Government supportive funding and loan for small business //

As a continuation article How to search for and get startup funding? , I am about to elaborate & discuss in detail the five types of government loans for small business in India.
5 government loans for small business in India
Here are the top five government loan schemes offered by Government of India (here after mentioned as GoI) for small businesses:

1.   The Credit Guarantee Fund scheme.
2.   Small business loans from website (psbloansin59minutes)
3.   Micro Units Development and Refinance Agency (MUDRA).
4.   Credit Link Capital Subsidy scheme for technology upgradation (CLCSS).
5.   Stand-Up India scheme (cast oriented).

Whether you’re just starting a business or need funds to grow, consider one of these loans.

1. The Credit Guarantee Fund scheme (

Small business faces two major hurdles while availing business loans
A.       Non-availability of adequate credit
B.       Inability to provide collateral security for the loan
The Credit Guarantee Fund Scheme for Micro and Small Enterprises was launched by the GoI in the year 2000 to address both of the above-mentioned issues.
This scheme is good for small scale business as they don’t require properties document as security. Under this scheme, small businesses are eligible for both working capital and term loans of up to Rs. 1 crore. The scheme extends collateral-free credit to the small and micro businesses which has few employees.
The business loans under this scheme are financed by different public and private sector banks. The scheme covers both existing as well as new enterprises.
2. Small business loans from website (psbloansin59minutes):
In 2018, Government of India enabled a website that allows micro, small and medium enterprises (MSME) to get approval of loans in only 59 minutes.
It generally takes eight to 10 working days from the day of submission of the required documents to receive the loan fund.
This GoI initiative saves small businesses from the:
A.       Lengthy approval processes of banks
B.       Complicated documentation
C.       Frequent visits to lenders’ offices
There is no mandatory requirement for any collateral.
3. Micro Units Development and Refinance Agency (MUDRA):
MUDRA is a non-banking financial company that supports the growth of small and micro businesses in India.
This method is useful for traders, for purchasing equipment or vehicle. MUDRA loans are structured under the name of ‘Shishu’, ‘Kishor’ and ‘Tarun’ to signify the stage of growth and funding needs of the borrower. Loans range from Rs. 50,000 and up to Rs. 10 lakhs.
MUDRA funds banks and other institutions that provide loans to small businesses. While it doesn’t lend directly, it encourages other lenders to provide loans to small businesses by the way of refinancing.

4. Credit Link Capital Subsidy scheme for technology upgradation (CLCSS)

This scheme is governed by the Ministry of Small Scale Industries. CLCSS enables technology up gradation through up-front subsidies of 15% to eligible businesses.
Businesses need technological upgrading for:
A.       Improved efficiency
B.       Better quality of the product
C.       Improving environmental conditions (including working & surrounding environment)
Loans are granted in cases where the new technology is a very important thing to improve productivity as compared to the present technology. By keeping in mind that it is worthy to invest on.
The eligible plant and machinery can avail a subsidy of a maximum of Rs. 15 lakhs to 1 Crore. The eligible beneficiaries under the scheme include sole proprietors, partnerships, cooperatives, as well as private and public limited companies.
5. Stand-Up India scheme (cast oriented):

Through Stand Up India scheme, GoI aims to sanction loan to the one who is eligible under this cast category.
A.    Scheduled Caste (SC) or Scheduled Tribe (ST) borrower per bank branch
B.    Woman borrower per bank branch
In the case of non-individual enterprises, at least 51% of the shareholding and controlling stake should be held by either an SC/ST or woman entrepreneur.
The purpose of this loan is to support green-field projects in the manufacturing, trading or service sectors. You may apply for the loan directly on the Stand Up India portal, through any branch of Scheduled Commercial Banks or through your lead district manager.

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