In the Uncertainty of COVID-19, several things have emerged actually better for society. Let us take the example of MSMEs (Ministry of Micro, Small and Medium Enterprises) decisions and steps taken by the Government of India for the betterment of the Indian business and Industrial culture.
Recently, PM announced a significant amount of the budget for the MSMEs for making the start-up culture flourish in the country. To maintain transparency in the system and to listen to all the queries of the entrepreneurs, the government has also launched CHAMPION Portal as a one-stop solution for the start-ups. Many financial aids have also been offered to the start-ups for supporting their businesses. If you have some business prototype in mind and you are looking for financial support, you can try out these top 5 most demanded loans offered only to the start-ups in India.
- PM Mudra Yojana
PM Mudra Yojana tops the list of the financial support schemes for the start-ups. MUDRA stands for Micro Units Developments and Refinances Agency Ltd. MUDRA aims to provide financial help to small businesses. The financial support is divided into three stages for distribution among the start-ups based on their growth, development, and needs.
- Shishu Loan – Up to 50,000 INR.
- Kishore Loan – 50,000-5 Lakh INR.
- Tarun Loan – 5 Lakh to 10 Lakh INR.
- All the loans are collateral-free.
- 1% per month is charged as the interest rate.
- Stand Up India Scheme
Stand up India Scheme was launched in 2016 headed by SIDBI (Small Industries Development Bank of India). The bank provides a loan of the amount between 10 Lakhs to 1 Crore to the start-ups. The amount allocated to the different start-ups depends upon the kind of its output, covering 75% of the total amount spent on the start-up’s project. Also, this scheme is available for both service industries and manufacturing industries.
- SMILE Fund
SMILE fund stands for SIDBI Make in India Soft Loan for Enterprise (MSMEs). It is another fund offered to the start-ups based on equity and other terms. Though the amount of the scheme is not significant, it covers 10% of the total expenditure of the particular start-up project. This scheme is generally distributed for the expansion, development, growth and modernization of the existing project. The maximum amount allocated through this scheme is INR 20 Lakhs for the period of three months from the day of the amount allocation.
- COIR Udyami Yojana
This loan scheme is strictly for the start-ups and MSMEs working in agricultural industries. Nowadays, the government is focused more on enhancing the rural economy by supporting the agricultural industries. Only those start-ups that are registered under COIR industry registration 2008 are eligible for this scheme. A maximum of INR 10 Lakhs can be allocated under this scheme for NGOs, self-help groups, COIR Units establishment, etc. So, if you are planning for agricultural start-ups, you can look up to this scheme.
- Credit Guarantee Scheme (CGS)
CGTMSE funds credit Guarantee scheme. It stands for Credit Guarantee Fund Trust for micro and small Enterprises. This scheme is granted to the existing or newly found MSMEs except Educational institutes and agricultural start-ups. Almost INR 100 Lakhs of the amount can be allocated to the start-ups depending upon their eligibility and needs. This scheme gives working capital loans or unsecured loans in terms of term loans.
There are several other schemes available for start-ups in India. If you are also looking for the start-up funds and schemes, then you can check the MSMEs websites and CHAMPION portal for start-up eco-system. You can also check on the Start-up India website where you can find several schemes and funds related information for the start-ups funding and grants.