In recent years, the number of entrepreneurs in India has increased rapidly, indicating that more people are interested in starting their own businesses. For any business or startup, funding is as essential as food is for a person. Keeping this in mind, the Indian government has taken effective steps in the past few years to provide financial assistance to startups and existing businesses to maintain continuous cash flow.
Today, we will introduce you to six government schemes that can help maintain continuous cash flow for your startup or existing business.
MSME Loan Scheme
To assist MSMEs with their working capital needs, the government has introduced the MSME Loan Scheme. Under this scheme, any new or existing enterprise can obtain a loan of up to ₹1 crore. Typically, the loan process takes about 8-12 days to complete, and the approval/rejection of the loan application takes only 59 minutes.
Credit Guarantee Fund Scheme
The CGTMSE (Credit Guarantee Fund Trust for Micro and Small Enterprises) has been providing collateral-free loans to MSMEs for a long time. The CGTMSE scheme offers working capital loans of up to ₹10 lakhs without any collateral.
Pradhan Mantri MUDRA Yojana (PMMY)
The Pradhan Mantri MUDRA Yojana is mainly suitable for women entrepreneurs, service and trade-related enterprises, etc. This scheme also offers collateral-free loans, with the option to extend the repayment period. A business firm can apply for the MUDRA Loan Scheme under three categories:
- Shishu MUDRA Loan: Loans up to ₹50,000 are provided at an annual interest rate of 1-2%.
- Kishor MUDRA Loan: Loans up to ₹5 lakhs are provided at an annual interest rate of 8.60-11.15%.
- Tarun MUDRA Loan: Loans ranging from ₹5 lakhs to ₹10 lakhs are provided at an annual interest rate of 11.15-20%.
National Small Industries Corporation (NSIC) Scheme
This scheme offers two types of loans:
- Marketing Assistance Scheme: The funds received under this scheme can be used to enhance your competitiveness and market value of your offerings. It helps in business promotion, marketing, and increasing market access.
- Credit Assistance Scheme: This scheme provides financial assistance for raw material procurement, financing, marketing, etc.
Also read: Home Loan EMI Calculator: A Tool for Monthly Payment Plan
Credit-Linked Capital Subsidy Scheme
This is a government-subsidized credit scheme for businesses that require funds for technological advancements in industries. Technological advancements can include marketing, supply chain, manufacturing, etc.
SIDBI Loan
SIDBI, or Small Industries Development Bank of India, is one of the oldest institutions providing government business loans. SIDBI loans primarily assist MSME businesses in dire need of funds.