Government Business Loan Scheme 2024: Top 7 Business Loan Schemes By Government

Government Business Loan Scheme:-

Whether you are bootstrapping a startup or expanding your existing firm, you will always require regular cash flow. This is where business loans or corporate loans come into play; a business loan may help you secure the financing you need for your firm. Given the recent increase in fintech in the country, many private lenders are willing to provide company loans, but the Indian government also provides several financing programs to business owners through its numerous organizations. Government organizations give loans to company owners at competitive interest rates, often without the need for collateral.

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Government Business Loan Scheme 2024

There are over 40 million registered and unregistered Micro, Small, and Medium Enterprises (MSMEs) in India. MSMEs fall into one of two categories: organized or disorganized. These MSMEs continue to be a key source of employment, accounting for around 40% of India’s total GDP. MSMEs address critical national challenges such as poverty, unemployment, income inequality, and regional imbalances. To help MSMEs improve their companies and economies, the government has implemented several initiatives that give loans to them. MSMEs’ company owners can acquire a loan through any of the schemes that best suit their needs.

Objective Of Government Business Loan

The Indian government has developed business credit programs that allow micro, small, and medium-sized companies (MSMEs) and other businesses to obtain money. Depending on their needs, entrepreneurs can select from many funding alternatives. Businesses have the choice of picking the best credit package for their requirements. The bulk of these programs are now available online, due to the Indian government’s improvements in digital technology. The fundamental purpose of government business loan programs is to help business owners pay for their continuing operations. They are specifically built to satisfy the needs of businesses.

Top 7 Government Loan For Business Scheme

Some of the top business loan by government are as follows:

MSME Loan Scheme
MUDRA Loan
Credit Guarantee Fund Scheme
National Small Industries Corporation Subsidy
SIDBI Loan
Credit Link Capital Subsidy Scheme
Udyogini

MSME Loan Scheme

The Government of India launched the MSME Business Loan Scheme to address the working capital requirements of MSME firms. The MSME initiative allows any new or existing firm to apply for loans of up to 1 crore Rs. While a loan application is approved or rejected within the first 59 minutes of submission, loan processing takes 8-12 days. The MSME Loan Scheme’s main advantage is that you may obtain a loan at an 8% ROI, making loan payments easier. Women entrepreneurs receive a 3% priority when applying for loans under the MSME Loan Scheme. Additionally, the loan approval procedure is often simpler for female company owners.

MUDRA Loan

The MUDRA loans are approved by the Micro-Units Development and Refinance Agency, an entity established by the Indian government to offer funds to micro-business units. The Micro Units Development and Refinance Agency (MUDRA) funding program provides small businesses and start-ups with low-cost borrowing. MUDRA loans are largely provided to micro or small businesses involved in manufacturing, trading, or providing services. MUDRA Loan applications are accepted by both public and private banks, cooperative societies, local banks, scheduled commercial banks, and rural regions. Commercial entities have three choices for applying to the MUDRA loan program. MUDRA loans fall into the following categories:

Category of Loan	Amount
Shishu Loans	Up to Rs. 50,000
Kishor Loans	50,000 to 5,00,000
Tarun Loans	5,00,000 to 10,00,000

MUDRA Loan Eligibility Criteria

This program allows any company to apply for a loan, including proprietary enterprises, partnership firms, private limited companies, public companies, and other legal organizations.

Credit Guarantee Fund Scheme

The Indian government has created a Credit Guarantee Scheme to provide finance for MSME firms through unsecured loans. The program may give loans to both new and established enterprises. To carry out the CGFMSE program, the Ministry of MSMEs and Small Industries established the Credit Guarantee Fund Trust. This scheme may make working capital loans of up to 200 lakhs Rs accessible, with qualifying women company owners given precedence.

Eligibility Criteria

Manufacturing-related entities include merchants, educational institutions, self-help organizations, and training facilities. Additionally, enterprises in the service industry can apply for assistance through this loan program.

National Small Industries Corporation Subsidy

The NSIC is an ISO-certified government enterprise that belongs to the MSMEs category. One of its primary objectives is to encourage the growth of MSMEs across the country by providing funding, technology, marketing, and other services. The advantage of this program is that it provides small firms with free access to bid possibilities, and MSMEs are not required to pay security deposits to use the program’s financial aid alternatives. The NSIC has created two programs to stimulate the growth of MSMEs, which are as follows:

Marketing Support Scheme: The Marketing Support Scheme helps any firm thrive by devising strategies such as Consortia and Tender Marketing. A program like this is necessary since MSMEs require aid to expand in today’s competitive market.
Credit Support Scheme: The NSIC provides funding to MSMEs through bank syndication for raw material procurement, marketing, and financing.

SIDBI Loan

SIDBI, or the Small Industries Development Bank of India, was created in 1990 to satisfy the finance needs of small and medium-sized enterprises. SIDBI provides indirect lending programs to NBFCs (Non-Banking Financial Companies) and SFBs (Small Finance Banks) as well as direct credit programs to MSMEs. The loan duration might be up to 10 years, and the loan amount can vary from 10 lakhs to 25 crores. You may get loans of up to 1 crore Rs without putting up any collateral.

MSMEs can apply for loans through the bank’s several lending programs, including SIDBI Lending for Purchase of Equipment for Enterprise Development (SPEED), SIDBI Make in India Soft Loan Fund for MSME (SMILE), Smile Equipment Finance (SEF), and others. Each loan plan includes a separate loan term, loan amount, and eligibility criteria. Because the number of MSMEs in India is steadily expanding, several lending institutions now provide specialized loan packages to them. You may apply for an SME loan for your company at Bajaj Markets, which offers reasonable interest rates. The Bajaj Markets app allows you to easily apply for SME loans and locate pre-approved deals.

Credit Link Capital Subsidy Scheme

By sponsoring technology innovation, this initiative allows small firms to improve their procedures. Technological innovation may have an impact on all of the organization’s activities, including manufacturing, marketing, and supply chain management. The government anticipates that the CLCSS system would reduce the cost of manufacturing goods and services for small and medium-sized firms, allowing them to maintain pricing competition in both local and international markets. The program is overseen by the Ministry of Small-Scale Industries. The CLCSS offers a 15% upfront capital subsidy to qualifying firms. However, the maximum amount available as a subsidy under the scheme is 15 lakhs Rs. This business funding program is available to sole proprietorships, partnerships, co-operatives, private limited corporations, and public limited companies.

Udyogini Scheme for Women

Udyogini, which means “women empowerment,” is a program that aims to empower Indian women. The Women Development Corporation, on behalf of the Indian government, has introduced the Udyogini Scheme for Women Entrepreneurs. This initiative provides funding to help women gain the money they need to start a business. Under this scheme, loans are only available up to 15,00,000 Rs. To be eligible for this program, a woman entrepreneur must be between the ages of 18 and 55, with an annual income of no more than 15,00,00 Rs.

Women who are physically handicapped or bereaved have no income limits. There are no processing fees or collateral requirements for loans secured under this arrangement. To be eligible for the loan, women must present passport-sized pictures, birth certificates, Poverty Line Cards, Aadhar Cards, Caste Certificates, passbooks or bank accounts, ration cards, and proof of income. Qualified women can apply for financing for the 88 various types of businesses indicated.

Government Business Loan Scheme 2024: Top 7 Business Loan Schemes By Government