Traditionally, setting up a new business and getting a startup business loan has been a major challenge in India. Entrepreneurs often have to run from one office to another, getting stuck in time-consuming bureaucratic processes and handling reams of paperwork. 

With the introduction of the Udyog Aadhar, new businesses can now register as a Micro, Small and Medium Enterprise (MSME) with the government and become eligible for various schemes and incentives on offer.

One among them is the facility to avail of an MSME Udyog Aadhar loan. The loan is disbursed via various government-sponsored channels, banks and financial institutions. Applying for a loan via Udyog Aadhar is simple, the paperwork is minimal, and you do not need to offer any collateral for the loan either.

Additional Read: Why Is MSME Loan the Perfect Finance for Small Business Owners?

Types of Udyog Aadhaar loans

Keeping in mind the varying needs of different businesses, Udyog Aadhaar loans are available through different financing agencies depending on the type of business and the loan requirement.

MUDRA loans

The Micro Units Development Refinance Agency or MUDRA scheme is a government-sponsored agency that disburses loans through other banks and NBFCs. These loans are classified under three categories:

  • Shishu loans: up to Rs 50,000
  • Kishor loans: up to Rs 5 lakh
  • Tarun loans: up to Rs 10 lakh

SIDBI loans

SIDBI loans

Businesses that have scaled up to a certain level can get financing for capital expansion, meet working capital needs from the Small Industries Development Bank of India. SIDBI offers loans ranging from Rs 10 lakh for operational needs to Rs 25 lakh for equipment financing.

ASPIRE

The National Small Industries Corporation has initiated ‘A Scheme for Promoting Innovation, Rural Industry & Entrepreneurship (ASPIRE)’ for agro-based businesses. Businesses registered with a Udyog Aadhaar can get loans up to Rs 1 crore for infrastructure development and up to Rs 50 lakh for setting up plant and machinery.

There are a host of other government-sponsored and private financial schemes that can be availed with Udyog Aadhaar, such as:

  • Credit Guarantee Trust Fund for Micro & Small Enterprises (CGTMSE)
  • Coir Industry Technology Upgradation Scheme (CITUS)
  • Entrepreneurial and Managerial Development of SMEs through Incubators
  • Lean Manufacturing Competitiveness for MSMEs
  • Entrepreneurial and Managerial Development of SMEs through Incubators
  • Credit facilitation through Banks
  • Marketing Assistance Scheme

Additional Reads: 5 Simple Ways to Improve Your Chances of Getting a Small Business Loan

Final words

Udyog Aadhaar is invaluable to any MSME. If you need financing as an MSME business owner, it is compulsory to have a Udyog Aadhaar, which is used as an identity proof of business to apply for such loans. You can easily apply for Udyog Aadhar online and benefit from the various financial schemes. 

To provide impetus to the growth and welfare of Indian entrepreneurs, Tata Capital also offers collateral-free loans to new businesses in the MSME segment.

The small business loan is available from Rs 5 lakh to Rs 75 lakh and can be tailored to suit your business needs. It offers structured repayment terms that allow you to repay the business loan EMI based on your cash flow at extremely competitive interest rates. Give your business the Tata Capital advantage and let your venture tread a smooth road to success.

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