The requirement for funds varies for each business. As per the type of business, the scale of operation, repayment capability, amount of fund required may change. Business entity faces a lot of difficulties to get the right kind of financial assistance for different activities. The Government of India offers different types of supporting packages to start a business. But many of us don’t know many details about the benefit plans provided by the government. Here are some popular and top schemes for business in India from which you can choose as per the requirement and eligibility.
1. MSME Loan in 59 Minutes
This scheme, also known as PSB Loan in 59 minutes, was launched by the Government of India. PSB Loans in 59 minutes is an online marketplace, which allows business individuals to apply for a business loan at an interest rate of 8.50% onwards. Under this scheme, MSMEs can get loan amounts from INR 1 lakh to INR 5 crores in less than 59 minutes. Which business/enterprise is eligible for this loan scheme?
- The business must be an existing one.
- The borrower should have Login ID of psbloasnin59minutes.com,
- GST, IT compliant
- Should have last 6 months’ bank statement.
- Income/Revenue statements
- Good Repayment Capacity of the Borrower
- Existing credit facilities
2. Pradhan Mantri MUDRA Yojana (PMMY)
MUDRA stands for Micro Units Development and Refinance Agency Ltd. MUDRA provides refinancing assistance to Banks and NBFCs for lending to Micro units. Units having loan requirements up to INR 10 lakhs can apply under the scheme of Pradhan Mantri MUDRA Yojana. Under PMMY, MUDRA divided the loan into three categories as ‘Shishu’, ‘Kishore’, and ‘Tarun’. Eligibility for MUDRA Yojana are:
- Applicant age limit of 18 years and a maximum of 65 years.
- Individuals, startup firms, business owners, entrepreneurs, SMEs, MSMEs are eligible.
- Traders, Artisans, Manufacturers, Retailers, etc. engaged only in trading, services, and manufacturing sectors are also eligible.
- If the applicant’s requirements in less than 10 lakh.
- Applicants with good repayment history, no bank dues.
- People belonging to SC/ST/OBC category.
- Applicants with no loan defaults with any financial institution.
3. Credit Guarantee Fund Scheme for Micro and Small Enterprises (CGFMSE)
The CGMSE was first launched in the year 2000 as a monetary support scheme. It offers collateral-free credit for both new and existing business units. The scheme provides working capital loans up to ₹ 10 lakhs. However, for all credit facilities above ₹ 10 lakhs and up to ₹ 1 crore, an asset created through the credit facility which is associated with the business unit is also considered as security when the loan amount exceeds ₹ 10 lakhs.
The Guarantee Cover is available to the extent of a maximum of 85% of the sanctioned amount of the credit facility. The fees charged by the trust funds are 1% per annum. The eligibility criteria covers already existing or newly established enterprises who are engaged in the following activities are eligible for this scheme,
- Manufacturing activity
- Retail trade;
- Educational institutions;
- Self-help groups;
- Training institutions.
- Service activity
4. National Small Industries Corporation (NSIC)
NSIC is an ISO-certified Indian Government enterprise under MSMEs. They provide subsidy for small businesses offers two kinds of financial benefits – Raw Material Assistance and Marketing Assistance. Under the marketing support, funds are given to SMEs for enhancing their competitiveness and the market value of their products and services. The NSIC is mainly centered on supporting small and medium enterprises that wish to improve their manufacturing quality and quantity. To encourage the growth of MSMEs, NSIC provides various schemes:
- Marketing Support Scheme – Marketing support is significant for the development of any business. To support such enterprises, NSIC devised schemes such as Consortia and Tender Marketing. NSIC forms Consortia of MSMEs working on behalf of MSMEs to reduce their burden, in Marketing Intelligence and Exhibitions, and Technology Fairs.
- Credit Support Scheme – Under this scheme, NSIC grants finance for raw material procurement, finance for marketing activities.
5. Credit Linked Capital Subsidy Scheme (CLCSS)
CLCSS is an innovative credit scheme launched by the Ministry of MSMEs. The primary objective is the technology updating of MSMEs, especially in rural and semi-urban areas. Under this scheme, businesses can opt for a 15% subsidy on investment in eligible machinery. However, there is a maximum cap on the subsidy restricting it to INR 1 crore. Sole proprietorships, partnership firms, co-operative, private, and public limited companies come under the ambit of this business loan scheme. The benefits to small scale industries are:
- It provides a 15% subsidy for purchasing plant, equipment, and machinery
- Help small-scale industries to enhance the latest and required technologies.
- It promotes the growth of rural industries which can now manufacture high-quality products.
The above mentioned schemes need detailed documentation and project report. With Finline, you can create project report/business plan for your bank loan.