Sme Funding
Sme Funding
Sme Funding
STAGES OF SME FINANCING 1. Stage Of Self-financing 2. Stage Of Debt Financing 3. Stage Of Lease Financing 4.Stage Leading To Emergence Of Equity Financing 5. Stage Of Venture Capital Financing
Organisation needs funds for two purposes: 1. Fixed Capital Requirements (Block Capital)
FIXED CAPITAL
Fixed capital is the capital invested in fixed or long run assets. The amount of fixed capital needed, therefore, varies directly with the amount of fixed assets owned or used by the business. - B.O. Wheeler
WORKING CAPITAL
Circulating capital means current assets of a company that are changed in the ordinary course of business from one to another, as for example, from cash to inventories, inventories to receivable, receivable into cash. -Gerstenberg
2. Variable Working Capital (a) Seasonal working capital (b) Special working capital
10. Terms Of Purchase And Sale 11. Importance Of Labour 12. Production Policy 13. Cost Of Raw Materials 14. Regular Availability Of Raw Materials 15. Dividend Policy Of The Management 16. Expansion And Diversification 17. Degree Of Competition
5. issue of debentures 6. short term loans from financial institutions 7. self- financing 8. inter-corporate deposits (a) call deposits (b) three deposits (c) six month deposits 9. commercial paper 10. public deposits 11. dealer advances
8. State Financial Corporation (SFCs) 9. National Bank For Agriculture And Rural Development (NABARD) 10. Export Import Bank Of India (EXIM Bank) 11. Regional Rural Bank (RRBs) 12. National Industrial Development Corporation Ltd. (NIDC) 13. Khadi And Village Industrial Commission (KVIC) 14. Commercial Banks
VENTURE CAPITAL
Venture capital is an activity by which investors support entrepreneurial talent with finance and business skills to exploit capital gain -Bank of England
SEED CAPITAL
Seed capital initial capital used to start a business. Seed capital often comes from the company founders' personal assets or from friends and family. The amount of money is usually relatively small because the business is still in the idea or conceptual stage. Such a venture is generally at a pre-revenue stage and seed capital is needed for research & development, to cover initial operating expenses until a product or service can start generating revenue, and to attract the attention of venture capitalists.
(b)
(c)
The person should be minimum 7th standard pass and should be in the age group of 18 years to 50 years the educated unemployed must be a resident of the state continuously for 15 years. Two guarantors having fixed assets are required. the seed capital is disbursed through District Industries Centre (DIC)
for projects below Rs. 1 lakh, the seed capital available would be as follows: General category 15% General category but economically weak 20% Backward class but not economically weak 20% Backward class but economically weak 22.5%
2. 3.
Special Seed Capital Assistance Scheme by State Financial Corporation (SFCs) Seed Capital Assistance Scheme by IDBI Risk Capital Foundation Scheme by IFCI
TAX BENEFITS
The various tax benefits available to small scale industries are in the respect of the following : 1. Tax Holiday 2. Depreciation Allowance 3. Expenditure On Scientific Research Allowance 4. Investment Allowance 5. Rehabilitation Allowance 6. Amortisation Of Preliminary Expenses
7. Tax Concessions For Small Scale Industry In Rural Areas 8. Expenditure On Acquisition Of Patents And Copyrights 9. Exemption On Excise Duty 10. Profits From Business Of Publication Of Books 11. Tax Benefits For Amalgamation Of Sick Units 12. Income Tax Concession To Small Scale Industries Established In Backward Areas 13. MODVAT Scheme
5. Scheme for marketing organisations 6. Schemes for tourism related activities 7. equity-type assistance scheme (a) seed capital scheme (b) national equity fund scheme
The services rendered by SISI can be classified in the following categories: 1. Technical advisory services 2. Economic advisory services 3. Managerial and technical training services 4. Management consultancy services