loan
Government Schemes Loan
Government Business Loan Schemes for Startups, Businesses & MSMEs
The Government of India offers various business loan schemes to provide financial assistance to individuals, startups, self-employed professionals, and MSMEs involved in trading, manufacturing, and services sectors. These schemes, available through banks and NBFCs, are tailored to meet different business needs and requirements. Below are the top 6 government loan schemes available for startups, businesses, and MSMEs.
1. Mudra Loan under PMMY
The Pradhan Mantri Mudra Yojana (PMMY) offers Mudra loans to non-corporate, non-farm small/micro-enterprises through various financial institutions.
Key Features:
- Collateral-free loans
- Loan amount up to Rs. 10 lakh
- Competitive interest rates with no processing fee
- Repayment tenure of 12 months to 5 years
- Special rates for women entrepreneurs
Eligibility: Applicants aged 18-65 years without past loan defaults. Available to small business units like shopkeepers, vendors, artisans, and more. The loan has three categories:
- Shishu (up to Rs. 50,000)
- Kishor (Rs. 50,001 – Rs. 5,00,000)
- Tarun (Rs. 5,00,001 – Rs. 10,00,000)
2. Stand Up India
Managed by SIDBI, this scheme provides loans ranging from Rs. 10 lakh to Rs. 1 crore to SC/ST individuals and women entrepreneurs. It covers trading, manufacturing, and service sectors.
Eligibility: Enterprises must have at least 51% shareholding by SC/ST or women.
Interest Rate & Features: Banks’ base rate + 3% + Tenor Premium; covers up to 85% of the project cost.
3. PSB Loans in 59 Minutes
A digital initiative providing loans up to Rs. 5 crore within 59 minutes for startups and MSMEs. The scheme offers collateral-free loans with interest rates starting from 8.50% p.a.
4. National Small Industries Corporation (NSIC) Subsidy
This scheme offers marketing and raw material assistance to small businesses, providing benefits like cost-free tenders and no security deposit for finances.
5. MSME Loan Schemes from SIDBI
SIDBI offers various schemes like SMILE, SANGAM, and more to support MSMEs with soft loans, equipment purchases, and working capital.
6. CGTMSE
The Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) offers guarantee cover up to 75% of the credit facility. It’s available to new and existing MSMEs in manufacturing or service sectors, excluding retail trade and certain other categories.
Eligibility: Includes MSMEs, excluding retail trade and educational institutions.
Features: Provides term loans and working capital loans up to Rs. 5 crore with guarantee cover for loans up to Rs. 500 lakh.
Steps to Apply for Govt. Loan Schemes:
- Visit the eligible bank’s official website.
- Register and log in through OTP.
- Agree to the Terms & Conditions.
- Enter financial and other required information.
- Complete forms and upload necessary documents.
Eligibility Factors & Required Documents:
Eligibility Factors: Applicant’s age, repayment history, business type, credit score, annual turnover, etc.
Required Documents: Filled application form, KYC documents, bank statements, business establishment certificate, proof of belonging to specific categories, and other documents as required by the lender.