All About Small Business Loans in India

Business | Know More 24 November 2021

The small and medium-sized enterprises in India, popularly known as SMEs, are the backbone of the nation’s socio-economic development. According to several reports, the SMEs have employed millions of Indians and contribute 30% to the nation’s GDP, making it extremely crucial for the country’s development.

Despite having enough growth potential, the SME sector tends to lag majorly due to a lack of funds and other difficulties. To cope with this problem, the Government of India has come up with the idea of small business loans for budding entrepreneurs and potential businesspersons to help this sector grow.

All About Small Business Loans in India

Key features:

  1. Faster Approvals:
    A businessperson, either small or big has many tasks lined up to be completed. In this case, running around the city to get his business loan sanctioned can be challenging and tiring. To avoid this situation, small business loans are approved comparatively faster than any other loans, and the quick and hassle-free process takes care of the individual’s convenience.
  2. Provision of unsecured loans:
    A secured business loan is a loan against property. Still, the small-scale businessmen who do not have collateral to offer can now opt for unsecured business loans that provide funding without security. However, only some banks have the provision of unsecured business loans due to a high-risk factor.
  3. Easy assessment:
    To save the individuals from the hassles of visiting several banks and offices while learning about the schemes, all the plans are available online. Now a business person can analyze them easily.
  4. Minimal documentation:
    One of the major features of a small business loan is that it requires minimal documentation and gives pace to the process to make the business avail of the funds as soon as possible. Moreover, top banks provide dedicated 24/7 support to their clients to help them with their queries.

Small business loan schemes available in India:

  1. MSME business loans:
    A small business loan scheme that is launched by the government to provide financial assistance to both the upcoming and prevailing businesses of the country. The purchaser can opt for a loan amount up to INR 5 lakhs at interest rates starting from 8.5%. This loan gets approved within a very short time of 59 minutes. However, it takes up to 8 days to complete the process.

    Eligibility:
    • Any businessman or entrepreneur can apply for a 59-minute loan.

  2. Mudra loans:
    With the concept to “ fund the unfunded”, the MUDRA loans are offered by the Micro Units Development and Refinance Agency of India to help the micro and small businesses grow. MUDRA loans can be purchased from all the branches of public and private sector banks, regional rural banks, and corporate banks.

    Eligibility:
    • Partnership firms
    • Public companies
    • Small food processing units
    • Manufacturing units
    • Private firms
    All other legal entities like these can apply for a MUDRA loan.

  3. Credit Guarantee Fund Scheme for MSMEs:
    A small business loan scheme launched by the government of India wherein there is no requirement of collateral to avail the funds. This provision of unsecured loans can be availed by both the prevailing and new business entities that fall under the MSME category. This scheme offers working capital loans up to INR 10 Lakhs.

    Eligibility:
    The following can apply
    • Retail traders
    • Educational institutions
    • Training institutions

  4. Credit Link Capital Subsidy Scheme for Technology Upgradation:
    This CLCSS scheme is a government-designed business loan that will help business people upgrade their technologies by financing them. This is a credit-based scheme especially launched for the betterment of businesses based in rural and suburban areas. Under the CLCSS plan, individuals can avail of a 15% subsidy on eligible equipment.

    Eligibility:
    These are eligible to apply
    • Sole proprietorships
    • Partnership firms
    • Private, public, and cooperative companies

Business loans with PCHF:

Piramal Capital and Housing Finance has been financing the dreams of Indian citizens for over 40 years and has gained enough trust and goodwill over time. With PCHF you can purchase a customized business loan most quickly and easily that will take your business to another level.

Here’s how you can get a business loan from PCHF:

  1. Visit the company’s official website and read about the features and benefits of business loans
  2. Once satisfied click on the “Quick Apply” button and fill in your details on the next page.
  3. Submit the information and wait for an official response to get started.

Conclusion:

The SME sector still has much more to achieve and these affordable government launched schemes will fuel them financially. Now, every potential Indian businessman can easily assess and buy the best-suited business loan online.

Popular Blogs