The Udyog Aadhaar or Aadhaar for business is a registration certificate with a unique 12 digit identification number which is similar to Aadhaar, but only for businesses and enterprises. It is provided by the Ministry of Micro, Small and Medium Enterprises or the MSME and was introduced in 2015. The purpose of this system is to promote the growth of all registered small and medium businesses in the nation.
There are many benefits of Udyog Aadhaar that can be availed by the business owners such as:
- Reduced costs of setting up business patents
- Tax exemptions and rebates
- Concession in utility payments (e.g.- electricity bills)
- Access to several exclusive government subsidies.
Perhaps, the biggest and most crucial Udyog Aadhaar benefit is that it provides easier bank loans for registered small and medium businesses reducing time and effort of the owners. The purpose of the loan is to provide business capital to the MSME industry which is a significant contributor in the GDP of our country.
Benefits of Udyog Aadhaar Business Loan
Loans without collateral
A common issue for small and relatively new businesses while getting a loan is paying the security or collateral fee. This is where the Udyog Aadhaar comes to the aid of MSMEs as it makes it easier to avail a business loan without a collateral fee. This is a major advantage for startups and other small and medium enterprises with fewer assets.
Less interest rates
In order to support and promote the growth of small and medium enterprises, the government has provided the Udyog Aadhaar loans at subsidized business loan interest rates. The interest rates on many Udyog Aadhaar loans can be approximately 1.5% lower than the interest rates on regular loans. This is an important Udyog Aadhar benefit that can be availed by MSMEs by registering for the Udyog Aadhaar certificate.
Catering to several Industries
The purpose of acquiring a business loan can differ from one industry to another and therefore, the Udyog Aadhaar loan caters to many different industries and provides loans based on the needs of these industries. These facilities can be availed by checking the business loan eligibility by the business owners before applying for the loan.
Easy application process
The process of applying for a loan can often be tedious and require many steps. However, the Central and State governments have come up with a much easier and quicker process to secure a loan with the help of Udyog Aadhaar. There are fewer steps and documentation involved that depend on the requirement of the lender. In addition, there are both online and offline facilities available to apply for a loan using the Udyog Aadhaar as per the convenience of the business owner.
Hence, registering for the Udyog Aadhaar certificate can be useful for small and medium business enterprises to get access to bank loans at easier terms and conditions. It is a way for the government to encourage and support the spirit of entrepreneurship, employment generation and self-reliance in the country.