Udyam Registration Certificate & Its Benefits

In the modern era, as the business landscape is evolving every day, it is paramount that you, as a business owner, keep yourself abreast with the latest government schemes and initiatives and take maximum advantage of them. This simple step could make a huge difference in keeping your business afloat in the competitive market and making profits.

 

One such initiative in India for the businesses that fall under the MSME (Micro, Small and Medium Enterprises) is the Udyam Registration. If your business falls under the MSME sector, and you are not sure what the Udyam registration initiative is, then this guide is just for you; read on!

 

What is Udyam Registration?

 

Udyam registration is a Government of India initiative to help, uplift, and empower small business enterprises (MSMEs). Earlier, this initiative was known as Udyog Aadhaar Registration, and this new scheme aims to simplify the process for MSMEs to register themselves under the MSMED (Micro, Small and Medium Enterprises Development) Act, 2006.

 

The new Udyam registration process is completely digital, replacing the traditional process that involves complex paperwork. Thus, it helps business owners easily register their enterprises and get officially recognised as MSMEs.

 

The term ‘Udyam’ literally translates to enterprise in English, and the Udyam registration process ensures that your business entity falls under the MSME sector. This registration applies to all micro, small and medium enterprises in the manufacturing and services business. Whether you own a start-up organisation, a small factory or a service provider, Udyam registration is necessary and a major boon for all.

 

Once you complete the registration process, you get a Udyam registration certificate, and you can avail the several benefits of a Udyam registered enterprise, which are as follows:

 

Access to subsidies

 

Once you obtain the Udyam registration certificate, your business can become eligible to avail a wide range of benefits, including subsidy schemes offered by the government of India. You also get other benefits like preferential treatment for government tenders, access to credit at lower interest rates, and access to several other services needed for your business growth and lower cost.

 

These perks can significantly reduce your business's overall operating cost and give you an edge over your competitors in the market.

 

Easy bank loans

 

Among the Udyam registration benefits, easy access to loans or credit is perhaps the most significant one. Many banks and financial organisations in India recognise MSMEs that have Udyam registration as authentic organisations.

 

This improves the credibility of your enterprise and increases the chances of getting the loan application approved. In addition, you can get the loan without providing any collateral to the lender. This means you need not pledge any asset as a security against the amount you borrow and face the risk of losing it.

 

Many MSMEs fail to get the loan they need for their business because of their inability to provide collateral, which is a mandatory requirement by all lenders. However, the Udyam registration eliminates this hurdle, and you can get the funds you want and grow your business.

 

Overdraft interest rate exemption

 

If you have registered your business as an MSME and got the Udyam registration certificate, you can benefit from a 1% interest exemption on the OD (overdraft) facility that you may avail yourself of from any lender. This benefit can help you fortify the financial position of your business during volatile market conditions or when you face a cash crunch and keep your business stable and competitive.

 

Protection against delayed payments

 

As a business owner, you may want to have a continuous cash flow in your business, right? And you can expect timely payments from your clients. However, if the client delays the payments, it can severely impact your cash flow.

 

This is where Udyam registration comes in handy. It facilitates timely payments and gives you a platform to lodge a complaint against delayed payments through the MSME Samadhaan Portal.

 

Easier Compliance

 

If your MSME is registered under Udyam, managing the compliances may become easier for you. Here, compliance refers to following the rules and regulations set by the government. It is the rulebook that all MSME owners must follow to ensure that they carry out the operation in a legitimate way.

 

 

Final Word

 

Udyam Registration is not just a formality but as a MSME owner it is a gateway to a world of amazing benefits that can help you grow your business. This government initiative can transform your business completely.

 

If you are looking for funding options for your MSME business, you can consider applying for an instant business loan with Udyog Plus. The 100% digital process from application to disbursement, affordable interest rate starting from 8% per annum, and minimal documentation ensure that you get the funds you need without any hassles.