Smart Business loan options

Smart Business loan options

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Many people dream of starting their own business. On the other hand, business owners dream about expanding their existing business. But to fulfil their dream, all people face the same problem – shortage of funds. Having an option to apply for business loan online is a good idea. 

The best way to arrange funds for your business is to take a loan. But the loan granting process is very tedious and people face many hurdles, such as severe credit history, documentation prerequisites, high-interest rates, etc. that makes people think twice before applying for the loan.

For small-scale businesses, we have listed down the five best ways that you can choose to take a loan for your business.

MSME Loan

In September 2018, the government launched the ‘MSME Business Loan within 59 Minutes’ scheme to make the loan granting process very easy and smooth for the people who want to start a small business. The scheme offers financial assistance of up to 1 crore rupees to both new and existing ventures. The entire process takes 8-12 days to issue the amount. But as the name of the scheme suggests, it takes only 59 minutes to decide whether they want to approve the loan application or to reject it.

To apply for a loan in this scheme, the documents you need to have are:

  1. Business Registration Proof
  2. KYC documents of the business entity
  3. Bank statement for the last 9 months

MUDRA LOANS 

MUDRA is an acronym for Micro Units Developments and Refinance Agency. The organization was established by the Indian government to fund the small ventures, which are ignored by the banks and left on their own. The MUDRA loans are given to micro and small businesses working in the area of services, trading, and manufacturing.

Under this scheme, you can take a loan under these three categories in which your business lies:

  • Shishu Loans for loan amounts up to Rs 50,000
  • Kishore Loans for loan amounts up to Rs 5,00,000
  • Tarun Loans for loan amounts up to Rs 10,00,000

NATIONAL SMALL INDUSTRIES CORPORATION SUBSIDY

The NATIONAL SMALL INDUSTRIES CORPORATION SUBSIDY provides two monetary advantages to small ventures – Marketing Assistance and Raw Material Assistance. Under this help from the NSIC, the business owner gets the benefit of covering both imported and indigenous raw materials.

The subsidy under this scheme really helps the small and medium ventures to extend and improve the quantity and quality of products and services in terms of manufacturing.

CREDIT GUARANTEE FUND SCHEME FOR MICRO AND SMALL ENTERPRISES

Started in the year 2000, the Credit Guarantee Fund Scheme for Micro and Small Enterprises is there to provide financial help to micro and small businesses. The scheme fulfils the quality standards of both, new and existing ventures, and makes them eligible for collateral-free credit. The business owners can get a loan of up to 10 lakhs with no collateral.

To get a loan of above 10 lakh rupees and up to 1 crore rupees, the authority demands essential security or mortgage of land, building-related with the structure which can be acquired, or any other qualified records. The government has covered public and private area banks to implement the scheme and finance loans for the businesses.

CREDIT LINK CAPITAL SUBSIDY SCHEME FOR TECHNOLOGY UPGRADATION

The scheme encourages and financially helps small ventures to adopt new technology and upgrade their equipment. This technological up-gradation helps the ventures to enhance the productivity, advertising, supply network among other things. The scheme decreases the production cost and gives the business owners a competitive edge in the national and international markets.

To the qualified businesses, the CLCSS provides a direct front capital endowment of 15%. However, the maximum amount a business owner can get under this scheme is Rs 15 lakhs. This business loan scheme covers sole proprietorship, partnerships firms, co-operative, and public and private limited.

Conclusion

In a country like India, where a large population is working hard to start their own ventures, the government is providing help to a great extent to every seeker. With the above-mentioned schemes, today it is easier than ever before to start small and medium businesses in India and contribute significantly to the country’s growth. 

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