BUSINESS

Top 5 Government Business Loan Schemes In India In 2022

Every business needs finance for establishment as well as for other activities, such as expansion and maintenance. Business loans from the government are a good option to obtain funds. The growth of the business sector will contribute greatly to the economic growth of the country. That is why the government has introduced and continues to introduce various schemes for the benefit of businesses – both small and large. Read on to know about some of the top 5 government business loan schemes in India in 2022.

  • MSME Loan Scheme

The MSME loan scheme includes all loans offered to MSMEs, startups, individuals, and many other business entities. It can be availed by any business – new or existing.

Certain features of the scheme are as follows:

  • Financial assistance up to 1 crore is available
  • Loan processing takes 8 to 12 days to complete
  • The approval process takes 59 minutes – the loan gets approved or disapproved within the first 59 minutes of applying
  • You can get this loan at 8% ROI, and this enables easy loan repayment HYPERLINK “https://www.creditmantri.com/loan-repayment/”
  • Women entrepreneurs have a reservation of 3%, and they get a quick loan approval. This will help them plan and structure business strategies accordingly.

 

The requisites for obtaining a loan under this scheme
The requisites for obtaining a loan under this scheme

The following are the requisites for obtaining a loan under this scheme

  • GST verifications
  • Ownership related documents
  • KYC Details
  • Bank account statements for the recent 6 months
  • Mudra Loans

Small businesses need funding now and then. The Micro Units Development and Refinance Agency (MUDRA) has come up with a financing scheme through which MSMEs and startups will benefit. Under this scheme, MSMEs can get credit for low interest rates.

Certain features of the scheme are as follows:

  • It is registered through public and private sector banks, cooperative societies, small banks and scheduled commercial banks, and rural banks
  • It provides funds to small businesses that operate in the manufacturing, trading, and services sector.

The loan is guaranteed under three categories as below.

The loan is guaranteed under three categories as below.
The loan is guaranteed under three categories as below.
Loan category Amount
Shishu Loans Up to Rs. 50,000
Kishor Loans 50,000 to 5,00,000
Tarun Loans 5,00,000 to 10,00,000

 

All businesses including partnership firms, private limited firms, public companies, proprietary concerns, and other legal entities are eligible to get a loan under this scheme.

  • Credit Guarantee Fund Scheme

This scheme provides MSMEs with collateral-free credit. Scheduled commercial banks and regional rural banks can participate in the scheme as lenders.

Certain features of the scheme are as follows:

  • It covers both the eligible, existing, and new enterprises
  • It provides working capital loans of Rs. 10 Lakhs without collateral as security
  • It has credit facilities of Rs. 10 Lakhs and up to Rs. 1 crore
  • The Credit Linked Capital Subsidy Scheme (CLCSS)

The Ministry of Micro, Small, and Medium Enterprises has launched the Credit Linked Capital Subsidy Scheme (CLCSS) to provide upfront finance for SMEs and MSMEs. This scheme focuses to provide funds for the technological up gradation of SMEs and MSMEs. Small scale industries, especially in the rural areas, work with outdated technology and machinery. The aim of this scheme is to help these enterprises to harness modern technology.

Some of the sub-sectors covered under this scheme are:

  • Drugs and Pharmaceuticals
  • Glass and ceramic items including tiles
  • Food processing including ice cream manufacturing
  • Rubber processing including cycle/Rickshaw tyres
  • Wooden furniture
  • Cosmetics
  • Dyes and intermediaries
  • Printing industry
  • Poultry
  • Leather and Leather products

Certain features of the scheme are as follows:

  • Provides 15% capital subsidy for investments up to Rs 1 crore in eligible plant and machinery
  • Both existing and newly registered MSMEs will be covered by this scheme
  • The capital subsidy of 15% for eligible plant and machinery will be applicable only for those projects where term loans have been sanctioned by eligible PLIs
  • The industries which have grown from small scale to medium-scale due to additional loan approval under CLCSS are eligible for loans under this scheme
The loan is guaranteed under three categories as below.
The loan is guaranteed under three categories as below.

The following documents are required for loan approval

  • Documents for address proof
  • Business proof
  • Aadhar Card/Voter ID/Pan Card
  • Recently taken photographs
  • KYC documents
  • National Small Industries Corporation Subsidy (NSICS)

Under the NSICS subsidy, MSMEs can avail of two different types of funding:

  • Raw material assistance: Borrowers can opt for the raw material assistance scheme under this subsidy. Under this scheme, the business can provide finance for the cost of indigenous and improved raw materials. It helps MSMEs and SMEs to improve production and its quality

Certain features of the raw material assistance scheme are:

  • Offers credit support of up to 180 days
  • It equips MSMEs with the purchasing power to make bulk purchases, cash discounts, etc.
  • Marketing assistance: Marketing strategies are crucial for business growth. Under the NSICS scheme, the government has been offering marketing assistance to medium and micro-enterprises in rural and urban areas. The aim is to help them remain competitive in a global and technologically advanced world.

Conclusion

The world of business is constantly changing and modernizing. It presents challenges in terms of technology, marketing, employee welfare, and so on. For everything, finance is required and that is where business loans come into play. While there are many best business loan schemes in India, these are some of the top government business loan schemes in India in 2022.

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