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Government schemes to avail loans for your business

Normally people ask questions as what are the government schemes to avail loan and how to apply for this government loan?

So, please find the details for further understanding on government schemes.

1. Loan in 59 minutes

  • The government of India announced this scheme for the MSMEs loan.
  • The loan can be availed up to the amount of Rs. 5 crores.
  • The interest rate is up to 8.5%.
  • You can avail of this loan within 59 minutes.
  • You can visit www.psbloansin59minutes.com to get complete information regarding your loan. Also, you can apply for a loan on this website.
  • You can choose the lender, so the rate of interest may vary from bank to bank.


  • For business loan :
  • You can apply for a loan amount between Rs. 1 lakh to Rs.5 crore.
  • This platform is integrated with CGTMSE (Credit guarantee funds trust for micro and small enterprise).
  • This is integrated with CGTMSE to get information about the borrower's eligibility.
  • For personal loan:
  • You can avail of personal loans up to the value of Rs.20 lakh.


  • What are the documents required to avail Loan in 59 minutes?
  • GST identification number
  • Bank statement of last 6 months in PDF format
  • Income tax return of minimum 1 year
  • Personal details of your partners and directors

  • For non-registered business:
  • This loan facility is also available for non-registered business.
  • You can visit their official website to get information related to loan facilities available for non-registered business.

  • 2. Pradhan Mantri Mudra Yojana (PMMY)
  • This scheme was launched by our hon’ble prime minister on 8 April 2015.
  • Non-corporate and small MSMEs can avail Loan up to Rs.10 lakhs.
  • This is also known as “Mudra loan”.
  • You can find all the information on their website www.mudra.org.in.
  • There is no minimum amount under this scheme.
  • No type of collateral security is required in this scheme.
  • There are 3 categories of Mudra Yojana as mentioned below:
    1. Shishu category:
  • This category is for micro business owners.
  • You can avail loan amount up to Rs.50,000.

  • 2. Kishore category:
  • This category provides loans for small businesses that have started the business but need capital to convert their business into a large enterprise.
  • This category provides loan between Rs.50,000 to Rs.5,00,000.

  • 3. Tarun category:
  • This category also provides loan facilities to small business owners.
  • You should focus on this category only when you want to expand your business units.
  • You can apply for a loan amount between Rs. 500,00 to Rs. 10,00,000.

  • What are the eligibility criteria for the Mudra loan?
  • Indian citizenship
  • Amount between Rs.50,000 to Rs.10,00,000
  • Rural MSME’s
  • Urban MSME’s
  • Collateral security is not required
  • What are the documents required for the Mudra loan?
  • Identity proof (driving license/voter id/PAN card/Aadhaar card)
  • Residential proof (telephone bill/electricity bill/Aadhaar card/attested bank statement/voter id/property papers)
  • 2 Passport size photos
  • Business identity proof (registration certificate)
  • Rent agreement
  • Clearance certificate
  • Small scale industries registration
  • A balance sheet of 3 years
  • Partnership deed
  • Asset &liability statement of promoter
  • SC/ST certificate
  • Bank will issue your “Mudra card” when your loan is approved. The amount will be transferred into your account and you can use this card to withdraw cash.

    3. Credit Guarantee Fund Scheme for MSME’s (CGS)
  • This scheme was launched by the government of India.
  • It provides loans without any collateral security.
  • You can avail loan up to Rs. 2crore under this scheme.
  • Both new and existing business owners can avail of this loan.
  • MSME ministry, the government of India, and SIDBI (small industries and development bank of India) have made a trust known as “Credit Guarantee Fund Trust for Micro and Small Enterprises).
  • If you fail to repay the loan, CGTMSE trust will pay the maximum amount of your loan to the bank.
  • Many public sectors, private sector, foreign banks, and regional rural banks are associated with this scheme.
  • What are the slabs for eligibility for a credit guarantee?
    1. Laghu Udyog :
  • This category of credit guarantee includes micro-enterprises.
  • A credit guarantee of 85% is given up to the amount of Rs.5 lakh in case of a default situation.
  • CGTMSE trust will provide credit guarantee to their lending bank.
  • A credit guarantee of 75% is given for the loan amount between Rs. 5lakh to Rs.50 lakh.
  • A credit guarantee of 75% is given for the loan amount between Rs.50 lakh to Rs.2 crore.
  • 2. Mahila Vyavsaya
  • A credit guarantee of 80% is given for the loan amount between 5 lakhs to 50 lakhs.
  • A guarantee of 75% is given for loan amount exceeding Rs.50 lakh.
  • A credit guarantee of 75% is given to SME's who fall under this slab.
  • 3. Retails
  • A credit guarantee of 50% is provided for an amount of less than Rs.50lakh.
  • Any interest or service charge for delay in loan instalment will not fall under guarantee cover.
  • The guarantee will be provided only if you pay guarantee fees.
  • Guarantee fees can be paid by you or your bank to the trust.
  • Guarantee cover for a maximum of 5 years is provided to working capital.
  • The guarantee covers full loan duration on the term loan that is taken for infrastructure set up.
  • If your enterprise is not doing manufacturing /retail/service business, you cannot apply for this scheme.
  • Also, if you have already taken a third-party guarantee from somewhere else, you cannot reap the benefits of this scheme.
  • You can find all the information about this scheme on its website www.cgtmse.in.
  • 4. National Small Industries Corporation Subsidy
  • NSIC works towards the growth of MSMEs.
  • It provides support services in the areas of finance, technology, and marketing.
  • It provides funds for machinery hire and purchase.
  • It also provides loans for exports.
  • Interest rates on loans may vary from bank to bank.
  • The typical interest rate lies between 10.5-12%.
  • Priority sectors of NSICS include :
  • Agriculture
  • Education
  • Housing
  • Export credit
  • MSME's
  • What are the eligibility criteria for the NSIC subsidy?
  • MSME with turnover between Rs.30 lakh to Rs.200 crores can apply for loans.
  • There should be a track record of the successful operation of the business for 3 years.
  • You have to give a viability report about raw materials, finished goods.
  • You have to give your business details to the bank to show future growth chances of your business.
  • You have to provide a loan repayment record in case you have taken any loan previously.
  • You should have a good CIBIL score.
  • MSMEs are not required to provide any collateral security if the loan amount is up to Rs.10 lakh.
  • This limit can be increased up to Rs.25 lakh for MSMEs with a good track record.
  • What are the documents required for the NSIC subsidy?
  • Documents required for the NSIC subsidy are similar to those required in the Mudra loan.
  • Financials are mainly required according to the loan amount and terms and conditions.
  • 5. Credit Link Capital Subsidy Scheme for Technology Upgradation
  • The objective of this scheme is to improve technology such as plant and machinery.
  • You will get a subsidy of 15% on loan amount not exceeding Rs.1 crore.
  • This subsidy is provided to small and medium business owners who make products related to 51 government-approved sectors.
  • Also, 10% of the additional subsidy is provided to SC/ST category entrepreneurs.
  • This scheme also covers 117 special districts including hill stations and the northeast region.

  • Technology up-gradation means :
  • Using better technology compared to present technology
  • Improved productivity and product quality
  • Positive impact on the environment by controlling pollution
  • Inhouse testing technique
  • What are the eligibility criteria for the loan?
  • Sole proprietorship, partnership cooperative societies, private and public limited companies can avail of this facility.
  • All of them must be falling under SSI (small scale industries) sector.
  • Priority will be given to women entrepreneurs.
  • A 15% subsidy will be given to banks loan approved after 29 September 2005.
  • You can avail of this subsidy in case you have rented machinery under the hire purchase scheme.
  • Labour intensive can reap the benefits of this scheme.
  • Export-oriented new sectors can also reap the benefits of this scheme.
  • 2 Points that disqualify you from this scheme :
  • If you are replacing existing technology with similar technology, you cannot avail of the benefits of this scheme.
  • If you are upgrading with second-hand machinery, you cannot avail of the benefits of this scheme.
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