India has around 40 million Micro, Small, and Medium Enterprises (MSMEs), both registered and unregistered. The government offers certain financing initiatives to help small and medium-sized businesses. These loans are largely intended to benefit the less fortunate and middle class groups of society. Finaxis post discusses the top five government lending packages for small enterprises in India.

1. MSME Business Loans

The MSME business loan is one of several loan programs introduced by the government in September 2018. The loans provided under this program are meant to increase financial assistance for national development while also encouraging local business expansion. The program allows new and established businesses to take advantage of the financial assistance it provides. The strategy is dubbed “MSME business loan in 59 minutes” since it secures credit approval within 59 minutes.

Benefits

These schemes offer loans of up to Rs. 1 crore and require 8 to 12 days to complete. The interest rate will be determined by the type of firm involved in the loan application. The loan amount granted under this scheme ranges from 1 lakh to 5 lakh, at an interest rate of 8.5%.

Eligibility criteria

To be eligible for a loan under this program, you must meet the following requirements:

• GST Confirmations
• IRS tax-related
• documents
• The most recent six
• months of bank
• statements
• ownership-related records.
• KYC specifics.

2. MUDRA Loans.

The MUDRA loans are approved by the Micro-Units Development and Refinance Agency, an entity established by the Indian government to offer financing to micro-business units. The guiding premise of MUDRA loans is to “fund the unfunded”. MUDRA loans are available through all bank branches in India. These loans were crucial in inventing the concept of low-cost financing for small and medium-sized businesses. MUDRA loans are classified into the following categories:

• Loan Category & Benefits
• Shishu Loan: Up to 50,000 INR Kishor Loan: 50,000 INR – 500,000 INR
• Tarun Loan: 5,000-10,00,000 INR.

Eligibility criteria

This program accepts credit applications from all businesses, including sole proprietorships, partnership firms, private limited liability corporations, publicly traded companies, and other legal entities.

3. The Stand-Up India Scheme

The government launched the Stand-up India program to provide loans to women, Scheduled Castes, and Scheduled Tribes business owners. This initiative is managed by the Small Industries Development Bank of India (SIDBI).

Benefits

The loan amount provided under this scheme may range between Rs. 10 lakh and Rs. 1 crore. This loan must be given to at least one woman entrepreneur or member of a Scheduled Caste or Scheduled Tribe from each bank. This loan is intended to cover roughly 75% of the project’s total cost.

Eligibility Criteria

Companies operating in manufacturing, commerce, or other service-related industries can apply for loans under this program. If the company is not a sole proprietorship, at least 51% of the assets must be owned by a woman or a member of a Scheduled Caste or Scheduled Tribe.

4. Udyogini.

A program named Udyogini, which translates as “women empowerment,” has been launched to educate Indian women. The Women Development Corporation, on behalf of the Indian government, launched the program. Cash offered through this program supports women in obtaining the cash they require to start a business.

Benefits & Eligibility

Under this program, the lender can only make loans of up to Rs. 15,00,000. A woman entrepreneur must be between the ages of 18 and 55 to be eligible to qualify for this program, and her family’s annual income cannot exceed Rs. 15,00,000. Upper-income restrictions do not apply to physically disabled or widowed women. This program’s loans have no processing fees or collateral restrictions.

• Documents required: passport-sized photographs.
• Birth certificate
• A card indicating that they fall below the federal poverty line
• Required documents: Aadhar card and proof of caste.
• A passbook or bank account.
• A Ration Card
• Proof of their income

5. Credit Guarantee Fund Scheme for Micro and Small Businesses.

The Indian government has implemented a credit program that provides funding for MSME firms through unsecured loans. The program may provide loans to both new and established enterprises. The Credit Guarantee Fund Trust was established by the Ministry of MSMEs and Small Industries in order to run the CGFMSE program. This program may make cash flow loans of up to Rs. 200 lakhs available, with special consideration given to qualifying female entrepreneurs.