First Generation Individual Entrepreneur (Proprietorship) or Group of entrepreneurs (Partnership) are eligible, all partners in a partnership must be First Generation Entrepreneurs and must individually fulfill every eligibility criterion as prescribed in the NEEDS G.O. Applicant must be a resident of Tamil Nadu for not less than 3 years. A resident of any district in Tamil Nadu can start an enterprise in any other district (e.g., a resident of Kanyakumari District can start an enterprise in Chennai District and vice versa). Age limit: General Category, minimum 21 years, maximum 35 years. Special Category (Women, Transgender, BC, MBC, SC/ST, Minority, Ex-servicemen, Physically Challenged), maximum enhanced to 45 years. There is no family income ceiling. Only new units promoted by new First Generation Entrepreneurs are eligible, existing units cannot avail subsidy under NEEDS. Only one project can be submitted per entrepreneur.

Project Cost is the sum of Capital Expenditure and Margin Money for Working Capital. Capital Expenditure includes investment on Land, Building, and Plant & Machinery only. Land may be included at guideline value or market value prevailing as on the date of filing of loan application, whichever is lower. Cost of construction of buildings such as Office, Work-Shed, Workshop, Laboratory etc. may be included, subject to the condition that building cost shall not exceed 25% of the total project cost. Cost of leased or rental buildings shall NOT be included in the Project Cost. Project cost ranges from Rs.10 lakhs to Rs.500 lakhs for both manufacturing and service sectors.

Subsidy is 25% of the eligible components of project cost (Land + Building + Plant & Machinery), subject to a maximum of Rs.25 lakhs. Building cost must not exceed 25% of project cost. For service entities, equipment value must exceed 25% of the project cost. Promoter's contribution: 10% for General Category and 5% for Special Category. Bank loan assistance is up to 95% of project cost. Interest subvention of 3% is provided on interest paid throughout the repayment period. Only new machinery is eligible; however, second-hand machinery directly imported by the entrepreneur is also eligible. Project cannot be financed jointly from two different finance sources. Financing agencies include all Commercial Banks, Regional Rural Banks (RRB), SIDBI, TIIC, and TAICO.

It is a front-ended subsidy disbursed as follows: For project costs up to Rs.50 lakhs, 50% of eligible subsidy sanctioned on actual sanction of loan, and the remaining 50% released later after verifying the capital expenditure actually incurred by the beneficiary. For project costs above Rs.50 lakhs, 50% on actual sanction of loan, and 25% each in two subsequent stages after verifying capital expenditure actually incurred. Subsequent claims must be sent to GM, DIC / RJD, Chennai along with disbursement advices. EDP training of 1 month is mandatory and must be completed before claiming subsidy. The beneficiary must also deposit their own proportionate contribution of the project cost in their account before subsidy claim, and the bank must release the Term Loan. Entrepreneurs who have already completed equivalent EDP training sponsored by EDI, MSME-DI, or Banks before applying under NEEDS can avail exemption from the regular 1 month mandatory EDP training.

In partnership projects, EDP training needs to be attended by only one partner, who must be authorized by the other partners. Owner's contribution in partnerships is determined by the majority category of partners, for example, if a unit has two partners (one General, one Special Category), the contribution applicable is that of General Category. If a unit has three partners (one General, two Special Category), the contribution applicable is that of Special Category. Collateral security is decided as per Bank / TIIC guidelines. Subject to applicability, loans may also be covered under the Credit Guarantee Fund Trust Scheme for Micro and Small Enterprises (CGTMSE) of Government of India. Interest rate for enterprises financed by TIIC/Banks is as per the rate applicable to Micro & Small enterprises under banking norms.

Any individual above 18 years of age is eligible. Upper age limit is 35 years for General Category and 45 years for Special Category. Minimum educational qualification is Pass in VIII Standard. The applicant should be a resident of the place for not less than 3 years. The family income of the beneficiary along with the spouse should not exceed Rs.1,50,000/- per annum. Only individuals are eligible, partnership concerns are NOT eligible. Only new units can avail loan under UYEGP, existing units are not eligible. The beneficiary should not have availed loan or subsidy under any other State or Central Government scheme prior to applying under UYEGP.

The scheme is applicable to all areas in the State including Rural and Urban Areas. All economically viable Manufacturing, Service, and Business Activities are covered, excluding direct Agricultural operations like raising of crops etc. Maximum project cost: Rs.10 lakhs for Manufacturing Sector; Rs.3 lakhs for Service Sector; Rs.1 lakh for Business Sector. Cost of land and building is NOT included in the project cost. Project cost components include capital expenditure loan and one cycle of working capital.

Government subsidy is 25% of project cost with a maximum limit of Rs.1,25,000/-. Lock-in period for Government subsidy is 3 years. Promoter's contribution: 10% of project cost for General Category; 5% of project cost for Special Category (viz. Scheduled Caste, Scheduled Tribe, Backward Classes, Most Backward Classes, Minorities, Women, Ex-servicemen, Physically Challenged, Transgender). Bank loan is 90 to 95% of the project cost (including Government Subsidy of 25%), the bank should release 90 to 95% of the project cost as loan and then claim subsidy. Interest rate is as per the guidance of RBI. Repayment tenure is 5 years or as fixed by the bank in accordance with RBI guidance. Project cannot be financed jointly from two different sources.

As per RBI guidelines, project costs up to Rs.10 lakhs under UYEGP loans are free from Collateral Security. The project can also be covered under CGTMSE. EDP training is compulsory. Model project profile and project template are available on the website to guide entrepreneurs in preparation of the Project Report. The beneficiary shall submit the application along with project profile and quotation at the respective District Industries Centre. Financing banks covered under this scheme include all Nationalized Banks, Private Sector Banks, and Tamil Nadu Industrial Co-operative Bank.

The following documents must be submitted along with the application: Educational qualification proof (Transfer Certificate / School Record Sheet copy); Quotation and Project Report; Nativity proof (Copy of Ration Card or Nativity Certificate obtained from Revenue Department authority); Community Certificate; Ex-servicemen certificate (wherever applicable); Proof for Differently-Abled (wherever applicable). The implementing agencies at district level are the District Industries Centres (DICs) of the concerned districts. For Chennai District, the Office of the Regional Joint Director of Industries and Commerce is the implementing agency.