Since the start-up India campaign, there has been a substantial surge in the number of new start-ups. As per data dated 31st January 2022, India stands as the third-largest start-up ecosystem globally.
To run one’s business smoothly, enough capital is necessary, but as a new business owner, one might not have enough funds. To ease a situation as such, one can avail an online business loan from a financial institution.
Some of the top business loan ideas for beginners in India are mentioned as follows:
- Stand up India scheme
This scheme offers business startup loans from Rs.10 Lakhs to Rs.1 Crore to scheduled castes, scheduled tribes, and women borrowers of greenfield enterprise owners. However, borrowers should be aware that this loan is only available for greenfield projects.
Individuals who do not have any form of debt with any financial institution stand eligible for this scheme. Furthermore, this business loan is available in a composite format. It is inclusive of working capital and term loan. This scheme covers up to 85% of the project cost, and the borrower must repay within 7 years.
- Pradhan Mantri Mudra Yojana
In 2015, Prime Minister Narendra Modi launched the Pradhan Mantri Mudra Yojana scheme. Also called Mudra loans, it is one of the most common online business loan options. Here, borrowers can get a loan of up to Rs.10 Lakhs.
Borrowers of small-scale, medium-sized, and non-corporate businesses are eligible to get business start up loans. Under this aegis, three different products are available. The ‘Shishu’ product offers borrowed funds of up to Rs.50,000, and ‘Kishore’ covers loans over Rs.50,000 up to Rs.5 Lakhs. On the other hand, ‘Tarun’ covers loans exceeding Rs.5 Lakhs up to Rs.10 Lakhs. This business loan is available for individuals aged between 18 to 65 years against an affordable interest rate without any third-party security.
- Market development assistance scheme
The Indian Government’s Ministry of Commerce currently operates the Market Development Assistance Scheme. It is one of the most efficient financing solutions for MSMEs. This scheme mainly aims at funding international fairs, publicity, trade delegations, study tours abroad and relevant others.
MDA for small-scale business units for one’s sales-cum-study tours, exhibitions, publicity, and for participation in fairs; this scheme offers direct assistance. Apart from these, the primary objective of the market development assistance scheme is quite unique and includes the following:
- To increase the participation of small and micro manufacturing enterprises, those are under MSME India to stall at international trade exhibitions or fairs.
- To encourage exporters (small and micro) to develop markets overseas.
- To encourage export from micro and small manufacturing units.
- To enhance large-scale barcoding adoption.
Funds offered under this scheme include:
- Business loan for contesting or initiating anti-dumping cases by MSME associations.
- Sector-specific market studies by Federation of Indian Export Organisation/ Industry Associations/ Export Promotion Councils.
- Participation of small and micro manufacturing enterprises in exhibitions under the MSME India stall or International Trade Fairs.
- Reimbursement of 75% of the annual fees paid to EAN India during the initial 3 years for bar code and 75% of the registration fees.
Apart from these, a borrower should also check out the pre-approved offers offered by financial institutions to their existing customers. These pre-approved offers are available on different products, including personal and business loans. Borrowers of business loan can check their pre-approved offers by simply entering their names and contact details.
In a nutshell, the abovementioned business loan ideas can help beginners fund a new business easily. It is recommended that borrowers get ready with all the documents required to avail of any of these online business loans. Furthermore, borrowers should also consider the pros and cons of these financial options before choosing one.