A government subsidy loan for business is a financial aid program aimed at supporting entrepreneurs and small business owners. These loans often come with lower interest rates and favorable terms, making a government subsidy loan for business an attractive option for expansion, equipment purchase, or operational costs. By offering these benefits, a government subsidy loan for business helps reduce financial burdens and stimulates economic growth in local communities.
Low Interest AND Flexible Loan Amounts : Government-funded loans often come with lower interest rates compared to traditional loans, making them more affordable for borrower. Borrowers can often access a range of loan amounts to suit their needs, whether it's a small business loan, student loan, or housing loan.
Varied Loan AND Credit Flexibility : These loans can be used for a variety of purposes, such as starting or expanding a business, education expenses, purchasing a home, or agricultural needs. Some government loans have more flexible credit requirements, making them accessible to borrowers with lower credit scores or limited credit history.
Longer Repayment Terms WITH No Collateral : Many government loans offer longer repayment terms, spreading out payments over a more extended period to reduce monthly burdens.
Some government loans, especially for small businesses or education, do not require collateral, making them more accessible to borrowers without substantial assets.
Subsidized Interest Rates : Certain government loans, such as student loans, may have subsidized interest rates, meaning the government pays the interest while the borrower is in school or during other qualifying periods.
Support for Underserved Communities : • Government-funded loans often focus on providing financial support to underserved communities, promoting economic development and stability.
Once an enterprise is registered as an MSME, it is eligible for numerous benefits provided by the Government. Few of them are mentioned below:
government subsidy loan for business
lower interest rates
subsidy on patent registration
subsidy on patent registration
electricity bill concessions
reimbursement of ISO certification
Collateral-free bank loans, etc.
Read on to know the criteria required to apply for our Government Funded Loan.
Affordable Financing : Lower interest rates and flexible terms make government loans an affordable option for borrowers compared to traditional loans.
Accessible to a Wide Range of Borrowers : Government loans are often designed to be accessible to borrowers who may not qualify for conventional loans due to credit history, income level, or other factors.
Promotes Economic Growth : By providing funding for businesses, education, housing, and other essential needs, government-funded loans contribute to economic growth and job creation.
Helps Small Businesses Thrive : Small business loans from the government support entrepreneurship and help small businesses grow and create jobs in the community.
Reduces Financial Stress : With lower interest rates, longer repayment terms, and forgiveness programs, government loans can reduce financial stress for borrowers, allowing them to focus on their goals.
• Shishu : covering loans up to Rs. 50,000/-
• Kishor : covering loans above Rs. 50,000/- and upto Rs. 5 lakh
• Tarun : covering loans above Rs. 5 lakh and upto Rs. 10 lakh
Businesses/entrepreneurs/units covered would include proprietorship/partnership firms running as small manufacturing units, shopkeepers, fruits/vegetable sellers, hair cutting salons beauty parlours, transporters, truck operators, hawkers, co-operatives or body of individuals, food service units, repair shops, machine operators, small 184 industries, artisans, food processors, self-help groups, professionals and service providers etc. in rural and urban areas with financing requirements up-to Rs.10 lakhs.
Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE)
Description Ministry of Micro, Small and Medium Enterprises, GoI and Small Industries Development Bank of India (SIDBI), established a Trust named Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) to implement Credit Guarantee Fund Scheme for Micro and Small Enterprises. The corpus of CGTMSE is being contributed by GoI and SIDBI. Nature of assistance Collateral free loans up to a limit of Rs.500 lakh - for individual MSEs Who can apply both existing and new enterprises are eligible under the scheme. How to apply Candidates meeting the eligibility criteria may approach banks/financial institutions, which are eligible under the scheme, or scheduled commercial banks and select Regional Rural Banks.
An EMI calculator is a useful tool that can help you estimate the monthly installments you will have to pay towards your Government Funded Loan within a specific period. By using the Noble Fintech Advisory EMI calculator, you can calculate your EMI beforehand, which can help you plan your finances better. Additionally, you can check your eligibility and compare different loan options using Noble Fintech Advisory Government Funded Loan calculator.
Micro Units Development & Refinance Agency Ltd. (MUDRA) loan is a Government initiated loan scheme managed under Pradhan Mantri Mudra Yojana (PMMY) to offer finance to non-corporate, non-farm small/micro-enterprises. Mudra loans can be availed from Private and Public Sector Banks, Non-Banking Finance Companies, Regional Rural Banks (RRBs), Small Finance Banks, Foreign Banks, and Micro Finance Institutions. Interested applicants can approach any of the above lending institutions or apply online through the official website. Mudra loans are majorly availed by business owners, small-scale businesses, startups, self-employed professionals, and MSMEs.
Collateral-free business loans
Competitive Interest Rates
Loan Amount up to Rs. 10 lakh
Nil Processing Fee
Zero prepayment charges
Repayment Tenure from 12 months to 5 years
Concessional Interest Rates for Women Entrepreneurs
The minimum age of the applicant should be 18 years and the maximum 65 years
Applicants with no past loan defaults with good repayment history
The Non-Corporate Small Business (NCSB) segment comprising individuals, MSMEs, and sole proprietorships/enterprise firms in rural and urban areas can also apply for the Mudra loan. Below mentioned are some examples of NCSBs:
• Small manufacturing units
• Service sector units
• Shopkeepers
• Fruits/vegetable vendors
• Truck operators
• Food-service units
• Repair shops
• Machine operators
• Small industries
• Artisans
• Food processors and many other business entities
Individuals, business owners, self-employed professionals and MSMEs engaged in the manufacturing, trading, and services sectors are eligible to apply for MUDRA loans. Loans under Govt. schemes for women entrepreneurs can also be availed under Mudra Yojana. Below stated are the types and loan amounts offered under 3 loan schemes under the Mudra loan:
Types of 3 Mudra loan schemes along with offered loan amount:
• Shishu: Loan Scheme: Up to Rs. 50,000
• Kishor: Loan Scheme: From Rs. 50,001 and up to Rs. 5,00,000
• Tarun: Loan Scheme: From Rs. 5,00,001 and up to Rs. 10,00,000
Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) scheme was launched by the Government to strengthen and facilitate the credit delivery system in the MSME sector. Public, private, and foreign banks along with Regional Rural Banks (RRBs) and the SBI with its associate banks are included in the lending institutions under this scheme. Under CGTMSE scheme, the ceiling for Guarantee coverage is raised from Rs. 200 lakh to Rs. 500 lakh
New and existing MSMEs engaged in manufacturing or service activities, excluding retail trade, educational institutions, agriculture, Self-Help Groups (SHGs), and training institutions are eligible for this scheme.
• MSME scheme for entrepreneurs includes term loans and/or working capital loan facility up to Rs. 5 crores, per borrowing unit
• Guarantee cover offered is up to 75% of the credit facility, up to Rs. 1.5 crore
• 85% of credit facility for loans up to Rs. 5 Lakh is offered to micro enterprises
• 80% of credit facility for MSMEs owned/operated by women and all loans to North Eastern Region, including Sikkim
• For MSME Retail trade, the guarantee cover is 50% of the amount in default subject to a maximum of Rs. 50 Lakh
• Step 2: Register on the portal and login through the One-Time Password (OTP) authentication
• Step 3: Agree to the ”Terms & Conditions” of the Government loan scheme
• Step 4: Enter your financial credentials and other information required
• Step 5: Proceed further and continue with filling out the forms and uploading the required documents
• Age of the applicant
• Applicant’s repayment history and financial stability
• Nature /Type and vintage of business
• Applicant’s credit score or Company’s credit rating
• Desired Loan amount and chosen repayment tenure
• Annual business turnover, ITR, P&L statement
• Capital Invested and goods/raw materials/equipment/machinery to be used
• Debts, existing loans, or any past defaults, etc.
Government loans are offered to individuals, startups, MSMEs, retailers, manufacturers, traders, sole proprietorships, partnership firms, business owners, public and private limited companies, large enterprises, etc. The minimum age criterion to apply for a government business loan is 18 years and maximum of up to 65 years. For the existing businesses/enterprises, the minimum business existence to apply for a loan is at least 1 year.
The documents required for these government schemes may vary from one scheme to another. However, to give you an idea of what documents might be required when applying for the schemes; we have listed a few common documents:
Duly filled application form along with passport-sized photographs
KYC documents: Applicant’s Identity, Age, and Address Proofs: Passport, Voter ID card, Aadhar Card, Driving License, PAN card, Utility Bills (Water & Electricity Bills)
Bank statements for the last 6 months, Last 1 year’s ITR
Business Establishment Certificate
Business Address and Vintage Proofs
Business PAN card, if applicable
Proof of belonging to SC/ST/OBC category, if applicable
Any other document required by the lender
Government-funded loans in India are financial assistance programs offered by various government bodies to support businesses, individuals, and specific sectors of the economy. These loans aim to promote economic growth, entrepreneurship, and development.
Eligibility criteria vary depending on the specific loan scheme and the government agency providing the funds. Generally, small and medium-sized enterprises (SMEs), startups, farmers, students, women entrepreneurs, and other specific groups may qualify for different loan programs.
In India, government-funded loans come in various forms such as Mudra loans for micro and small enterprises, Pradhan Mantri Awas Yojana (PMAY) for housing, Kisan Credit Card (KCC) for farmers, Stand-Up India for women and SC/ST entrepreneurs, and various state-specific schemes for businesses and individuals.
The benefits include lower interest rates, longer repayment tenures, reduced collateral requirements, and in some cases, interest subsidies or waivers. These loans also often come with flexible repayment options tailored to the borrower's financial situation.
There is no minimum limit to borrow from Banks/NBFCs under Govt. loan schemes. The minimum loan amount can be availed by Banks under Mudra Yojana under PMMY. However, the maximum loan amount can be availed is up to Rs. 2 crore (collateral-free).
To start a business you can apply for a Mudra loan scheme if the required loan amount is up to Rs. 10 lakh. Any government scheme offering business loans for startups will offer competitive interest rates with flexible repayment options. If in case the loan amount required is more than Rs. 10 lakh then you can directly approach the desired bank or NBFC to get a business loan. Interest rates offered by NBFCs are comparatively higher than public or private limited banks.
The maximum loan amount that can be availed for small businesses is up to Rs. 10 lakh under the Government loan scheme named MUDRA Yojana at lower interest rates. Higher loan amounts can be availed by applying with private and public sector banks or even with NBFCs.
Low Interest AND Flexible Loan Amounts : Government-funded loans often come with lower interest rates compared to traditional loans, making them more affordable for borrower. Borrowers can often access a range of loan amounts to suit their needs, whether it's a small business loan, student loan, or housing loan.
Varied Loan AND Credit Flexibility : These loans can be used for a variety of purposes, such as starting or expanding a business, education expenses, purchasing a home, or agricultural needs. Some government loans have more flexible credit requirements, making them accessible to borrowers with lower credit scores or limited credit history.
Longer Repayment Terms WITH No Collateral : Many government loans offer longer repayment terms, spreading out payments over a more extended period to reduce monthly burdens.
Some government loans, especially for small businesses or education, do not require collateral, making them more accessible to borrowers without substantial assets.
Subsidized Interest Rates : Certain government loans, such as student loans, may have subsidized interest rates, meaning the government pays the interest while the borrower is in school or during other qualifying periods.
Support for Underserved Communities : • Government-funded loans often focus on providing financial support to underserved communities, promoting economic development and stability.
Once an enterprise is registered as an MSME, it is eligible for numerous benefits provided by the Government. Few of them are mentioned below:
government subsidy loan for business
lower interest rates
subsidy on patent registration
subsidy on patent registration
electricity bill concessions
reimbursement of ISO certification
Collateral-free bank loans, etc.
Micro Units Development & Refinance Agency Ltd. (MUDRA) loan is a Government initiated loan scheme managed under Pradhan Mantri Mudra Yojana (PMMY) to offer finance to non-corporate, non-farm small/micro-enterprises. Mudra loans can be availed from Private and Public Sector Banks, Non-Banking Finance Companies, Regional Rural Banks (RRBs), Small Finance Banks, Foreign Banks, and Micro Finance Institutions. Interested applicants can approach any of the above lending institutions or apply online through the official website. Mudra loans are majorly availed by business owners, small-scale businesses, startups, self-employed professionals, and MSMEs.
Collateral-free business loans
Competitive Interest Rates
Loan Amount up to Rs. 10 lakh
Nil Processing Fee
Zero prepayment charges
Repayment Tenure from 12 months to 5 years
Concessional Interest Rates for Women Entrepreneurs
The minimum age of the applicant should be 18 years and the maximum 65 years
Applicants with no past loan defaults with good repayment history
The documents required for these government schemes may vary from one scheme to another. However, to give you an idea of what documents might be required when applying for the schemes; we have listed a few common documents:
Duly filled application form along with passport-sized photographs
KYC documents: Applicant’s Identity, Age, and Address Proofs: Passport, Voter ID card, Aadhar Card, Driving License, PAN card, Utility Bills (Water & Electricity Bills)
Bank statements for the last 6 months, Last 1 year’s ITR
Business Establishment Certificate
Business Address and Vintage Proofs
Business PAN card, if applicable
Proof of belonging to SC/ST/OBC category, if applicable
Any other document required by the lender
An EMI calculator is a useful tool that can help you estimate the monthly installments you will have to pay towards your Government Funded Loan within a specific period. By using the Noble Fintech Advisory EMI calculator, you can calculate your EMI beforehand, which can help you plan your finances better. Additionally, you can check your eligibility and compare different loan options using Noble Fintech Advisory Government Funded Loan calculator.
Government-funded loans in India are financial assistance programs offered by various government bodies to support businesses, individuals, and specific sectors of the economy. These loans aim to promote economic growth, entrepreneurship, and development.
Eligibility criteria vary depending on the specific loan scheme and the government agency providing the funds. Generally, small and medium-sized enterprises (SMEs), startups, farmers, students, women entrepreneurs, and other specific groups may qualify for different loan programs.
In India, government-funded loans come in various forms such as Mudra loans for micro and small enterprises, Pradhan Mantri Awas Yojana (PMAY) for housing, Kisan Credit Card (KCC) for farmers, Stand-Up India for women and SC/ST entrepreneurs, and various state-specific schemes for businesses and individuals.
The benefits include lower interest rates, longer repayment tenures, reduced collateral requirements, and in some cases, interest subsidies or waivers. These loans also often come with flexible repayment options tailored to the borrower's financial situation.
There is no minimum limit to borrow from Banks/NBFCs under Govt. loan schemes. The minimum loan amount can be availed by Banks under Mudra Yojana under PMMY. However, the maximum loan amount can be availed is up to Rs. 2 crore (collateral-free).
To start a business you can apply for a Mudra loan scheme if the required loan amount is up to Rs. 10 lakh. Any government scheme offering business loans for startups will offer competitive interest rates with flexible repayment options. If in case the loan amount required is more than Rs. 10 lakh then you can directly approach the desired bank or NBFC to get a business loan. Interest rates offered by NBFCs are comparatively higher than public or private limited banks.
The maximum loan amount that can be availed for small businesses is up to Rs. 10 lakh under the Government loan scheme named MUDRA Yojana at lower interest rates. Higher loan amounts can be availed by applying with private and public sector banks or even with NBFCs.
At Noble Fintech Advisory, we strive to help you go beyond the expected. We don't just offer loans; we provide financial solutions tailored to your needs. Our commitment to transparency, excellence in customer services, our innovative loan products ensures that you achieve your goals with confidence.
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