List of Government Loan Schemes For Small Business

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Please, Make First Anchor MSME Loan

India has the third-largest startup ecosystem where the micro, small and medium industries are one of the emerging sectors for the growth of the country. It contributes about 40% of the total of the GDP. Recently, there has been a boom in new startups with about 1300 new startups coming last year. The government has shown interest in the growth prospects of the MSME sector by introducing attractive business loan schemes. The process of availing these business loans is quick and available with flexible repayment options.

Here are some business loan schemes provided by the government.

MSME Business Loans in 59 Minutes:

This MSME loan is available for both new and existing businesses. The micro and small businesses can get financial assistance up to 1 crore for the growth of their business. As the name suggests the MSME loans under this scheme can be approved in 59 minutes. However, it takes 8 to 12 days to complete the process of sanctioning these loans. The rate of interest on these loans is lower than the business loans and is dependent on the nature of business and credit ratings.

To get a loan, you would require the following documents:

  • GST verifications
  • Income Tax verifications
  • Bank account statements for the last 6-months
  • Ownership documentation
  • KYC details

Mudra Loans- 

These MSME loans are provided by Micro Units Development and refinance agency to non-rural and non-corporate sectors. The loan can be availed by shopkeepers, artisans, vegetable vendors, machine operators and repair shops, etc. Businesses can avail loans up to Rs. 10 Lakh through the public sector banks, private sector banks, cooperative societies, small banks, scheduled commercial banks and rural banks. The three Mudra loan products offered by the government are as follows:

  • Shishu: The micro and small business can avail the capital of Rs. 50,000 to purchase raw materials and equipment.
  • Kishor: To expand the business scale, the micro-units can avail a loan up to Rs. 5 Lakhs.
  • Tarun: Business can avail Tarun mudra loans up to Rs. 10 Lakhs for the smooth running of the business.

Credit Guarantee Fund Scheme for Micro and Small Enterprises:

Under the Credit Guarantee Fund scheme, new and existing enterprises can avail collateral-free credit for the micro and small enterprise. They can avail MSME loans up to 10 Lakhs from public and private sector banks. However, to get loans between the range of 10 Lakhs to 1 crore, they need to provide primary security or mortgage of land and building associated with the building. The tenure of business loans under this scheme ranges between 5 years and seven years and can be extended up to 11 years in some of the cases.

National Small Industries Corporation Subsidy: 

The government provides raw material and marketing assistance to the new and existing MSME units. The financial aid is provided with both indigenous and imported raw materials. Under the marketing Assistance, they can avail MSME loans to increase the market value of their goods and compete with other businesses in the market.

Credit Link Capital Subsidy Scheme for Technology Upgradation:

 The micro, small and medium business units can get MSME loans for the up-gradation of their technology in the different processes of business such as marketing and manufacturing of goods. They can get a capital subsidy of 15% to reduce the cost of production. The maximum cap for availing MSME loans for technology up-gradation is 15 lakhs. This loan can be availed by Sole proprietorships, partnership firms, cooperative, private and public limited companies.

Other government schemes for a business loan that can be availed by both new and existing MSMEs are Standup India, Sustainable Finance Scheme, Coir Udyami Yojana and Sustainable Finance Scheme.

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