Startup Business Loans

Ever since the Startup India campaign was announced in the year 2015, the number of new Micro, Small & Medium Enterprises (MSMEs) has been on the rise. The campaign is based on an action plan aimed at promoting bank financing for Startups and new businesses. It has encouraged startups, which will eventually lead to more job creation, equity and shall help in the nation’s socio-economic growth.

Several leading financial institutions offer Startup loans for new businesses at low interest rates. Further let’s discuss the eligibility required to start a new enterprise, along with popular business loan schemes.

Find below the details of loans schemes initiated by the Govt. of India over the past few years:

1) Startup India

Startup India Scheme is an initiative by the Government of India that offers instant business loans for startups for growth and expansion. Other key functions of Startup India include the promotion of Startups, wealth creation, and employment generation. Register with Startup India to avail business loans at attractive interest rates.

2) Standup India

Stand-Up India Scheme offers funds to people who come under the SC/ST category and women entrepreneurs of the society. Stand-up India scheme was initiated by the Government of India to provide credit services, majorly to SC/ST category people. The primary purpose of this scheme is to help banks by offering loans between Rs. 10 lakh and Rs. 1 crore to at least one SC/ST applicant and one women entrepreneur, per bank branch enabling them to start their own business.

3) psbloansin59minutes.com

The Government of India has launched a web portal that approves business loan applications in just 59 minutes from the time of submission. The minimum loan amount offered under this scheme is Rs. 10 lakh and the maximum is up to Rs. 5 crores. The interest rate offered by Banks/NBFCs under this scheme starts from 8.50% p.a.

4) MUDRA Loan

Mudra Yojana under Pradhan Mantri Mudra Yojana (PMMY) offers loans up to Rs. 10 lakh without asking borrowers for any collateral at affordable interest rates. The repayment tenure is up to 5 years and the processing fee is Nil to nominal. There is no minimum loan amount criteria to borrow. The interest rates shall vary from bank to bank, depending upon the applicant’s profile and business requirements.

5) CGTMSE Scheme

Credit Guarantee Funds Trust for Micro and Small Enterprises (CGTMSE) is another Government initiative that offers funding to MSMEs via financial institutions like banks and NBFCs. Under this scheme, first-time entrepreneurs and startup enterprises are majorly benefitted. The loan offered under the CGTMSE scheme is collateral-free.

6) SIDBI’s Growth Capital and Equity Assistance Scheme

Entrepreneurs can now avail this distinct type of funding for their startup from the banks. Many banks and financial institutions offer loan schemes that are specifically designed to fund startups and their special needs. Different banks may assign different names for these Startup Business Loans.

To apply for a business loan, applicants can check and compare various loan options that suit their business requirements. Follow the below steps to apply for a business loan by clicking ‘Business Loan’ on the homepage of the website.

Step 1: Fill in all the required fields, such as desired loan amount, employment status, annual gross sales or turnover, city of residence, years in current business, collateral type, and mobile number.

Step 2: Check the below box to agree on terms and further Click to ”Unlock Best Offers”

Step 3: Further you are required to mention the Company type, Nature of business, Type of industry, Gross Annual Profit, Bank Account, any existing EMI, Full name, Gender, Residence PIN code, PAN card, Date of Birth, and Email Address.

Step 4: After submitting all the details, the bank’s representative will contact you to proceed with loan formalities.

Step 5: Once your loan application is approved, within defined working days the approved loan amount shall get disbursed in your mentioned bank account.

Prior to approaching a banker or investor with a request for funding, the applicant must prepare a proposal that explains the business model, promoters’ background, revenue model, estimated sales, estimated growth rate, estimated profits, and so on. In short, the proposal must comprise everything related to the business.

Secondly, Startup loan borrowers must not have bad credit and should maintain a good credit score in order to get loans at lower interest rates. Lastly, the applicants must clearly understand the various criteria that Banks employ to screen, rate, and process their loan applications and the importance of furnishing precise and correct information.