Loan Schemes Many times, people do not take the risk of starting a business because of the fear of failure. Most of the time, a business does not succeed due to insufficient cash flow. With the help of mudra loans for women nowadays, people can start a business.
Most of the time, people feel that their country’s economy depends on big corporations. But in reality, the MSMEs play a major role in helping the country’s economy grow. When it comes to the Indian economy, the MSMEs are the core of it. Currently, this sector is known as the biggest job sector in India. But when people want to start a small business, they need funding.
For this reason, the Government of India has introduced a variety of loans schemes, such as a mudra loan for women. With the help of this loan, they can take the first step towards starting their own business. Let us now take a look at some of the loan schemes offered by the Government of India for small businesses.
Loan Schemes for small business
Pradhan Mantri Mudra Yojana
One of the most famous loan schemes that the Government offers to the public is the Pradhan Mantri mudra yojana. The word MUDRA stands for Micro Units Development and Refinancing Agency Ltd. This scheme was launched to provide financing to provide the non-farm and non-corporate micro-enterprises.
This type of mudra loan for women and startup businesses is available in public, private, commercial, regional, corporate, and small financing banks. When applying for this scheme, people can get up to Rs. 10 lakhs.
There are three different types of loans available known as Shishu, Kishor, and Tarun. People can go for a mudra loan online apply and get it from the comfort of their house.
Credit Guarantee Fund Scheme for Micro and Small Enterprises (CGFMSE)
Another type of loan that the Government offers to the public is CGFMSE. This scheme was introduced by the Government so that the MSME sector gets a collateral-free loan. This funding scheme offers people with a loan amount of up to Rs. 200 lakhs. Women get a special preference when applying for this loan.
National Small Industry Corporation
This scheme has the ISO certificate from the Indian Government enterprise under MSMEs. The main focus of this scheme is to promote the growth of MSMEs as it provides combined support services.
This surrounds marketing, financing, technology, and other allied services all around the nation. They offer different schemes such as marketing support schemes and credit support schemes.
The Ministry of MSMEs has launched this creative credit scheme and has the main focus to aid the technology up-gradation of MSMEs. They mainly focus on rural and semi-urban areas. When the business opts for this scheme, they can choose a 15% subsidy on investment in eligible machinery.
The maximum cap for this subsidy is Rs. 1 crore. With the help of these schemes, small-scale businesses can upgrade to the latest technologies. It also helps to boost the growth of rural industries that ultimately manufactures high-end products.
MSME loans in 59 minutes
This loan is also known as the PSB loan in 59 minutes and was launched by the Government of India that provides the business with a quick business loan portal. With this scheme, the small-scale business can get a loan from Rs. 1 lakh up to Rs. 5 crores in less than 59 minutes.
Every small-scale business has faced the issue with funding and found itself struggling to keep the business running. Having an adequate amount of resources can help small-scale businesses to stay in the market and thrive. But sometimes, due to a plethora of reasons, the business can fail due to insufficient cash flow.
The Government of India has introduced some of the best schemes for small-scale businesses. People often love to opt for these loan schemes as they provide the MSMEs with a low rate of interest. The rate of interest does not only depend on the loan amount. Other things also determine it, such as the company’s tenure, business module, and financial condition.
Most MSMEs also love the Government introduced loan schemes as it provides the borrower with tax benefits. According to the income tax act, the percentage of profit utilized to repay the loan can be exempted from the tax.
Apart from that, loan schemes introduced by the Government of India also provides the customers with flexible repayment option. Most of the time, businesses struggle to keep their cash flow stable and often face ups and downs. But these loan schemes have flexible repayment options, and the borrower can increase or decrease the EMI amount or the repayment tenure according to their convenience.
The micro-businesses get benefits from the loan schemes offered by the Government of India. By going through the various loan schemes offered by the Government, business owners can choose which one is suitable for them.