Top Government Business Loan Schemes in India

16 February 2024
5 min read
Top Government Business Loan Schemes in India
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Just like we need the right amount of food and nutrition to survive, running a business requires a constant flow of funds. Be it a startup, an existing business, or a well-established enterprise, funds are the fuels that accelerate its growth.

Without an ample amount of a regular cash flow, making your business breathe in this competitive world is next to impossible.

Though today there are tons of banks offering business loans, the Indian government also has taken effective steps over the years to lend a monetary supporting hand to startups and even existing businesses to keep their operations going.

Here we will take a look at some of the top government business loans schemes that can help your business up and running!

Top 5 Government Business Loan Schemes 2024

Here are some of the best government business loan schemes offered in India-

S.No.

Govt Business Loan Schemes

1.

MSME Loan Scheme in 59 Minutes

2.

Pradhan Mantri MUDRA Yojana (PMMY)

3.

National Small Industries Corporation

4.

Credit-Linked Capital Subsidy Scheme

5.

SIDBI Loan

1) MSME Loan Scheme in 59 Minutes

To help MSME business suffice their working capital needs, the Indian government introduced the MSME Loan Scheme. Under this entrepreneur loan scheme, any new or existing enterprise can avail itself of a loan up to Rs. 1 crore.

Usually, it takes around 8-12 days for the loan processing to get completed. Also, for the approval/disapproval of the application, it just takes 59 minutes (incredible, right!).

Another interesting fact to know about this loan scheme is that a business can avail of the loan at an 8% interest rate. Also, women entrepreneurs can benefit from the advantage of the 3% reservation under this scheme.

2) Pradhan Mantri MUDRA Yojana (PMMY)

Pradhan Mantri MUDRA Yojana is another fantastic govt loan scheme 2024. It is primarily suitable for women entrepreneurs, enterprises related to service and trading, etc.

MUDRA, short for Micro Units Development and Refinance Agency Ltd., acts as a refinancing support system for banks and NBFCs that lend credit to small businesses.

The loan under the scheme comes with a collateral-free credit option wherein the borrowers get the choice to extend the period of repayment.

In the MUDRA loan, the following 3 loans are offered-

S.No.

MUDRA Loan Scheme

Principal Amount

Interest Rate

1.

Shishu MUDRA Loan

This loan scheme provides a loan of up to Rs 50,000

1%-2% p.a.

2.

Kishor MUDRA Loan

This loan scheme provides a loan of up to Rs 5 lakhs

8.60%-11.15% p.a.

3.

Tarun MUDRA Loan

This loan scheme offers loans over Rs 5 lakh up to Rs 10 lakh

11.15%-20% p.a.

3) National Small Industries Corporation

This scheme is like a boon for those entrepreneurs who look forward to getting their hands on some financial aid in the departments like technology, marketing, finance, etc. It is often considered one of the best government schemes for business owners.

NSIC offers the below-mentioned 2 schemes-

  • Marketing Support Scheme: A business can make the most of this scheme by getting marketing support via Consortia schemes, Tender Marketing, etc. This can immensely help in business promotion, marketing and expanding market reach.

  • Credit Support Scheme: Under this scheme, financial assistance can be availed of for procuring raw materials, finances, marketing, etc.

4) Credit-Linked Capital Subsidy Scheme

It is a government subsidy loan for businesses that is a perfect match for those who need finance to fund technological advancements in industries. Here technological advancements may include marketing, supply chain, manufacturing, etc.

Be it a partnership firm, private or public limited company, sole proprietorship, or even a cooperative company, all stand a chance to be eligible for loans under the CLCSS.

This business loan scheme is often a top choice since the one who opts for it gets an up-front capital subsidy of 15% (awesome, no?)

5) SIDBI Loan

SIDBI is short for Small Industries Development Bank of India. It is known to be one of the oldest entities to offer government business loans.

It mainly lends a helping hand to MSME businesses that are in dire need of funds. SIDBI offers direct loans. However, it provides indirect loan schemes to NBFCs and SFBs.

An important point to note about this loan scheme is that it offers loans between Rs 10 lakhs to 25 crores. Remember, the loan period can range up to 10 years. Interestingly, without any collateral, a loan of Rs 1 crore can be taken via SIDBI.

Other Government Loan Options for Businesses

There are several other options that you can have a look at, like the Credit Guarantee Fund Scheme, Stand Up India loan scheme, NABARD loan scheme, Prime Ministers' Employment Generation Programme, and many more that offer easy financing to boost your business.

Summing Up

We all know businesses need ample money to make it reach the desired scale of operations. Letting your business flourish like a flower in this cut-throat competitive world is hard without it. Therefore, to meet this necessity and gear up your business, taking a loan from a government scheme can turn out to be a fruitful decision.

Hence, go through the above-listed govt loan schemes and pick the one that meets all your financial requirements.

You May Also Be Interested to Know-

1.

Best Business Loan in India

2.

Best Education Loan in India

3.

Best Home Loan in India

4.

Best Personal Loans in India

5.

Best Car Loans in India

Disclaimer: This blog is solely for educational purposes. The securities/investments quoted here are not recommendatory.

To read the RA disclaimer, please click here
Research Analyst - Himanshu Sinha

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