Best Government Business Loan Schemes in India (2025)
If you're looking to start or grow your business, the Indian government offers several business loan schemes that are designed just for you. Whether you're a small shop owner, a startup founder, or running a local manufacturing unit, these government business loans offer quick funding, often without needing collateral.
These are not just regular loans they’re PM business loan schemes and MSME loan schemes for new businesses that come with low interest rates, simple paperwork, and faster disbursal compared to banks.
MSME Loan in 59 Minutes
While starting out, individuals often face challanges getting a MSME business loan. MSME Loan in 59 Minutes is one of the fastest government business loan schemes. You can get loan approval within an hour—ideal for those who need working capital or want to scale quickly.
- Loan: Up to ₹5 crore
- Interest: Starts from 8.5%
- Approval: Within 59 minutes
- Requires: GST, IT returns, and bank records
This is perfect for small businesses and MSMEs that want a quick, collateral-free loan under a government subsidy loan for business model.
Pradhan Mantri MUDRA Yojana (PMMY)
Known as the most popular PM loan scheme for business, MUDRA provides three types of loans—Shishu, Kishore, and Tarun—to suit businesses at different growth stages.
- Shishu: Up to ₹50,000
- Kishore: ₹50,001 to ₹5 lakh
- Tarun: ₹5 to ₹10 lakh
It’s a fully collateral-free government business loan, widely used by traders, shopkeepers, and gig workers.
CGTMSE – Credit Guarantee Scheme
This govt loan scheme for business makes it easy for MSMEs to borrow without offering property or equipment as security.
- Loan: Up to ₹5 crore
- Coverage: 75% to 85% guarantee by the government
- For: Manufacturing, services, and trading units
It acts as a government subsidy loan for business by reducing lender risk, especially useful for first-time borrowers or businesses without assets.
PMEGP – Prime Minister’s Employment Generation Programme
If you are starting a new business or small factory, PMEGP acts like a startup loan by government. You get funding and subsidy to begin operations.
- Loan: Up to ₹50 lakh for manufacturing
- Subsidy: Up to 35% depending on location and category
- For: New entrepreneurs aged 18+, minimum 8th-grade pass
It’s one of the most useful MSME loan schemes for new business owners who want support beyond just money.
SIDBI SMILE Scheme
SIDBI’s SMILE offers loans for business growth, especially if you’re upgrading equipment or expanding into a new product line.
- Loan: Starts from ₹10 lakh
- Tenure: Up to 10 years
- Focus: 'Make in India' businesses, new-age MSMEs
It supports startups and growing enterprises that fall under the government business loan scheme umbrella.
Stand-Up India Scheme
This PM business loan scheme is focused on helping women and SC/ST entrepreneurs set up greenfield (first-time) businesses.
- Loan: ₹10 lakh to ₹1 crore
- Use: For trading, manufacturing, or service
- Eligibility: First-time entrepreneurs
Aimed at creating equal opportunities, this is a strong example of a government business loan for first-time borrowers.
PM SVANidhi – For Street Vendors
This scheme is part of government subsidy loan for business efforts targeting very small businesses like vegetable vendors, tea sellers, and cart-based shops.
- First Loan: ₹10,000
- Next: ₹20,000 and then ₹50,000 (on timely repayment)
- Benefit: 7% interest subsidy
For many, this is their first experience with a startup loan by government that builds their credit history. A good credit history eventually builds a good credit score. Check your credit score for free!
PM Vishwakarma Scheme
For carpenters, blacksmiths, masons, and other skilled artisans, this scheme offers a mix of government business loans, training, and market access.
- Loan: Up to ₹1 lakh
- Tools Voucher: ₹15,000
- Training: With daily stipend
- Interest: 5% only
Ideal for traditional businesses that want to modernize or scale, especially in semi-urban and rural areas.
Summary of Key Points
- Government business loans offer easy funding with minimal paperwork
- Most are collateral-free or partially guaranteed by the government
- Special loan schemes exist for women, SC/STs, artisans, vendors, and startups
- PM and MSME-specific schemes help build and expand new businesses
- If you’re looking for a startup loan by government or a PM loan scheme for business, there’s likely one that fits your need