How to get Startup Business Loan in India?

A startup business loan in India is meant to support the financial hurdles of a new business. Startups and micro industries require funding to grow and manage the business. As a result, the business will thrive in the market. At the initial stage startups don’t have access to the funds in the market. Therefore governments have taken a step to provide funds and promote these industries. Startup business loans in India can be used towards things like working capital, the purchase of equipment, machinery, supplies, inventory, and furniture, and the purchase of construction equipment, etc.

What are the Criteria for Startup Business Loans in India?

Get a Startup business loan from a bank or a financial body to raise capital or expand your current business. The applicant should meet the requirements of the lenders. A few requirements are the applicant profile and documents. Below are some points:

1. Applicant Profile

The personal background of the applicant will be verified. If the Applicants have criminal backgrounds this will make them ineligible or delay the process. The age limit of the applicant should be 21 to 65.

2. Business background:

Outline the goals and the objectives of the business should be clear. The firm should not be five years old and it should be reregistered as private or partnership.

3. Business Plan/Project report:

A detailed and elaborate business plan should be submitted. It will give the lender a detailed overview of the startup idea. Get a perfect business plan/project report with Finline.

4. Financial statements:

Submit all the financial projections like balance sheets, profit and loss statements, and cash flow statements.

5. Legal documents:

Applicant should submit all the legal documents to prove the legality of the business.

6. Collateral:

Some government loans are collateral-free, also they help the applicant get more amount.

What are the documents required to take a Startup Business Loan in India?

Identity Proof – Passport, PAN card, Aadhaar card, driver’s license, or voter ID
Address Proof – Electricity bills, telephone bills, Passport, Aadhaarcard
Income Statement – Proof of stable income to be provided
Bank Statements – The last 6 months’ bank statement to be submitted
Photos – 2 copies passport size.
Financial statements audited by a CA for the past 2 consecutive years
IT returns for the last 2 consecutive years

What are the Government Loans for Startup Businesses in India?

If the applicant has all the above requirements ready, they need to identify the appropriate scheme offered by the government of India for entrepreneurs. Some of the popular schemes offered by the government of India for startups and MSMEs are as follows:

1. Credit Facilitation Scheme

This scheme is handled by the National Small Industries Corporation (NSIC). They target to meet the credit needs of the MSME units. The NSIC partnering with various banks to provide loans to the MSME units. The repayment tenure will range from 5 years to 7 years, with the possibility of extending it up to 11 years.

2. Pradhan Mantri Mudra Yojana (PMMY)

The Micro Units Development and Refinance Agency (MUDRA) launched PMMY in 2015. It aims at offering loans to all kinds of manufacturing, trading, and service sector activities. The loan categories under MUDRA are – Shishu, Kishor, and Tarun. The loan amounts range between Rs.50,000 and Rs.10 lakh.

3. Credit Guarantee Scheme

New and existing MSMEs engaged in service or manufacturing activities, excluding educational institutions, agriculture, retail trade, Self Help Groups (SHGs), etc., qualify for this. You can borrow up to Rs. 200 lakh under this scheme.

4. Startup India

This scheme extends loans to enterprises in manufacturing, trading, or services. Loans ranging between Rs.10 lakh and Rs.1 crore can be availed. You can repay the loans taken under this scheme within seven years.

5. Sustainable Finance Scheme

This scheme offers loans to industries that deal in green energy, renewable energy, technology hardware, and non-renewable energy. The government started this scheme to offer sustainable development projects.

About Finline!

Finline is an online platform for creating financial reports for getting bank loans and investments. It’s like ‘Canva’ but for financials. If you are an entrepreneur looking for a bank loan, you need to have a well-crafted project report. We, at Finline will help you with that. Our team will help you create a powerful business plan in ten minutes. That too in your language. Also all public and private sector banks working in India accept our project report. Click to create your report.

Micro Small Enterprise Funding Scheme – Tamilnadu

The Micro Small Enterprise Funding Scheme was initiated by the Government of Tamil Nadu to advance the growth and competitiveness of micro and small enterprises (MSE). The Tamil Nadu Industrial Investment Corporation Limited (TIIC) is charged with overseeing and executing this scheme. Even the Government of Tamil Nadu provides financial assistance under this MSE funding scheme. Moreover, to the New or Well-Known Units in Micro and Small Enterprises with an overall project outlay of Rs.50.00 lakhs.

What are the Objectives of the Micro Small Enterprise Funding Scheme, Tamilnadu?

The main objective is to the extension of financial assistance. To new/existing micro and small enterprise units with a cumulative project outlay of Rs.50 lakh. Other purposes are as follows:

Upgrading infrastructure facilities in new or existing MSE industrial zones through financial assistance provided.
For the creation of fixed assets in small businesses and small businesses (MSE). They are improving the growth of micro/small businesses through the advancement of technology. Also, the skills, and quality, access to markets, access to resources. Also, to increase the potential of the SMEs. By forming self-help groups, consortia, up-gradation of associations, etc. Construction of research centres, training centres, depots of raw materials, effluent disposal, complementary manufacturing methods, etc.

What are the Eligibility Criteria for the Micro Small Enterprise Funding Scheme, Tamilnadu?

The conditions for eligibility for financial assistance under the Micro / Small Enterprises Funding Scheme here: New micro and small-scale enterprises for the manufacturing, storage, or processing of products, regardless of location. Also, for service sector ventures such as hospitals, fast food restaurants, etc. Except for small road transport operators [SRTOs], and new micro and small-scale enterprises. Even the Tamil Nadu Current Micro and Small Scale Enterprises (MSE) Units. Moreover, the Service Businesses, Growth, Modernization, Gradation of Technology and Diversification are Important to all property, Partnership, and Limited companies like LLP.

The cost of a project under the Micro and Small Enterprises Funding Scheme never exceeds Rs.50 Lakh. Also, this amount is only for the new units. In respect of existing MSE units, the cost of the project never exceeds Rs.50. Lakhs. Under the Micro and Small Enterprises Funding Scheme, the allotment of the Loan depends on the type of user:

Firstly, subject to the project cost, a term loan of 80% is granted for new MSE units. That governs a maximum of up to Rs.40 lakhs.

Secondly, for existing MSE units, a term loan of 75% of the project cost. That governs to a maximum of Rs.37.50 lakhs.

The Minimum Promoter’s contribution to the Micro and Small Enterprises Funding Scheme is set at 20% of the project cost. But in Detail :

So, all the new units receive a Promoter’s Contribution of 20% of the Project Cost.

Also, the Promoter contributes 25% of the Project Cost to all the existing units.

What are the Documents Needed Micro Small Enterprise Funding Scheme, Tamilnadu?

KYC documents
Proof of ID: Aadhar card, PAN card, Passport, voter ID
Proof of residential address
Projected balance sheet/ Project report
Business address proof
Business registration Proof: – Partnership title / Certified copies of MOA / AOA
Bank statement 6 months ago( If existing unit)

In the above list, a Business plan also known as a project report is a crucial document when applying for a bank loan. The bank uses this document to analyze the overall feasibility, risks, financial viability, and potential of a project. A well-crafted and convincing project report increases the chances of loan approval. With Finline you can craft a compelling project report in less than 10 minutes. That too in your language. Also, all public and private sector banks working in India accept our project report. Click to create your project report.