List of MSME business loan schemes by government

The growth and success of an increasing number of Micro, Small, and Medium-Sized Enterprises (MSMEs) is something that the Indian government is particularly interested in. It’s easy to understand why. India’s growth is due to micro, small, and medium-sized enterprises (MSMEs). Despite being labelled “Micro and Small,” MSME business loans have had a HUGE effect on India’s economic growth in the contemporary era.

The major goal of an MSME business loan subsidised by the Indian government is to increase MSMEs’ access to capital, allowing them to grow, and boosting employment and economic output in India.

Here is a list of some of the popular MSME loan schemes offered by the Government of India: 

Five most crucial government loan programs for small businesses

1. MSME Loan in 59 Minutes

SIDBI has developed one of the world’s most progressive government financing programs. It is for micro, small, and medium-sized enterprises (MSME) and new companies. This government loan scheme may approve a loan in as little as 59 minutes. After approving the loan, it takes 8-9 days to disburse the cash.

Loans of up to Rs. 10 crores are available from five nationalised banks as part of this scheme for small and medium-sized businesses. The interest rate on this MSME business loan is based on several factors. Including the kind of business loan, MSME loan taking out a loan, and the owner’s credit history.

You can get this loan in less than 59 minutes if you have the following paperwork ready:

• Financial reports are recorded in GST.
• Most recent bank statements (those from the last six months)
• The corporate registry keeps the owner’s Know Your Customer details.
• Documents related to credit reports and CIBIL scores

When to Apply?

If a small or medium-sized firm needs an immediate capital of less than Rs 10 crores, and if they would like to pay a low loan rate – up to 8% in some cases – you may qualify for this government initiative.

2. Pradhan Mantri MUDRA Yojana (PMMY)

This programme was started by the Indian government to promote small and micro businesses that are neither corporations nor farms. To assist a variety of endeavours, including the industrial, commerce, and service sectors, it provides loans up to Rs. 10 lakhs.

Depending on the growth stage of the MSME or startup, three different forms of MUDRA loans can be availed.

• The Shishu program offers loans of up to Rs 50,000 to startups and small and medium-sized enterprises.
• Mid-range Kishor Plan may provide up to Rs 50,00,000 to MSMEs and startups.
• Existing micro, small, and medium-sized enterprises (MSMEs) and startup companies may apply for funding of up to Rs 1,00,00,000.

When to Apply?

This government program offers incentives to small firms that are just getting started and might need help getting off the ground. This loan program is best suited for short-term yet urgent needs since the maximum funding allowed for an established MSME is Rs 10 lakh.

3. Credit Guarantee Fund Scheme

The programme offers banks and other financial institutions credit guarantee coverage for loans made to micro and small businesses without the need for collateral security.

Both new and established enterprises may apply for unsecured loans under this scheme in the amount of up to Rs 10 lakh (approximately $20,000).

The Credit Guarantee Fund Trust for MSMEs will cover loans up to Rs. 10 lahks, but for new businesses needing between Rs. 1 crore and Rs. 10 crores in financing, MSME business loans can serve as the primary security or as a mortgage on land and buildings linked to government loan programmes. Therefore, for loans up to Rs 1 crore, the company’s capacity to utilise the credit facility to produce assets is regarded as collateral.

When to Apply?

Companies with a physical location and tangible assets (including buildings and equipment) are prioritised under the Government of India’s CGTMSE program. Companies may get up to Rs 1 crore in loans to expand or strengthen their operations by mortgaging their current assets.

4. National Small Industries Corporation (NSIC) Schemes

The National Small Industries Corporation and several top banks, including Piramal Housing, ICICI Bank, Axis Bank, HDFC Bank, YES Bank, and others, have signed an MOU to provide quick MSME business loans.

These NSIC schemes provide various schemes for the development and promotion of MSMEs in India. These include marketing assistance, technology upgradation, raw material assistance, and credit facilities.

When to Apply?

This government-backed initiative makes it easier for small enterprises to get low-interest bank loans for expansion and modernisation. Applying for a loan under this programme is streamlined thanks to the government’s help with documentation and legal problems.

5. Credit Link Capital Subsidy Scheme

Under the Credit Link Capital Subsidy Scheme (CLCSS), the Government of India and the Ministry of MSME offer small businesses loans and credits for technological advancement.

This government programme strives to make sure that MSMEs can stay up with technology changes and remain competitive in both home and international markets. To implement cutting-edge technology, small and medium-sized businesses (SMEs) are eligible for loans up to Rs 15 lakh, or 15% of the total upgrade cost.

When to Apply?

Companies in the manufacturing, fabrication, and textile industries. Also, small and medium-sized enterprises use machinery and equipment. Through Central Government Loan Schemes, these have a great opportunity to develop and adapt to new technologies.

Conclusion

Do you need help determining where to start looking for the finest startup? Or do you want to look for small business government funding programs? Visit Piramal Financing House and speak with experts to learn more about the available government loan schemes for MSME funding. Piramal Financing House is the only place to find and hire your company’s best and brightest consultants and advisors.