Due to the increasing demand for business loans in the Indian, the Government has launched several subsidy and loan schemes backing the entrepreneurs of the country to run small yet successful businesses. Let’s discuss the top 3 government schemes for entrepreneurs.

Best Government Loan Schemes for Small Business in India

Fiscal incentives: Here are some details of the scheme:

This MSME scheme for entrepreneurs includes term loans and/or working capital loan facility up to Rs. 2 crore, per borrowing unit
The warranty coverage provided is up to 75% of the line of credit up to Rs. 1.5 million rupees
85% of the credit line for loans of up to Rs. 5 Lakh is provided to micro-enterprises
80% of the credit line for women-owned / operated MSMEs and all loans to the Northeast Region, including Sikkim
For MSME retail, the warranty coverage is 50% of the amount in default subject to a maximum of Rs. 50 Lakh
SIDBI Make in India Soft Loan Fund for MSMEs (SMILE)
Launched in 2015, SMILE is governed by the Small Industries Development Bank of India (SIDBI). The aim of this scheme is to provide soft loans, to meet the required debt-equity ratio for the establishment of new MSMEs and also to enable the growth for existing ones. The interest rate offered under the SMILE scheme is 8.36% onwards.

Eligibility: New companies on board together with existing manufacturing and service sectors can apply for this scheme. Existing companies making an upward gradation or starting other projects to expand their businesses will also be covered by this scheme. The maximum repayment tenure of the loan is 10 years with a 36-month moratorium period.

Fiscal incentives:

The loan amount offered under SMILE scheme is minimum Rs. 25 lakh and onwards
Stand-Up India
Governed by Small Industries Development Bank of India (SIDBI), Stand up India was initiated to provide funding to people who come under SC/ST category and women entrepreneurs. This scheme provides bank loans between Rs. 10 lakh and Rs. 1 crore to at least one SC/ST borrower and one woman borrower per bank branch.

Eligibility: Enterprises in trading, manufacturing, or service sectors are considered eligible for this scheme. In the case of non-individual enterprises at least 51% of the shareholding stake should be with an SC/ST or woman entrepreneur.

Fiscal incentives:

It offers composite loans between Rs. 10 lakh to Rs. 1 crore to cover 75% of the project, inclusive of the term loan and working capital
The specification of the loan being expected to cover 75% of the project cost. It won’t be applicable if the borrower’s contribution along with convergence support comes from any other schemes exceeds 25% of the project cost
The rate of interest would be the lowest applicable rate – (Base Rate (MCLR)) + 3% + Tenor Premium
Bank Credit Facilitation Scheme
Headed by National Small Industries Corporation (NSIC), the scheme aims to meet the credit requirements of MSME units. The NSIC has entered into a Memorandum of Understanding (MoU) with various nationalized and private sector banks for the purpose. Through syndication with these banks, the NSIC arranges for credit support (fund- or non-fund-based limits) from banks without any cost to MSMEs.

Eligibility: MSMEs registered in India

Fiscal incentives: NA