throughout the loan, which would make recovery more difficult.

    3. Legal and Regulatory Ambiguity

    The legal issues are brought to light by the Canara Bank v. N.G. Subbaraya Setty case. The Supreme Court demonstrated the limitations of conventional legal interpretations when it decided against the bank acquiring a trademark because it was not covered by the initial security agreement. Furthermore, enforcement is complicated by regulatory inconsistencies between the SARFAESI Act and the Banking Regulation Act.

    4. Weak IP Enforcement and Market for Resale

    IP rights enforcement in India can be expensive and time-consuming. Additionally, there is a lack of development in the IP asset secondary market. The difficulty of making money out of intellectual property in default situations is shown by SBI’s unsuccessful Kingfisher trademark auction.

    5. Monitoring and Maintenance

    IP used as collateral must be routinely refreshed and safeguarded against infringement by lenders. The operational complexity and danger are increased by this continuing obligation.

    CASE STUDIES FROM INDIA AND ABROAD

    1. Kingfisher Airlines Trademark (India)

    Following the airline’s credit default, the State Bank of India attempted to auction off the “Kingfisher” trademark. Some IP assets are illiquid, as evidenced by the auction’s failure despite a well-known brand because of overvaluation and poor market perception.

    2. Canara Bank v. N.G. Subbaraya Setty (India)

    This lawsuit revealed legal loopholes about IP assignment. The court emphasized the necessity for strong contractual clarity by ruling that banks could not take over and use trademarks after default if they were not initially included as security in the arrangement.

    3. Cambridge Display Technology (UK)

    Using its portfolio of polymer OLED patents, CDT was able to raise $15 million from UK banks. The outcome of this case shows how, with the right valuation and legal frameworks in place, strategic intellectual property can draw in investors.

    4. Masai Group International (Singapore)

    The business raised money from an international bank after declaring bankruptcy by using its proprietary Masai Barefoot Technology as collateral. This acquisition demonstrates how, with the correct framework, troubled businesses may still unlock IP value.

    THE ROAD AHEAD: MAKING IT WORK IN INDIA

    India is on the verge of an economic revolution due to the introduction of intellectual property in the financial system. It has enormous potential to become a leader in IP-backed finance as one of the biggest start-up ecosystems in the world. However, several improvements are necessary for this to become widely accepted:

    • Standardized Valuation Guidelines: To create uniform frameworks appropriate for Indian lenders, regulatory bodies must interact with specialists in IP valuation.
    • Dedicated IP Financing Institutions: India requires organizations or divisions within banks that are exclusively focused on IP-backed lending, much like venture capital firms.
    • Judicial Clarity: Conflicting decisions can be avoided by using clear and current legal interpretations, such as harmonizing the SARFAESI Act with the Banking Regulation Act.
    • Marketplaces for IP Exchange: The creation of IP auction platforms or exchanges may contribute to the IP market’s liquidity, allowing lenders to reclaim assets after a default.
    • Awareness and Training: Banks need to spend money on employing and educating professionals in market intelligence, legal enforcement, and intellectual property valuation.

    TMWala can be a central player in this transformation by acting as a one-stop solution for IP discovery, valuation, protection, and commercialization giving confidence to both innovators and financiers.

    CONCLUSION

    In order to spur innovation and expansion, the Indian economy is depending more and more on intangible assets. Practical difficulties still exist even if IP-backed funding has a legal basis and policy goal. Financial institutions, regulators, valuation specialists, and legal experts must work together to bridge the gap between theoretical promise and practical implementation.
    With the correct changes, India can establish a robust ecosystem for IP funding that will help it become a global leader in IP commercialization while simultaneously bolstering its aspirational start-up culture. India can open up new funding channels and create a resilient, knowledge-driven economy by acknowledging intellectual property as an economic asset.

    With the right partners like TMWala assisting in IP due diligence, strategic valuation, and asset maintenance, India has the potential to lead globally in IP-driven finance while energizing its vibrant start-up ecosystem. Recognizing IP as an economic asset will open new funding channels and pave the way for a resilient, knowledge-powered economy.