Start-Up India Loans
Webbies
START UP INDIA LOANS
The Government of India has partnered with SIDBI (Small Industries Development Bank Of India) and has introduced a number of flexible loan schemes for Start-Ups of different sectors. Most of the time the SIDBI is directly lending it to the Companies rather than relying on banks.
The Indian startup ecosystem is flourishing at double the speed than before. At the same time, the country’s micro, small, and medium enterprises (MSME) sector comprising 577 Cr companies is beating the challenges of setting up and building the consumer base. Funding at the fetal stage is a big challenge for small-scale Indian Industries and Start-Ups. A variety of loan schemes for all types of industries has eased the process of funding Start-Ups via Start-Up India loans.
WEBBIES LISTS DOWN 5 TYPES OF PROMISING GOVERNMENT LOANS :
PRADHAN MANTRI MUDRA YOJNA :
Launched in 2015, the Pradhan Mantri Mudra Yojna is headed by Micro Units Development and Refinance Agency. Non–corporate small business segment (NCSB) ( like * service sector units shopkeepers fruits/vegetable vendors, truck operators, etc ) comprising proprietorship/partnership firms in rural and urban areas are eligible to apply for the Loan. Mudra provides loans for up to 10 lakhs without collateral. Fiscal incentives are also offered through Shishu ( loans up to INR 50K ), Kishor (loans above INR 50k up to 5 lakhs), and Tarun (loans above INR 5 lakh to INR 10 lakhs).
Click on this website to know more – https://www.mudra.org.in/Offerings
STAND UP INDIA:
Launched in April 2016 headed by the Small Industries Development Bank Of India. (SIDBI) This provides loans to small enterprises in Trading, Manufacturing, and Services. Loans ranging from INR 10 lakhs to INR 1 Crore are provided to at least one SC/ST borrower and one woman borrower to start a business associated with greenfield projects. This covers 75% of the project including the term loan and working capital. The rate of interest would be the lowest applicable rate of the bank for that category (rating category) not to exceed [base rate (MCLR) + 3%+ tenor premium] The loan is repayable in 7 years with a maximum moratorium period of 18 months.
Click on this website to know more- https://www.standupmitra.in/Home/SUISchemes
SIDBI MAKE IN INDIA SOFT LOAN FUND FOR MSMEs (SMILE)
Headed by SIDBI (Small Industries Development Bank Of India.) and launched in August 2015 for entrepreneurs intending to expand, modernise and upgrade technology in the manufacturing and service sector. The aim of this scheme is to provide soft loans, in the nature of quasi-equity, and term loans on relatively soft terms to MSMEs to meet the required debt-equity ratio. The obvious incentives are that 10% of the project cost is covered that is a maximum of 20 lakhs per loan amount.
Click on this website to know more: https://www.sidbi.in/
BANK CREDIT FACILITATION SCHEME:
Headed by National Small Industries Corporation (NSIC), this scheme fulfills the credit requirements of MSME units in India. NSIC has entered into a memorandum of understanding with many National and Private Sector banks. This is for the purpose of a credit support arrangement without any cost to MSMEs. The repayment period is between 5-7 years but can also go up to 11 years depending on the income generated by the Start-Up.
4E (END TO END ENERGY EFFICIENCY)
Launched in September 2016 under Small Industries Development Bank Of India. (SIDBI). Eligibility criteria for this type of loan are fulfilling for Startups operating for more than 3 years and have significant earnings of 2 years. This loan scheme meets the cost of capital requirements, machinery, civil works, etc. This scheme is launched jointly by India SME Technology Services in association with World Bank. The intention was to launch Energy efficiency measures and initiatives in India.
Some industry-specific eligibility criteria for Start-Up India loans include:
The Start-Up should not be associated with any bank or financial institution.
Should have undergone a detailed process of energy audit consulted under a Bureau of Energy Efficiency (BEE) certified auditor.
The unit should not have availed a performance grant under World Bank-Global Environment Facility (WB-GEF) Project and should comply with the Environment and Social Management Framework.
A few major incentives of this scheme are:
The MSME startup has to pay only INR 30,000 and applicable taxes. The balance fee the auditors have to pay.
Eligible loan amount should not exceed one-fifth of the total turnover of the Start-Up.
The repayment period, shall not be more than 36 months for loans up to INR 100 Lakh. 60 months for loans beyond INR 100 Lakh.
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