How To Improve Small Business Loan With Government Schemes
Most businessmen opt for a loan without security or collateral because of unsecured finances. Collaterals are available in various forms depending on the business as properties or machinery. It becomes the biggest nightmare of any start-up business because of company assets. The government has initiated such schemes for small business entrepreneurs for starting a business without worrying about losing collaterals. All small-scale industries are gradually promoted in the urban areas and between households where the business loan is given free without any collateral. Read more to know about the government schemes available and choose the best one for your business.
MUDRA Loan
The main reason behind initiating this scheme is to help the small business entrepreneurs who want to start a business but suffers from a lack of money. Adequate funds or loans are handed over to micro units and small businessmen for flourishing their companies. The bank which provides the loan works according to the customer’s requirements and does not charge any collateral. Rs 50000 are given to the business start-ups and up to Rs 5lakhs based on needs. The distribution of loans is based upon three categories namely Shishu, Kishor, and Tarun.
Stand-Up India
This scheme is specially initiated for the SC/ST caste and young women entrepreneurs of the country. Banks can help them with business loan money ranging from Rs10lakhs to 1crores for starting their trading or manufacturing sectors. The principal amount needs to be repaid within 7 years. Due to lack of money, many talented women cannot fulfill their wishes so this scheme encourages them.
Credit Guarantee Fund Trust
This scheme is not only limited to new businesspersons but also existing ones. The Fund Trust covers providing money to old enterprises and those who need it. However, the distribution is based on the given eligibility and viability of start-ups. The highest amount of loan is 1crore without any collateral. Banks eligible under this scheme include commercial banks, public banks, private banks, foreign banks, and many more. All these are categorized under the NABARD.
Market Development Assistance
Apart from the large businesses, the micro and small enterprises suffer a lot for their less popularity. This scheme focuses on bringing out their best potential and exposing them to the outer world. The products are advertised in foreign trade markets and fairs uniquely. All the small businesses should become strong enough to compete with big companies in the market. Businesspersons are eligible to receive a reimbursement of 75% for the registration fee and annual fees. The scheme is eligible for the first 3years.