India is strengthening its position as a world leading startup destination. Two cities of the country, Bengaluru and Mumbai, are far ahead in this matter. These cities have made their place in the top 50 startup cities around the world in the latest rankings of the pitchbook under the Global Venture Capital Ecosystem in 2024.
Earlier, in March 2024, Prime Minister Narendra Modi said at the startup Mahakumbh that at present, India is the third largest startup ecosystem in the world.
Despite all these development, a lot of funding is required in the journey from the idea of a startup to its examination. Many entrepreneurs have to struggle a lot for funds. To solve this challenge, the Government of India has started many loan schemes. In addition to government schemes, startups can also apply for loan through digital lending platforms like Moneycontrol. You can apply for a loan up to Rs 50 lakhs through the Moneycontrol app and website with 100% paperless process. Interest rates begin at 10.5% annually. Let us tell you about some government schemes:
Pradhan
The Pradhan Mantri Mudra Yojana (PMMY) provides financial support to non-corporate, non-farming (non-agricultural) small and micro enterprises. Under this scheme, loans up to Rs 20 lakh are available. Loan dishabers are made through different financial institutions like Commercial Banks, RRB, Small Finance Bank, MFI and NBFC. This scheme provides loans in four categories, including –
- Baby: Loan up to Rs 50,000
- Teen: Loan ranging from 50,000 to 5 lakh rupees
- Tarun: Loan ranging from 5 lakh to 10 lakh rupees
- Tarun Plus: Loan ranging from 10 lakh to 20 lakh rupees
Stand Up India Scheme
The Stand-Up India Scheme is a scheme of the Government of India, which provides bank loans to Scheduled Castes/Tribes (SC/ST) and women’s entrepreneurs. The aim of this scheme is to promote entrepreneurship between these communities so that they can setup a greenfield project in manufacturing, service, trading or agriculture sector.
Through this scheme, banks have to help in starting a new business by giving at least one SC /ST and a female entrepreneur from 10 lakh to 1 crore rupees. If the enterprise is non-individual, then more than 51% shareholding and control SC/ST or female entrepreneur should be near.
One Rupee Debit Card is issued to facilitate loans. Meanwhile, the beneficiaries are also helped through the network of agencies engaged in training, skill development, mentoring, project reports, application filling, work shed/utility support services, subsidized schemes.
Credit Guarantee Scheme for Micro and Small Enterprises
This scheme was started by the MSME ministry. The Ministry of MSME has set up a Credit Guarantee Fund Trust for Micro and Small Enterprises in association with SIDBI. The aim of this scheme is to help Micro and Small Enterprises to help the loan without any bail or third party guarantee. Since April 1, 2023, this scheme has been changed so that MSE can be offered a collateral-free loan of up to Rs 5 crore through a network of CGTMSE Member Lending Institution.
Credit Guarantee Scheme for Startups (CGSS)
This scheme provides a credit guarantee for loans that DPIIT recognized startups have taken from the Scheme Member Institutions (MIS). This guarantee is provided to Member Institution (Mi) through the National Credit Guarantee Trustee Company (NCGTC), which gives loans to startups. This scheme gives a credit guarantee of up to Rs 10 crore. Credit guarantee coverage can be either transaction-based or ambrella-based. (Transaction-based cover means that separate guarantee for every loan transaction is provided, while the Ambrela based cover covers several loans under the same guarantee).
How to apply startups for government loan scheme?
If you also want government help for your startup, then first you have to go to the scheme related to the scheme. Here you can learn about the details and needs related to the scheme. After this, you can visit the Landender website and fill the online loan application form by uploading the related document. If you want, you can also go to the lender branch to fill the application form and you can submit a document related to the scheme for which you want to apply.
Eligibility to apply for government loan scheme
Eligibility criteria vary from government loan scheme, but startups typically have to meet the needs below:
- Startup should be operational for at least 5 years.
- Its total turnover should not be more than Rs 25 crore.
- The startup has been received from the Department of Industrial Policy and Promotion (DIPP).
- Many lender also needs patent guarantee from Indian patent and trademark office.
Document required to apply startup loan
- Two passport size photo
- Identity proof, which may include driving license, voter ID, passport, Aadhaar card or PAN card
- Address proof, which may include passport, driving license, voter ID, Aadhaar card or postpaid phone bill
- Passport or PAN Card for Age Proof
- Bank statement of last six months for income proof, income tax return return or salary slip
- Bank Verified Signature, PAN Card or Passport for Signature Proof
- Cancel check of the same bank account or copy of front page of passbook
conclusion
Summary
India’s startup ecosystem is growing rapidly. For emerging entrepreneurs, government loan schemes and digital lending platforms such as moneycontrol are removing the obstacles in funding. Learn about them in detail in this article.
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Disclaimer
This fraction/article is written by an external partner and does not reflect the work of the editorial team of Moneycontrol. This may include references to products and services offered by Moneycontrol.