Startup culture is always on the rise in India. These days, young entrepreneurs are starting companies with new ideas. However, for a company to survive, ideas and hard work aren’t enough; it also needs finances. That is why startups need funding and loans. In this regard, Udyam Registration is important.
In this article, we will learn why Udyam Registration is necessary for startups and how it allows them to get funding and loans.
What is Udyam Registration?
Udyam Registration is a scheme initiated by the Government of India that gives an official identity to small, medium, and micro enterprises (MSMEs). Upon registration, the company gets a Udyam Registration Number (URN) and a certificate.
This certificate is like your business’s identity card.
Why is Udyam Registration necessary for startups?
Startups are typically new and are most in need of finance. Banks and investors believe in startups only if they possess a government-recognized certification.
The advantages of Udyam registration for startups are as follows:
- Government-recognized identity
- Facilitated access to loans from banks and NBFCs
- Higher investor trust
- Chance to avail of government schemes
- Subsidies and tax benefits
The Role of Udyam Registration in Funding and Loans
Easy Business Loans
Once the Udyam registration is done, startups are able to receive collateral-free loans from banks with ease. This is a facility extended by the government to MSMEs so that small businesses can flourish.
Interest Rate Discounts
MSME-registered startups get loans at a lower interest rate than normal businesses. This cuts down their cost a great deal.
Access to Government Schemes
Startups that are registered under Udyam are eligible for schemes like the Prime Minister’s Employment Generation Programme (PMEGP) and the Credit Guarantee Fund Trust (CGTMSE). These schemes offer direct funding and subsidies.
Investor Trust
Once a startup is registered, it becomes credible to investors. They believe that the company is legally established and is secure to invest in.
Tender and Government Project Participation
With the registration of Udyam, startups are eligible to bid on different government projects and tenders. This gives them access to more opportunities and indirect funding.
Real Benefits for Startups – An Example
Let’s say a young entrepreneur has started a tech-based startup. They initially have funding issues. After they get the Udyam registration:
- Banks agree to lend them money at reduced interest rates.
- Investors start considering investing in their firm.
- It is subsidized by the government and benefits from incentive programs.
- A mere step of this size can change the financial health of its whole business.
How to Register on the Udyam Registration Portal?
Online registration is easy for startups. The procedure is extremely straightforward:
- Go to the official Udyam Registration website.
- Provide your Aadhaar number and PAN card information.
- Provide the name, address, and other details required.
- Apply for OTP verification.
- After successful registration, you will get a Udyam registration Certificate online.
You Can Apply for Update Udyam Certificate Through Udyam Portal
Conclusion
The greatest challenge facing startups is securing loans and funding. Without funds, no startup can survive. In such a case, Enterprise Registration becomes a mighty pillar.
Not only does it open up the entry to government schemes, but it also makes access to bank loans, investor faith, and subsidies easy. If you are a startup owner or have plans to start one, ensure that you register an enterprise beforehand.
Udyam registration is not merely a procedure but the very basis on which your startup can be catapulted to new heights.
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