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Top 6 Business Loan scheme | How to get small Business Loan

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Know about best business loan schemes that you can avail for your personal and business. Today Small and Medium Enterprise (SME) sector is contributing 40% of total Gross Domestic Products (GDP) of India. Small business is main source of employment in India.  Do you want to start a small Business or do you have a small establishment?  If you are an entrepreneur looking for financing, business loan may be the best option for you. Small business loan can be used to cover payroll, new equipment, and the growth of a business.  Most of the leading public and private sector banks in India provide business loans under various government schemes such as MUDRA loans, MSME loan, SMILE loan etc. read this guide to understand business loan types and how you can apply for taking loan.

List of Government Loan Scheme for small Business

SLLoan Scheme for businessLoan AmountRepayment Tenure
1. MSME Loans in 59 minutes Rs.1 lakh to Rs.5 crore As per the bank
 2.Pradhan Mantri Mudra Yojana (PMMY)Up to Rs.10 lakhBank will decide it
3.SIDBI Make in India Loan for Enterprises (SMILE)Rs.10 lakh onwardsUp to 10 years
4.Bank Credit Facilitation SchemeDepend on bank5 years to 7 years
5.Credit Guarantee SchemeUp to Rs.1 croreDecided by bank
 6.Stand-Up India SchemeRs.10 lakh to Rs.1 crore7 years
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MSME Small Business Loans in 59 Minutes

MSME (Micro, Small and Medium Enterprise) introduced commercial loan in September 2018, and it is most reliable loan scheme for small business. You can avail the loan amount from 1 Lakh to up to 5 Crore. This loan application can take about 8 to 12 days to complete the process, wherein the approval for the loan is received within 59 minutes. Interest rate of MSME loan start from 8.5%. This loan required very less documents.

Business Classification

BusinessMaximum Business assetMaximum Annual Turnover
  MicroRs. 1 CroreRs. 5 Crore
  Small  Rs. 10 Crore Rs. 50 Crore
  Medium Rs. 50 Crore Rs. 250 Crore

MSME Business Loan Eligibility Criteria

You can take benefit of MSME loan, Check below for the loan eligibility criteria:

Business types for MSME loanEnterprises engaged in manufacturing, trading, and services related.
Applicant AgeAge must between 25 years and 66 years
Business statusNew or existing enterprises.

Documents Required for MSME loan

Application formCollect application form bank or financial institutions.
DocumentsPAN card of establishment. Registration copies of organization Directors PAN and Aadhar card. TAX and audit report GST return copy Last 6 months bank statement Address proof of establishment Passport size picture of applicant

How to Apply MSME Business Loan?

Loan application process is very simple. First search some website where you can apply your loan application along with your documents. Some example of site to apply MSME loan online are- Apply loan from SBI, MSME Loan. You can also visit your nearest government bank for MSME loan they will guide you in application process.

After successful application financial institution/Bank will verify your application and your business. After their approval you will get the loan directly in your bank account. It may take maximum 1 hour to receive your fund.

MUDRA Loan for small business

Micro business can avail mudra loan sanctioned by Micro-Units Development and Refinance Agency organization, established by govt of India. Mudra loan has been implemented for small business. You can directly apply mudra loan from any bank branch.

There are Three types of Mudra loan

  • Shishu loans – Loan amount up to Rs. 50,000
  • Kishor loans- Loan amount 50,000 to 5,00,000
  • Tarun loans- Loan amount 5,00,000 to 10,00,000

Eligibility criteria of mudra loan

Any Indian citizen can apply mudra loan. It need any business registration documents under proprietorship, partnership firm, Private Ltd. Etc.

Documents required for Pradhan Mantri Mudra Loan

  • Mudra application form
  • BIL application form
  • Photo identity proof- Aadhar card
  • Address proof- Voter Card
  • Establishment proof- Business registration like Trade license
  • Bank statement (last 6 months)-
  • Proof of qualification
  • Last 2 years ITR

How to apply Mudra Loan?

Visit your nearest bank branch. Also you can apply online from various bank website like- SBI, or Mudra loan Form download.

SIDBI Make in India Loan for Enterprises (SMILE) Loan

Make in India Loan scheme is to build infrastructure for MSMEs. There are 25 sectors covered under this loan scheme. This loan primarily focus upon new establishments deals with manufacturing services. you can take this loan for your business. Interest rate is very low and repayment period is long.

Eligibilities criteria

  • All MSME can avail this loan
  • There are 25 sectors including Automobile, Aviation, Food, Skill, Oil and Gas, Renewable energy, Pharmaceutical etc.
  • Any registered entity willing to upgrade machineries, setup, or business.

Documents Required

  • Identity Proof- Voter Card, Passport, Aadhar card etc.
  • Residential proof- Electricity bill, water bill, voter card etc.
  • Biodata- Promoters biodata.
  • Udyog Aadhar memorandum registration.
  • Registration copy of establishment.
  • Organizational profile.
  • Balance sheet of organization.
  • Next two years projected balance sheet
  • Details of project report.

How to apply SIDBI Make in India Loan for Enterprises (SMILE) Loan

To avail this loan you have to apply in prescribed format form as per guidance below.

  • You have to visit your nearest SIDBI branch to apply this loan.
  • Or visit official website SIDBI

Credit Guarantee Fund Scheme for Micro and Small Enterprises (CGFMSE)

It is government of India loan scheme that allows funding through loans without collateral to those businesses that fall under the MSME sector. This loan can be avail by both new and existing establishment. The Credit Guarantee Fund Trust has been established to implementing the CGFMSE scheme. You can take up to 200 lakhs loan for your business.

Loan Eligibility

This loan can be avail by manufacturing industries, retail industries, educational institutions, SHG implemented trade, Educational institutions etc.

Bank Credit Facilitation Scheme

National Small Industries Corporation or NSIC establishment of govt. of India has signed MoU with various bank to provide finance support for small establishments.

Features of this loan-

  • Organizations can take this loan as working capital and term loan.
  • Interest rate is very low.
  • Can take long repayment option.

Types of bank credit facilitation scheme.

  1. Term Loan– This loan can be avail for 1 to 10 years period. this types can ve divided into three categories
    1. Short term loan
    2. Medium term loan
    3. Long term loan
  2. Non-Fund based limits– company create a credit account in bank for this loan. from this account company withdraw money as per loan amount set by the bank.
  3. Working capital limits

Documents required for this loan?

  • Identity Proof- Voter Card, Passport, Aadhar card etc.
  • Residence proof- Electricity bill, water bill, voter card etc.
  • Address proof of business- electric bill of establishment.
  • IT return proof.
  • Estimate balance for next two years.
  • MSME registration certificate.
  • Dead registration copy of establishment.

How to apply for Bank credit loan?

What is Bank Credit Facilitation Scheme?

To meet the credit requirements of MSME units NSIC has entered into a Memorandum of Understanding with various Nationalized and Private Sector Banks . Through syndication with these banks, NSIC arranges for credit support (fund or non fund based limits) from banks.

Is there any cost for applying loan scheme?

No fee is charged from the MSME unit for applying for loan under any scheme.

What is a Micro Enterprise?

Investment in Plant and Machinery or Equipment does not exceed Rs.1 crore and Annual Turnover is not more than Rs.5 crore.

What is a Small Enterprise?

Investment in Plant and Machinery or Equipment does not exceed Rs.10 crore and Annual Turnover; not more than Rs. 50 crore.

What is a Medium Enterprise?

Investment in Plant and Machinery or Equipment does not exceed Rs.50 crore and Annual Turnover ; not more than Rs. 250 crore.

What is the interest rate of MSME loans?

It varies from bank to bank.

Which business loan scheme is more appropriate for women?

Udyogini loan scheme is best for women who is willing to start a business. Udyogini is Govt. of India loan scheme which interest rate is very low.

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