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India’s 5 Most Popular Government Business Loans

Submitted by admin on August 15th, 2024

Running a successful business requires a consistent flow of money. Hence, both banks and the government of India offer financial support for businesses and fledgling startups. In this brief guide, let’s explore India’s 5 most popular government business loans that empower businesses.

PMMY or Pradhan Mantri MUDRA Yojana  

This government loan scheme mainly supports female entrepreneurs and trading and service-oriented businesses. These collateral-free loans enable women to embark on their entrepreneurial journeys. Additionally, the interest rate is determined by an enterprise’s size. Hence, benefiting from lower interest rates is fairly common via this scheme.

MSME loans 

The MSME loan scheme provides working capital of up to ₹ 1 crore at 8% interest rate to MSMEs or micro, small, and medium enterprises in under an hour. The quick and easy loan application process is its most unique and beneficial feature.

Additionally, under this loan scheme, female entrepreneurs enjoy a 3% reservation. Hence, women entrepreneurs can avail loans faster and more easily than their male counterparts.

NSIC or National Small Industries Corporation

For entrepreneurs seeking monetary assistance in the finance, technology, and marketing industries, the NSIC provides two advantageous schemes.

The Credit Support System provides assistance in sourcing raw materials, meeting financial needs, and financing all marketing activities.

Similarly, the Marketing Support Scheme offers different support options like Tender Marketing and as Consortia schemes to enable businesses to promote their offerings, increase their market reach, and consequently their market share and profit.

SIDBI loans 

SIDBI or Small Industries Development Bank of India provide both indirect and direct loans via SFBs or Small Finance Banks and NBFCs or Non-Banking Financial Companies.

SIDBI, as is apparent by its name, lends primarily to MSMEs i.e. micro, small, and medium enterprises that need funds to conduct their business.

Let’s say, Rakesh requires a loan of ₹ 50,000 as he plans on expanding his manufacturing unit operating on a small scale. In such cases, SIDBI can provide small business owners with collateral-free financial aid.

Credit-linked Capital Subsidy Scheme 

CLCSS is short for Credit-Linked Capital Subsidy Scheme. It aims to offer monetary aid to businesses that are focused on advancing technologies in the fields of manufacturing, supply chain management, and marketing. Thanks to this scheme, eligible businesses are able to avail a direct 15% of capital subsidy.

More Government Loan Schemes Available for Businesses

Apart from the 5 aforementioned business loans, there are various other schemes that business owners can use to their business’s advantage and advancement. Some of these schemes are a loan scheme known as Stand Up India, Credit Guarantee Fund Scheme, Prime Ministers’ Employment Generation Programme, NABARD loan schemes, etc.

Each of these loan schemes are designed specifically to cater to and fulfil different business needs.

Conclusion

Without a constant flow of funding, businesses remain unable to advance according to their plans and potential. Hence, in recent times, the Indian government has launched various loan schemes for new and existing startups.

If you need to avail any one of the aforementioned government loan schemes to scale your business, but are unsure how, login or sign up today to book a free consultation with Daily Finserv.