Need funds to start or expand your small business? Check out our guide to securing a government loan in India and advancing your venture.
Starting and running a small business requires hard work, dedication, and investment. One of the significant challenges that small business owners face is obtaining sufficient capital to grow and sustain their operations.
In India, the government provides various schemes and initiatives to support entrepreneurs and small business owners in securing loans to kickstart their businesses or expand their existing ventures. In this article, we will explore seven government schemes that offer loans for small businesses in India.
Business Loan from Government
1. MSME Loan in 59 min
The Ministry of Micro, Small and Medium Enterprises (MSME) launched the ‘MSME Loan in 59 Minutes’ initiative to provide quick and easy loans to small businesses. The process is entirely online, and it takes only 59 minutes to approve the loan amount. The scheme aims to streamline the loan approval process and make it more accessible for small business owners.
To apply for business loan under this scheme, the applicant must complete an online application form and submit the necessary documents. The documents required for this loan include a PAN card, GST registration, bank statement for the last six months, and income tax returns for the last two years.
2. Pradhan Mantri MUDRA Yojana
The Pradhan Mantri MUDRA Yojana is a government scheme providing loans to India’s micro-enterprises. MUDRA stands for Micro Units Development and Refinance Agency. Under this scheme, small business owners can avail of loans ranging from ₹ 50,000 to ₹ 10 lakhs without any collateral or security.
To apply for business loan under this scheme, the applicant must visit the nearest bank branch or NBFC (Non-Banking Financial Companies) that offer MUDRA loans. The loan amount can be used for various business purposes, such as working capital, purchasing equipment, and expanding the business.
3. Credit Guarantee Fund Scheme for Micro and Small Enterprise
The Credit Guarantee Fund Scheme for Micro and Small Enterprises (CGS) aims to provide collateral-free credit to micro and small enterprises in India. Under this scheme, the government provides a credit guarantee cover of up to 75% of the loan amount to the lending institutions, such as banks and NBFCs.
To avail of this loan, the applicant must visit a bank or NBFC part of the CGS scheme and submit the necessary documents. The loan amount can be used for various business purposes, such as working capital, purchasing equipment, and expanding the business.
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4. National Small Industries Corporation
The National Small Industries Corporation (NSIC) provides various schemes and initiatives to support small business owners in India. One of the significant schemes offered by NSIC is the Single Point Registration Scheme (SPRS). Under this scheme, small businesses can register with NSIC for various benefits, such as government tenders, marketing assistance, and credit support.
To register under this scheme, the applicant must visit the NSIC website and fill up the online application form. Once registered, small business owners can apply for loans and other financial assistance provided by NSIC.
5. Credit Link Capital Subsidy Scheme
The Credit Link Capital Subsidy Scheme (CLCSS) is a government scheme that provides a subsidy of 15% on the capital investment made by small businesses in plant and machinery. Under this scheme, small business owners can avail of a maximum subsidy of ₹ 15 lakhs.
To avail of this scheme, the applicant must visit a bank or NBFC part of the CLCSS scheme and submit the necessary documents. The loan amount can be used for purchasing plant and machinery and expanding the business.
6. National Bank For Agriculture and Rural Development Scheme
The National Bank for Agriculture and Rural Development (NABARD) provides various schemes and initiatives to support small business owners in rural areas in India. One of the significant schemes offered by NABARD is the Dairy Entrepreneurship Development Scheme (DEDS). Under this scheme, small business owners in the dairy sector can avail of loans to set up a dairy farm and purchase milking machines and other equipment required for milk processing.
To avail of this loan, the applicant must visit a bank or NBFC part of the DEDS scheme and submit the necessary documents. The loan amount can be used for various business purposes, such as working capital, purchasing equipment, and expanding the business.
7. Prime Minister’s Employment Generation Programme
The Prime Minister’s Employment Generation Programme (PMEGP) is a government scheme that aims to generate employment opportunities in India by promoting small businesses. Under this scheme, small business owners can avail of loans of up to ₹ 25 lakhs for setting up a new enterprise or expanding the existing one.
To avail of this loan, the applicant must visit a bank or NBFC part of the PMEGP scheme and submit the necessary documents. The loan amount can be used for various business purposes, such as working capital, purchasing equipment, and expanding the business.
Conclusion
Small business owners play a crucial role in the economic growth of India. The government provides various schemes and initiatives to support entrepreneurs and small business owners in securing loans to kickstart their businesses or expand their existing ventures. These schemes aim to streamline the loan approval process, provide collateral-free credit, and offer subsidies on capital investment made by small businesses.
The process of applying for these loan for small business From government is straightforward, and small business owners can avail of them by submitting the necessary documents to a bank or NBFC that is part of the scheme. With these government schemes, small business owners in India can afford financial assistance to grow and sustain their businesses.
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