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MSME Certificate: Why Is It Important for Small Businesses?
As a small business owner, they often wear many hats, from managing operations to handling customer grievances and scaling the business as intended. Amidst these responsibilities, it is quite evident to overlook the key tools that can fuel their business ten times better. One such tool is the MSME certificate, full form for Micro, Small, and Medium Enterprises, validating their business and opening doors to a host of opportunities that can help them grow and scale.
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In India, MSME businesses are growing in every corner and contribute immensely to the economy, driving job creation, innovation, and local development. However, despite the significant role small business owners play, most businesses face challenges when it comes to accessing the resources needed for growth and development. This is where an MSME certification helps these businesses, offering numerous opportunities, such as government schemes, financial support and a boost in credibility.
What is an MSME Certificate?
An MSME certificate is an official recognition granted by the government to businesses that fulfil the prerequisites of a micro, small, or medium enterprise, such as investment in plant and machinery and annual turnover. The certificate serves as a legal identity for such businesses and unlocks a world of benefits that help them support their growth.
The MSME certificate establishes small businesses as part of the sector that drives economic growth in the country. By securing the MSME certificate online, small businesses gain access to government-backed schemes that offer financial assistance and promote long-term business sustainability.
Suggested Read: Step-by-Step Process to Apply for an MSME Loan for Startups
Benefits of an MSME Certificate
When an entrepreneur holds an MSME registration certificate, they gain a competitive edge in the market and a distinct advantage in securing financial resources, government support, and market visibility, all of which can take MSMEs to the next level. The key reasons to apply for an MSME certificate are mentioned below:
Unlocks Financial Opportunities
One of the biggest reasons why most MSME owners apply for an MSME certificate is the access it provides to MSME loans. If your business requires working capital, machinery upgrades, or funding for expansion, MSME loans offer lower interest rates, longer repayment terms, and less stringent documentation requirements. This makes the process of obtaining capital easier, helping you reinvest in the future of your business.
Priority Access to Government Tenders
Holding an MSME registration certificate gives your MSME priority when applying for government tenders or contracts. Most public sector organisations reserve a significant proportion of their projects for MSME-certified businesses, which can be a valuable opportunity to expand their network, grow operations, and increase market visibility.
Faster Payments with Legal Backing
The MSME Act ensures that enterprises backed by an MSME certificate receive payments from clients within 45 days of invoice generation. If the payments are delayed for more than the set limit, MSMEs have the legal right to pursue the outstanding amount. This protection is essential for maintaining a healthy cash flow, which is crucial for steady business growth.
Tax and Other Financial Benefits
The benefits of the MSME certificate also extend to significant tax advantages. Businesses holding an MSME certificate can access tax exemptions under various sections of the Income Tax Act, including deductions on certain business expenses. This helps businesses lower the financial burden, freeing up capital to reinvest in operations and growth initiatives.
Suggested Read: Documents Required For MSME Loans in India
How to Apply for an MSME Certificate?
The process for applying for an MSME certificate is straightforward. All an MSME owner needs to do is visit the Udyam Registration portal, where they can apply for an MSME certificate online. Here is how to get the MSME certificate online:
Visit the Udyam Registration Portal
The Government of India has simplified the entire process of registering for MSMEs by making it online. The first step is for the user to visit the official Udyam Registration website.
Suggested Read: Udyam Certificate Update: What You Must Know Before Editing
Fill in the Basic Details
Next, the user needs to provide their Aadhar number, PAN and other details about their business, such as investment size and turnover.
Verification and Submission
Ensure that the information fed to the portal is double-checked. The user must verify it and then submit the application.
Download the MSME Certificate
Once approved, the MSME certificate is made available for MSME owners to download and enjoy all the benefits associated with it.
In conclusion, obtaining an MSME certificate online is a strategic move for small businesses, offering them numerous benefits to grow and scale their business operations. An MSME certificate helps boost credibility and open doors to opportunities that may otherwise remain out of reach. To support your business growth further, Muthoot Finance offers tailor-made MSME loan options to help you expand, enhance operations and unlock your business’s full potential. With the right resources, you can take your MSME to new heights and contribute more significantly to the economy.
Apply for an MSME certificate today and take the first step toward accelerating your business growth and supporting your business expansion.
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