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Business Loan by Government

India has the third number of startups in the world. Startup culture is flourishing in the country and to succeed in business; Entrepreneurs require money. Angel investors and venture capitalists typically provide these funds. However, it is not easy to get money every time you pitch. Due to the increasing number of startups in the county, the Indian government is doing its best to support and promote them. The government aims to provide easy credit to small and medium enterprises. The government provides loans to a startup in India to ensure that small businesses have the finance they need. If you are an entrepreneur, then you need to pay attention to this business loan for startups available to you. Most importantly, these loans do not have any collateral.

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Pradhan Mantri Mudra Yojana (PMMY)

Pradhan Mantri Mudra Yojana is a scheme launched by the Government of India, which provides loans up to Rs. 10 lakhs to non-corporate, non-agricultural small / micro enterprises. The scheme provides for people involved in non-agricultural activities to get loans up to Rs. 10 lakhs. The MUDRA loan scheme was proposed with the objective of involving businesspeople who are part of the NCSBS (Non-Corporate Small Business Sector) as well as ‘own account enterprises’ in the formal banking system and routines. Generally, NCSBS in India includes street vendors, small repair shop owners, small scale industries and traditional artisans.

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Stand Up India Scheme

The Stand-up India scheme provides government loans for trade between Rs. 10 lakh and Rs. 1 crore to at least one Scheduled Tribe or Scheduled Caste borrower for setting up a greenfield venture. It is also offered to at least one-woman borrower per bank branch to promote women entrepreneurship among scheduled castes and scheduled tribes. The loan term is 7 years.

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The Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE)

The Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) is a trust, launched on 30 August 2000 by the Ministry of Micro, Small and Medium Enterprises, Government of India and Small Industries Development Bank of India (SIDBI). The primary objective of the CGTMSE scheme is to provide loan guarantees to financial institutions providing credit to SMEs and MSMEs. CGTMSE aims to encourage entrepreneurs to take collateral-free loans to start businesses without fear of repayment failure. In the event of a borrower being unable, the trust fund will reimburse the lending institution to a certain extent.

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SIDBI Make in India Soft Loan Fund for MSMEs

Powered by SIDBI, the fund provides weightage to enterprises for expansion, technology upgradation, modernization and other projects to increase business. It provides term loans to MSMEs. For the general category, the loan amount is 10% of the total project cost which is a maximum of Rs 10 lakhs and for a ST and SC, the loan amount is 15% of the cost subject to a maximum of Rs. 30 lakhs. The applicant should have a 51% stake in the enterprise.

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