Monday, September 26, 2022

Top 5 Business Loan Schemes Offered by the Government of India

The Government of India has started different policies and schemes for different types of businesses. These are based on the factors relating to the futuristic approach of various companies. When growing a business, finance is an aspect that is of utmost importance. Any additional financing that an entrepreneur can get will help the business grow. An entrepreneur can avail of loans from financial institutions, NBFCs, or look into schemes offered by the government. The choice depends on the needs and accessibility. In this post, we will look in detail at five Business Loans by the Government for different businesses.

Top 5 Business Loan Schemes by the Indian Government

MSME Loan Scheme

The MSME loan scheme has elementary eligibility criteria, which can be met in as little as 59 minutes. It requires the account statement for the past six months to determine whether the business is a good fit for the loan. The interest rate is 8.5%.

The loan amount can range between Rs. 10 lakh and Rs. 100 lakh and is estimated to cover 85% of the project cost. However, if the equity stake of the business owner exceeds 15%, the loan amount will be canceled.

To qualify, the borrower should contribute at least 10% of the project cost.

This scheme concerning business loans by the government also provides raw materials for MSME marketing activities. Those who apply should be aware of all the eligibility criteria and requirements of the scheme before deciding on the best option.

Pradhan Mantri MUDRA Yojana (PMMY)

The PMMY is a microloan scheme with a corpus of more than Rs 70,000 Cr. This loan scheme has several advantages and is beneficial to small businesses. The money is given to small entrepreneurs without collateral. This can allow these businesses to expand their operations and create jobs.

The best part is that this scheme concerning Business Loans by the Government is available to 58 million Indians, including women.

Credit Guarantee Fund Scheme (CGFMSE)

The CGFMSE is a government Business Loan scheme that offers collateral-free loans to the MSME sector. The CGTMSE is run by the Ministry of MSMEs and provides up to Two hundred lakhs in loans to eligible enterprises.

Women entrepreneurs can avail of a particular reservation of 3% in this scheme. The application process for the loan under this scheme is simplified and takes just eight days.

MUDRA Loan

Micro Units Development and Refinance Agency (MUDRA) is a newly established government agency that provides low-cost credit to small and micro businesses.

The MUDRA scheme allows small and micro business owners to apply for a loan through a commercial or public sector bank. These Business Loans are offered to companies registered as MSME (Micro Units Development and Refinance Agency) entities.

Three types of Mudra Business Loans are Shishu, Kishor, and Tarun:

  • The Shishu category includes loans up to Rs. 50,000.
  • Kishor loans are for businesses with an annual sales turnover of less than 10 million.
  • The Tarun category focuses on manufacturing, Trading, and services businesses.

Credit-Linked Capital Subsidy Scheme (CLCSS)

The Credit-Linked Capital Subsidy Scheme (CLCSS) is an Indian government initiative aimed at helping small businesses and MSMEs access financial resources and upgrade their technology.

The CLCSS applies to private and public limited companies and sole proprietorships. It is designed to help these organizations expand and flourish in rural and urban areas. The new initiative will provide up to Rs. 2,900 crore loans to eligible micro and small enterprises.

The CLCSS program has a three-year eligibility requirement. To qualify, the MSE should have been commercially operating for at least three years. CLCSS covers Khadi and Village Industries, Coir Sector, and Textiles.

The application process is entirely online, and the applicant must apply to a Primary Lending Institution (PLI). Once the PLI receives the application, it forwards it to the Office of DC (MSME).

The Bottom Line

To expand your business, you’ll need a steady stream of revenue. A Business Loan may assist you in obtaining the capital you need for the growth of your venture. In the event of a new company endeavor, consider the top 5 Business Loans by the Government in India as mentioned in this article. For specific business funding requirements, you can consider new-age lenders like Clix Capital, who can help you get an instant business loan online with minimum documentation and quicker approvals. 

 

 

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