Government Loan Schemes for startups in india
• Loan schemes of the Indian government
• Indian government provides various types of loans such as CGTMSE loan, MUDRA loans, and MSMEs business loans.
• CGTMSE loan was launched by the Ministry of Micro & Small Enterprises that provides a credit guarantee of 50% – 85%.
• MUDRA loan is provided on commercial vehicles, a two-wheeler, plant & machinery, and office space management.
• MUDRA loan is divided into three parts namely Shishu loan, Kishore loan, and Tarun loan.
• National Small Industry Corporation facilitates MSMEs with specifically tailored schemes to build and improve competitiveness.
1: Benefits of Schemes by Indian Government
1. CGTMSE loan
• It refers to the Credit Guarantee Fund Trust for Micro & Small Enterprises.
• It was launched by the Ministry of Micro & Small Enterprises.
• All these schemes are launched with SIDBI (Small Industrial Development Bank of India).
• Credit guarantee is provided for 50% – 85%.
For example:
• The loan amount is Rs. 1 crore.
• The government will give a credit guarantee of Rs. 50 lakhs to Rs. 85 lakhs.
The 133 institutes that are eligible to give loans are as follows:
• Scheduled commercial banks
• Specified regional rural banks
MSMEs & SMEs are eligible to apply for these loans and schemes. They can apply by making proper business plans.
The firms will have to give their business plans along with the application to the bank. The bank will check all the details.
Once the details are checked, the application will be directly sent to the CGTMSE fund and if CGTMSE approves of the application, the bank will easily grant you the loan.
• The loan amount is up to Rs. 2 crores in this fund and the loan guarantee is in a 5-year block.
• The maximum guarantee is 50% for loans above Rs. 50 lakhs and less than 1 crore.
• The maximum guarantee is 85% for loans less than Rs. 5 lakhs.
• CGTMSE charges a minimal fee for the funds:
• 0.75% for up to Rs. 5 lakhs
• 0.85% for Rs. 5 lakhs to 1 crore
You have to reach out to your regional rural banks for CGTMSE funds and they will tell you the whole process of application.
2. MUDRA loans – Pradhan Mantri MUDRA Yojana
MUDRA refers to Micro Units Development & Refinance Agency.
The Types of loans that you can apply through this loan are as follows:
- Car loan
- Commercial vehicle loan
- Two-wheeler loan
- Working capital loan for business
- Loan for plant & machinery
- Loan for office space managemen
Institutions that provide loan are as follows:
- Public & private sector institutions
- Non-banking financial companies
- Regional rural banks
- Small finance banks
- Microfinance institutions (MFIs)
All non-farm enterprises are eligible for this loan
Loan amount is a maximum of Rs. 10 lakhs
How to apply for this loan?
- Visit murdra.org.in
- Submit the form with documents
- Check interest rates of different banks
- Provide documentation proofs
The loan is divided into three parts:
- Shishu loan – Up to Rs. 50,000
- Kishore loan – Rs. 50,000 to 5 lakhs
- Tarun loan – Rs. 5 lakhs to 10 lakhs
When you apply for the loan properly, you are issued MUDRA card, which you can use to withdraw the loan from your account.
3. Stand-up India
• Governed through SIDBI
• This loan category aims SC/ST category and women entrepreneurs.
• Scheduled commercial banks give loan under this scheme
Following people are eligible for this loan:
• Service/manufacturing/trading sectors
• Women & SC/ST applicants
• Organisations with 51% stake to women/SC/ST
• Minimum age: 18 years
These loans are granted for greenfield projects, i.e. a new set-up or start-up.
Visit standupmitra.in and fill in registration details for getting this loan.
The amount of this loan is between Rs. 10 lakhs to 1 crore and its repayment time is 7 years. It covers 75% of the project cost. This loan is provided at low-interest rates.
4. MSMEs business loans in less than 59 minutes
• Governed by CGTMSE
• Sanction letter granted in 59 minutes
• Loan disbursement time is 7 to 8 days
What are the requirements for this loan?
• Fill GST returns & income statements
• Declare your credit facility
• Declare capacity to return loan
Once you declare all this information, the bank will tell you how much loan it can give you, for how much time and at what interest rate.
Though this scheme is centralised, but banks can take the final call. If the bank finds out that you are a risky borrower, they have the authority to deny the loan or it can reduce the loan amount.
• How to apply for this loan?
• Visit psblaonsin59minutes.com
• Fill in the required details
• Select bank name & branch accordingly
• The amount of this loan is Rs. 1 lakh to 5 crores
• Term-loan to purchase machinery
• Working capital loan
• Low-interest rate, i.e., 8.5%
5. National Small Industry Corporationn – subsidy
• Facilitates MSMEs with specifically tailored schemes to build and improve competitiveness
• Strategic alliance with multiple banks
• Credit facilitation through other banks
• Interest rate – 10.5% to 12%
• Provide raw material assistance – indigenous or imported
• Credit support for financing for raw material
• Procure raw material schemes
Provide the following types of marketing assistance:
- Marketing support consocia
- Tender marketing
- Marketing intelligence
- Exhibition & technology fairs
- Credit rating schemes
- Performance for small industries technology support
- Priority in tendering
- EMD waive off
- Deposit waiver
Visit the NSIC website to know more about their schemes and policies and to get associated with them.
Conclusion:
• Read and understand the loan schemes properly before applying for a loan
• Visit the website to understand which loan is suitable for your business