There has been a huge influx of startups in India in the last decade. Many of these startups have become worth billions of rupees. Many names can be taken from Paytm to Zomato. However, every startup starts with an idea.
To bring this idea into reality, a team of skilled leaders and sufficient funds are needed. Startups can get funds through angel investors, friends and family. Or they can borrow. The government has started many schemes to provide loans for startups in India. Let us also tell you which schemes the government has started for startups.
Eligibility for Government Loan
- Credit History: Lenders give loans to startups that have a good loan repayment record and are able to repay the loan.
- Type of business: Sometimes lenders also look at what your business is and provide loans accordingly.
- Making profits: If your startup is making profits and there is no problem in repaying the loan, then the lender gives you the loan.
Prime Minister’s Mudra Scheme (PMMY)
This scheme was started in 2015. Under this scheme, small businesses get loans up to Rs 10 lakh. There are three types of loans in this:
- Infant: Up to Rs 50,000
- Teens: Rs 50,001 to Rs 5 lakh
- Tarun: Rs 5 lakh to Rs 10 lakh
There is no need to give any guarantee in this. Women can take it at low interest.
Stand Up India Scheme
Under this scheme started in 2016, SC/ST and women get loans ranging from Rs 10 lakh to Rs 1 crore. This loan is only for new projects. 7 years are given to repay the loan and no installment has to be paid for the first 18 months.
Credit Guarantee Fund Scheme (CGSS)
Credit Guarantee Scheme for Startups (CGSS) was launched in 2016 under the Startup India scheme. This scheme is run by the National Credit Guarantee Trustee Company Limited. Startups that get approval from DPIIT and whose earnings are good for the last 12 months are covered under this scheme. Also, those who do not have any loan default (NPA) can take advantage of this scheme.
Prime Minister Employment Generation Programme (PMEGP)
This scheme is for increasing employment. Under this scheme, a loan of up to Rs 25 lakh is available for the manufacturing sector and up to Rs 10 lakh for the service sector. Only new projects get loans under this scheme. Existing businesses cannot avail this benefit.
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