India currently is home to more than 40 million registered and unregistered SMEs operating in various sectors including manufacturing, food processing, craft and IT. Well, SMEs are one of the key growth drivers of the country, contributing about 50% of the total GDP.
Government business loans are the initiative taken by the Government of India to support them by proving funds in the form of loan schemes. The schemes can be availed from any of the authorized financial institutions including banks and NBFCs. However, to avail of any of these schemes, the SMEs need to qualify for it by fulfilling the eligibility criteria.
Here is the Top Government Business Loan Scheme of 2021:
MSME Loan in 59 Minutes
This scheme is launched by the Government of India providing MSMEs quick business loans to expand the existing business.
The loan amount offered under this scheme is ₹ 1 lakh to a maximum of ₹ 5 crores in 59 minutes. The interest rate charged against this loan 8.50%*.
The eligibility factor to get approved for a 59 minutes MSME loan is:
- Revenue generated from the business
- Repayment capacity of the borrower/business
- Existing and previous credit history
Benefits you get from this scheme:
- The entire loan processing is super quick and completed with minimal documentation.
- This loan scheme is backed by Advanced Technology making it convenient for the business owner
- The loan comes at affordable rates which makes it pocket friendly for the borrowers.
MUDRA Loan under PMMY
The scheme has been formed to provide financial support to non-corporate, non-farm small/micro-enterprises of the country. The loan can be availed from authorized private and public sector banks, regional rural banks (RRBs), small finance banks, and corporate banks. One can apply online for a Mudra loan through the official website of MUDR.
Eligibility: Any non-corporate Small Business Segment comprising proprietorship/enterprise firms in rural and urban areas can apply for the Mudra loan. This includes:
- Small manufacturing units
- Fruits / vegetable vendors
- Truck operators
- Food-service units
- Repair shops
- Machine operators
- Small industries and businesses
- Food processors and others
- Shishu: Loans: Up to Rs. 50,000
- Kishor: Loans: From Rs. 50,000 and up to Rs. 5 lakh
- Tarun: Loans: From Rs. 5 lakh and up to Rs. 10 lakh
- Facilitate easy funding, with MUDRA Card.
- Provides working capital facility as a cash credit arrangement.
- This card is given to you like a debit card against your MUDRA loan account.
Credit guarantee fund government business loan scheme
CGTMSE is one of the best government business loan schemes available for MSMEs. The scheme was started 18 years ago and since its inception, it has been providing collateral-free loans for MSMEs. The loan can be availed from any authorized commercial bank and the regional rural bank. The loan is approved based on the eligibility of the Micro and Small Enterprises.
The scheme can provide a working capital loan of up to ₹ 10 lakh and has provisions for bigger sanctions as well for eligible enterprises. However, for that business owners are required to provide collateral in form of any of their assets as a guarantee.
The scheme is eligible for:
Eligible for this scheme,
1. Manufacturing activity
Retail trade; Educational institutions; Self-help groups; Training institutions.
2. Service activity, except
Credit Linked Capital Subsidy Scheme (CLCSS)
CLCSS is a credit scheme government business loan funds technological upgrades. The scheme is launched by the Ministry of MSMEs especially in rural and semi-urban areas. The scheme provides a 15% subsidy on investment in eligible machinery. However, the maximum cap on the subsidy restriction is up to ₹ 1 crore.
To be eligible for this scheme, a business owner needs to apply as a sole proprietorship business, partnership firm, and co-operative or private/public limited company.
Benefits to small scale industries that are:
- One can get a 15% subsidy for purchasing an eligible plant, equipment and machinery for small scale industries.
- Help small & medium industries to upgrade to the latest and required technologies which are required for their growth.
- It boosts the growth of small industries.
How to Register for the government business Loan Schemes?
- Go to the authorized bank’s official online portal associated with the scheme
- Register on the portal and apply from thereby providing the required information.
- Get verified through the One-Time Password (OTP) authentication.
- Agree to the terms and conditions of the Government loan scheme
- Enter your business and financial credentials and other information required
- Continue by filling in the forms and uploading the required documents and forms.
Eligibility Criteria Required
- Age of the applicant/business owner
- The loan amount which you have applied for
- Type of Business ( there are different scheme offering loans to different businesses)
- Credit Score ( both personal and business)
- Annual Turnover of the business
- Capital Invested in your business and its growth potential.
Well, there are several government business loan schemes available, but in terms to qualify for it you need to fulfil the eligibility criteria and provide appropriate documents. Availing of these schemes can reduce much of your financial stress and can take your business to the next level.