Did you know that India’s MSME (Micro, Small, and Medium Enterprises) sector is a significant contributor to its rapid socio-economic development? There are approximately 6.3 crore MSMEs today, generating turnovers of over Rs. 300 crores. The startup industry isn’t lagging either. Some 3,000 startups are emerging per year and are predicted to create over 2.5 lakh jobs in the coming years.

India’s entrepreneurial spirit is undying. However, there’s one roadblock that poses quite the problem: capital shortage. To tackle this head-on, our government has launched numerous projects for funding small-to-medium businesses.

So, if you are a business owner looking for funding options, here are the top government schemes for MSMEand startups you can consider.

1. Pradhan Mantri Mudra Yojana

The Pradhan Mantri Mudra Yojana or MUDRA scheme is a unique credit scheme that offers low-interest business loans to MSMEs and startups in the non-corporate and non-farming sectors.

Under this scheme, you can avail of three types of loan products:

  • Shishu category – A loan of up to Rs. 50,000 is available for startups and small businesses in their initial stages under this category.
  • Kishor category – Mid-aged businesses looking to expand operations can avail up to Rs. 5,00,000 under this category.
  • Tarun category – Under this category, experienced businesses can avail up to Rs. 10,00,000.

Additional Read: What is the PMMY Scheme?

2. Raw Material Assistance

Headed by the NSIC (National Small Industries Corporation), the Raw Material Assistance programme is a fruitful government scheme for startupsand MSMEs. It offers financial help through lender guarantees, credit facilitation, and bill discounts. The government takes care of all the paperwork. In turn, businesses get the necessary funds for bulk purchases of raw material and focus solely on manufacturing.

3. CGT SME

The Credit Guarantee Trust Fund for Micro and Small Enterprises (CGT SME) is one of India’s largest startup funding schemes provided by the Ministry of MSME. Under this scheme, eligible MSMEs and startups can obtain a collateral-free loan of up to Rs. 1 crore through the Ministry of MSME and Small Industries Development Bank of India (SIDBI). To know more about this CGT SME business loan eligibility, terms and conditions, etc.

4. CLCSS Scheme

The Credit Linked Capital Subsidy Scheme (CLCSS) for Technology Upgradation is a government loan scheme for tech startups. Here, the Indian Government offers capital to help MSMEs and startups upgrade their tech equipment and provides a 15% subsidy for investments of up to Rs. 1 crore. For this, MSMEs/startups must get a term loan from a lender through the CLCSS scheme.

Additional Read: What Is Credit Linked Subsidy Scheme? How Does It Work?

Apply with Tata Capital!

If you are actively looking for business capital, Tata Capital offers attractive loans for startups and MSMEs. With us, you get structured EMI plans, minimal paperwork, simple eligibility terms, and an array of exclusive benefits.

Our business loan interest rates start at just 19%, offering you maximum affordability for hassle-free financing. Explore our diverse loan products here.

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