Schemes to Raise Collateral Free Loans from Government
Funding is crucial for hiring technology, employing people and developing a foothold business strategy. Relying only on private funding ventures, many small business units and start-ups do not get any substantial freedom to grow. To lift up obligatory procedures and to bring out the ease in funding issues of entrepreneurs, the Indian government rolled out several schemes and offers for availing easy collateral-free loans from the government.
If you are an entrepreneur and seeking government aid to grow your business, look out for below schemes we have listed for you to rise easy funding for your business.
| Scheme | Launch Date | Eligibility | Governing Authority | Remarks | Time Period | Reference |
| 1. MSME Business loan in 59 minutes | September 2018 | For existing business units & startups recognized as MSMEs, compliant with GST, Income tax, holding business fund/bank account statements and other documents as prescribed by lending institutions. | Small Industries Development Bank of India (SIDBI) | The initiative aims at bringing ease in raising collateral-free loans with automated options.
Business loans ranging from Rs 1 lakh to even Rs 1 crore shall be provided.
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For an Agreed Tenure | www.psbloans
n59minutes.com |
| 2. Credit Guarantee Scheme (CGS) | August 2000 | For existing and new business entities registered as MSMEs engaged in manufacturing or service activities (excluding education and training institutes, retail businesses, Self-help groups, etc.) | Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) | The initiative aims at funding the MSME sector with term loans & working capital funds up to Rs 2 crore. | For term loan – agreed on tenure
For working capital funds – Up to 5 years
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www.cgtmse.in/About_us.aspx |
| 3. SIDBI Make in India Soft Loan Fund for MSMEs (SMILE) | August 2015 | For new enterprises engaged in manufacturing or service sector.
Shall also be provided to existing enterprises for expansion, technological up-gradation, and modernization of their business unit. |
Small Industries Development Bank of India (SIDBI) | The initiative aims at providing 10% of the project cost as loan up to a maximum of Rs 20 lakhs;
Up to Rs 30 lakh for entities managed by SCs/STs/Disable person & women entrepreneurs
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It can be availed for an agreed tenure or for a maximum period of 10 years. | https://www.sidbi.in/en/products
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| 4. Pradhan Mantri Mudra Yojana (PMMY) | April 2015 | It can be availed by NCBS (Non-corporate small business segments) including small shopkeepers, food &vegetable sellers, machine operators, artisans, repairs shops or any other individuals engaged in the manufacturing or service sector. | Micro Units Development and Refinance Agency Ltd (MUDRA) | The initiative aims at supporting banks and other microfinance agencies to lend to micro-business units with requirements up to Rs 10 lakh.
Loans can opt-in form of : > Shishu: Loans up to INR 50,000 > Kishor: Loans above INR 50,000 and up to INR 5 Lakh > Tarun: Loans above INR 5 Lakh and up to INR 10 Lakh
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For an Agreed tenure | https://www.mudra.org.in/Offerings
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| 5.Stand-up India | April 2016 | Can be availed by :- Individuals being SC/ST or women entrepreneurs or enterprises holding about 51% ownership of individuals from SC/STs or women.
– Ventures engaged in the manufacturing or service sector. |
Small Industries Development Bank of India (SIDBI) | The initiative aims at providing composite loans to members being SC/STs/women entrepreneurs from Rs 10 lakh to Rs 1 crore. | For a maximum repayment period of 7 years | https://www.standupmitra.in/
Home/SUISchemes
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| 6. Bank Credit Facilitation Scheme | For entities registered and recognized as MSMEs | National Small Industries Corporation (NSIC) | The scheme aims at providing credit benefits to all entities registered as MSMEs with signing MOU with Nationalised and Private sector banks. | For a maximum repayment period of 5 to 7 years, while in some exceptional cases up to 11 years | http://www.nsic.co.in/
Schemes/Credit- Facilitation-Through -Bank.aspx
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| 7. Coir Udyami Yojana | December 2015 | For all coir processing MSME startups registered with the Coir Board under the Coir Industry (Registration) Rules, 2008. To finance up to Rs 10 lakh as project cost and working capital up to 25% of the project cost. | Coir Board | The initiative aims at supporting the establishment of coil units. | For a maximum of 7 years or for an agreed tenure. | http://coirservices.gov.in/
Html_Files/Operational Guidelines_CUY.pdf
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Thinks to Know?
To avail of the above scheme, an applicant has to qualify the stated criteria and submit the necessary documents and declarations required by authorized banks/agencies. Backed by the government, the schemes also require confirmation of:
- Clean Personal & Business Background: To be checked before making any application for the above schemes, about the previous loan records, business registrations, minimum investment, business plans, the tenure of business, tax returns, etc.
- Ready financials and other legal documents: To be assured of a systematic record maintained of all profit and loss statements, bank statements, balance sheets, registration proofs, cash flows, etc to be placed before agencies providing a loan under the above schemes.
Is your business eligible to raise a collateral-free loan from the government?
Get a quick credit audit done from our financial expert and receive the most lucrative advisory on choosing the appropriate source of raising a loan for your business.
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