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Top 5 Government Schemes for Business Loan in India

Business loan becomes necessary when you plan to start up your own venture. Many of us are unaware of the loan schemes our government has been offering for small businesses to assist them in jump starting their plan of action.

Given the importance of the MSME sector in India, the government provides numerous credit schemes to help both organised and unorganised businesses in the economy.

Top 5 Government Schemes for Business Loan in India.

These programmes provide much-needed financial assistance to small and medium-sized businesses, assisting with operations and driving growth at low Business Loan interest rates.

These are critical for easy access to capital, assisting in the conversion of profitable business ideas into profitable ventures.

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It is estimated that there are 633.9 lakh MSMEs in India. The Micro sector includes 630.5 lakh enterprises, accounting for over 99% of the country’s total number of MSMEs. Source – India’s MSME Sector – IBEF

1. MSME Loan Scheme in India

In India, the MSME loan scheme is a government initiative that provides financial assistance to small and medium-sized businesses. This loan programme is intended to provide businesses with access to capital so that they can expand their operations and increase their productivity.

All registered MSMEs, including sole proprietorships, partnerships, and companies with an annual turnover of up to Rs. 2 crore, are eligible for the scheme.

Depending on the eligibility criteria, the loan amount can range from Rs. 10 lakhs to Rs. 1 crore. Loan rates are typically very competitive, and repayment terms can range from one to seven years.

The MSME loan scheme is an excellent way for businesses to obtain the capital they require to expand and develop their operations.

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2. MUDRA Loan Scheme

The Indian Government launched the MUDRA (Micro Units Development and Refinance Agency) Loan Scheme in 2015.

This programme gives small and micro businesses access to financing to help them grow and become profitable. Shishu (up to Rs. 50,000), Kishore (up to Rs. 5 lakhs), and Tarun loans are available (up to Rs. 10 lakhs).

Public and private sector banks, regional rural banks, and microfinance institutions all offer MUDRA loans. Loan terms differ from one institution to the next, but they may include flexible repayment options, collateral-free loans, and low interest rates.

MUDRA loans have assisted millions of Indian entrepreneurs and small businesses in starting and growing their businesses.

3. Credit-Linked Capital Subsidy Scheme

The Credit-Linked Capital Subsidy Scheme (CLCSS) is a scheme launched by the Government of India in 2000 to make capital more accessible to small and medium-sized businesses (SMEs).

The scheme’s goal is to provide capital subsidies to these businesses in order for them to modernise their manufacturing processes, resulting in increased productivity and competitiveness.

The Ministry of Micro, Small, and Medium Enterprises oversees the scheme (MSME). The CLCSS provides SMEs with a 15% capital subsidy when they purchase new machinery and equipment to modernise their production processes.

The subsidy is provided to eligible SMEs in the form of a one-time credit-linked subsidy at the time of purchase of new machinery and equipment. The scheme has aided SMEs in modernising their production processes, resulting in increased productivity and competitiveness.

4. Support Schemes from the National Small Industries Corporation (NSIC)

The National Small Industries Corporation (NSIC) provides a number of assistance programmes to small businesses.

The Prime Minister’s Employment Generation Program (PMEGP), the Credit Linked Capital Subsidy Scheme (CLCSS), the Performance and Credit Rating Scheme (PCRS), and the Marketing Support Scheme are examples of these (MSS).

The PMEGP helps small businesses set up new projects, the CLCSS provides interest subsidies to small businesses, the PCRS helps small businesses evaluate their creditworthiness, and the MSS assists small businesses with marketing and branding.

The NSIC also offers vendor development and technology upgrade programmes to assist small businesses in growing and developing. We hope this information assists you in determining the best scheme for your company’s needs.

5. Udyogini

Udyogini is a fantastic organisation dedicated to providing economic opportunities for rural Indian women.

It works to give women access to markets, finance, and knowledge, allowing them to grow their businesses and achieve economic independence.

Udyogini also works to provide women in rural communities with sustainable livelihoods through vocational training, technical assistance, and capacity building.

Udyogini’s work helps to empower women, alleviate poverty, and create a more equitable and prosperous future for all.

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