Small and Medium Enterprises (SMEs) are mushrooming across industries in India. According to Indifi, SMEs are responsible for 40% of the country’s total exports, and these numbers are only growing. Despite that, only 16% of SMEs seek financing options from recognized financial institutions, indicates a report from Evoma.

That’s why, to aid their growth, the government provides several beneficial business loan schemes. In this article, let us look at the schemes available for SMEs in 2021.

MUDRA Loan under PMMY

Through this loan scheme, the government offers monetary support to non-corporate and non-farm small/micro-enterprises. However, their credit requirement should not exceed Rs. 10 lakhs. The interested applicants can apply through either the official website of MUDRA or approach private or public sector lenders, regional rural banks (RRBs), or small finance lenders.

Eligibility

  • To avail of this SME loan, the applicant must belong to the age group of 18-65 years
  • Must be a non-farm income-generating business in manufacturing, trading, and services

Types of MUDRA loan schemes

Shishu:

Loan amounts up to Rs. 50,000.

Kishor:

Loan amounts from Rs. 50,000 to Rs. 5 lakhs.

Tarun:

Loan amounts from Rs. 5 lakhs to Rs. 10 lakhs.

Stand-up India

The Stand-up India scheme, initiated by the Small Industries Development Bank of India (SIDBI), offers easy business finance to women and SC/ST entrepreneurs. This scheme’s loan offerings range from Rs. 10 lakhs to Rs. 1 crore. Applicants can apply directly at the bank branch, log on to the SIDBI’s Stand Up India portal, or connect with the Lead District Manager (LDM).

Eligibility

  • Women and SC/ST entrepreneurs over 18 years of age
  • For non-individual enterprises, women or SC/ST entrepreneur must hold 51% of the shareholding and controlling stake
  • The borrower shouldn’t be in default to any lender

Additional Read: How to Qualify for Startup India Action Plan

SIDBI Make in India Soft Loan Fund (SMILE)

Launched by the Small Industries Development Bank of India (SIDBI), this loan scheme provides lucrative business loan interest rates to new and existing enterprises. It offers soft loans to help new SMEs improve their debt-equity ratio. The maximum loan repayment tenure is ten years, and loan amounts up to Rs. 25 lakhs can be availed.

Eligibility

New and existing businesses in the manufacturing and service sectors can apply.

Credit Guarantee Scheme (CGS)

To strengthen credit facilities for SMEs, the government launched the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) scheme. Under this scheme, SMEs can avail of collateral-free loan amounts up to Rs. 2 crores. Lenders offer competitive business loan interest rates depending on the applicant’s project cost, profile, and business requirements.

Eligibility

New and existing MSMEs are eligible.

Additional Read: All You Need to Know About Credit Guarantee Fund Scheme for Micro and Small Enterprises

Conclusion

If you are an MSME seeking business finance, your search ends at Tata Capital. Avail of customized loan offerings, extended loan tenure, collateral-free funds, and attractive interest rates. Enjoy quick disbursal and hassle-free loan processing. Use our business loan EMI calculatorto get hold of your EMIs and interest payable, and smartly plan your future finances!

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