Know About Best Loan Schemes Available for Small Businesses

Grants and subsidy loans are sources of financial aid and support for businesses to ensure their survival and growth. Governments generally provide subsidies for businesses.

This type of loan scheme for small businesses has a lower interest rate. You can get a subsidy loan if you start or grow a small business. To promote the growth of small-scale businesses, both the federal and state governments provide many benefits in the form of a loan scheme for small business.

Credit Support Scheme

For the business, the NSIC provides financial assistance for acquiring raw materials. There are 90-day payment terms available. Furthermore, the system supports raw material procurement, including bulk purchasing and cash discounts. Tenders are accessible for free through the system. In order to be eligible for financial assistance, MSME is not required to pay even a security deposit. The NSIC website provides a form for applying for this scheme.


The Micro-Units Development and Refinance Agency are also known as MUDRA. Micro-businesses can receive financial support through this agency established by the government. Mudra loans, as the name implies, provide funding to the unfunded. MUDRA loans are available from all Indian banks.

The amount of MUDRA loans determines their classification. Small loan amounts of up to Rs.50000 are referred to as Shishu loans. Kishor loans range from Rs.50000 to 5 lakhs, and Tarun loans range from 5 lakhs to 10 lakhs.

Credit Guarantee Fund Scheme 

Micro and small enterprises are eligible for the CGTMSE scheme under MSMED. The maximum loan amount under this scheme is 100 lakhs. Any collateral does not secure the loan. New, as well as existing businesses, can apply for the loan.

Working capital loans and term loans are two types of loans. This scheme covers both the manufacturing and service sectors. A loan under the CGTMSE must be applied for at banks. The banks may ask for additional documentation to verify the loan. You should approach at least 2-3 banks when applying for this loan.

Your business project plan needs to be prepared. Be sure to include what you are offering in your plan. A market analysis, a fund requirement, a fund use calculation, a break-even calculation, and a payback calculation.

Professionals can assist you with business plans. The government requires the registration and licensing of your business. Obtain a business PAN card and open a current bank account as well.

National Small Industries Corporation Subsidy

Under the Small and Medium Enterprises Ministry, NSIC is a government enterprise. NSIC provides finance, technology, and marketing support to MSMEs throughout the country. The organization supports MSME through two different schemes.

Credit Linked Capital Subsidy Scheme for Technology Upgradation  

Small businesses can benefit from CLCSS’s technology upgrading program. The technology upgrade can affect several processes, including manufacturing, marketing, and supply chains. Small businesses are responsible for running this program. A capital subsidy of 15% is available for eligible businesses under the CLCSS. This scheme offers a maximum loan of Rs.15 lakh. CLCSS is open to sole proprietors, partnerships, cooperatives, and public and private companies.

Udyogini scheme

The Women Development Corporation in India has launched the Udyogini scheme to assist female entrepreneurs. This program provides financial support for poor women who want to start businesses. Under this program, women entrepreneurs have access to various loans for starting their businesses. Udyogini helps women in rural or backward areas become financially independent and support their families.

SME Entrepreneurial and Managerial Development  

Under this scheme, innovative business ideas can be nurtured (products, services, technologies) and commercialized within a year. The aim is to develop knowledge-based enterprises. Depending on the idea, the loan amount can range between 4 lakhs and 8 lakhs. Infrastructure upgrade loans, orientation loans, and administrative loans are also available.

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