Startup Business Loan

The following are the key features and benefits of startup business loans:

• You don’t need any collateral or security to avail of a startup business loan.
• Startup business loans have flexible repayment tenure.
• The documentation requirement for business loans for startups is minimal.
• The funds are instantly disbursed to the bank account of the applicant.
• The applicable business loan interest rate depends on the applicant’s credit history.

Currently, with about 60,000 startups India has the third-largest startup ecosystem in the world. However, getting funding when the business is in its early stages can be very challenging. Also, the MSME sector in the country has limited access to formal credit. For this reason, the Government of India rolled out startup business loan schemes catering to the needs of startups and MSMEs.

Following are some of the most popular schemes of start-up business loans by Indian government:

Bank Credit Facilitation Scheme

This business funding for startups is headed by the National Small Industries Corporation (NSIC). It is targeted at meeting the business credit requirements of the MSME units. The NSIC has partnerships with various banks to provide loans to the MSME units. This loan can be repaid in a tenure ranging between 5 years and 7 years. However, in special cases, the tenure can be extended for up to 11 years.

Pradhan Mantri Mudra Yojana (PMMY)

This scheme was launched in 2015 and is headed by the Micro Units Development and Refinance Agency (MUDRA). It aims to offer business loans to all kinds of businesses in the manufacturing, trading, and service sectors. This MSME loan for startup scheme offers loans ranging between Rs. 50,000 and Rs. 10 Lakhs under three main categories i.e. Shishu, Kishor, and Tarun. Artisans, vegetable vendors, machine operators, shopkeepers, repair shops, etc. can avail of these loans to start a new business.

MUDRA Loan

MUDRA Loan for Startup offers loans up to Rs. 10 Lakhs at affordable interest rates under Pradhan Mantri Mudra Yojana (PMMY) without any collateral. The repayment tenure for a MUDRA loan is up to 5 years and it comes with zero processing fee. There is no limit on the minimum loan amount that can be borrowed under this scheme. The interest rate starts from 7.30% and may vary from lender to lender, depending on the applicant’s eligibility and business requirements.

Credit Guarantee Scheme (CGS)

This scheme is headed by the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE). This MSME loan for startup businesses can be availed by new as well as existing MSMEs involved in the service or manufacturing sector (excluding retail trade, educational institutions, agriculture, Self Help Groups, etc). A loan amount of up to Rs. 2 Crores can be borrowed under the scheme.

Start Up India

Start-Up India scheme or SIDBI loans for startups promotes new ventures or initiatives. 
Start-Up India facilitates bank loans between Rs. 10 Lakhs and Rs. 1 Crore to startups. Startup loan by the government provides various benefits to startup businesses like Single Window Clearance with mobile applications, an 80% reduction in the patent registration fees, a friendly Bankruptcy Code to ensure a 90-day exit window, elimination of red tape, self-certification compliance, and so on.

Stand-up India Scheme

Stand Up India Scheme is a type of government startup loan that aims at promoting entrepreneurship among SC/ST and women entrepreneurs in India. This scheme is a part of Start-up India and facilitates two entrepreneurial projects, one for each category (women and SC/ST) of entrepreneurs per bank branch.

Under this scheme, financial aid is provided through SIDBI with an initial amount of Rs. 10,000 Crores. A credit guarantee system under the National Credit Guarantee Trustee Company (NCGTC) would also be implemented, which acts as an operating agency for financial aid.

Sustainable Finance Scheme

This scheme is headed by the SIDBI (Small Industries Development Bank of India). This scheme is known for offering the best small business loans for startups and aims at providing loans to industries dealing in renewable energy, green energy, technology hardware, and non-renewable energy. The Indian government started this scheme with an aim to offer support to the entire value chain of cleaner production or energy efficiency and sustainable development projects.

psbloansin59minutes.com

The psbloansin59minutes.com is a digital platform that provides you access to business loans for establishing a business. Based on the eligibility criteria and other requirements of the borrower, a loan amount of up to Rs. 10 Lakhs can be availed under the Mudra Loan scheme, and Rs. 5 Crores under the MSME loan scheme. Borrowers can also apply for a personal loan of up to Rs. 20 Lakhs, a home loan of up to Rs. 10 Crores, and an auto loan of up to Rs. 1 Crore under this scheme.

The start-up loan eligibility criteria differ from one lender to another. Following are some generic startup business loan eligibility criteria:

• The applicant should not be aged below 21 years when applying for the new business start-up loan the maximum age should not be above 65 years when the loan matures.
• The applicant should be an Indian citizen.
• The applicant must have a well-drafted business plan.
• The concerned startup must be a sole proprietorship, partnership firm, private/public limited company, or a limited liability partnership.
• The applicant should have a credit score of 750 or above.
• The applicant should not have any previous loan defaults with any lender.
• The total turnover of the business should not be more than Rs. 25 Crores.

You will need the following documents to apply for a small business loan startup:

• Duly filled out application startup loan application form. 
• Recent passport-sized photographs.
• KYC documents of the applicant as well as co-applicants including Passport, Aadhaar Card, Voter ID Card, PAN Card, Driving License, and Utility Bills.
• Self-drafted Business Plan.
• Bank statement of the last 12 months.
• Last 1 year’s Income Tax Return.
• Business address proof as well as PAN Card.
• Business Incorporation Certificate.
• Any other document as required by the lender.

Following are some of the best banks that offer instant business loans for startups:

HDFC Bank's Key Features

• Loan amount available of up to Rs. 40 Lakhs (Rs. 50 Lakhs in select locations).
• Rate of interest starting from 15.75% p.a.
• A processing fee of 0.99% of the sanctioned loan amount will be levied by the bank.
• Repayment tenure of 1 to 4 years.

TATA Capital Key Features

• Loans amount available between Rs. 5 Lakhs to Rs. 75 Lakhs.
• The rate of interest for this start-up financing starts from 19% p.a.
• A processing fee of up to 2.50% of the sanctioned loan amount plus GST will be levied by the bank.
• Repayment tenure of 1 to 3 years.

Kotak Mahindra Key Features

• Rs. 3 Lakhs to Rs. 75 Lakhs startup business loan without collateral available.
• Fund against credit card receivables (FCCR) is also available up to Rs. 3 Crores.
• A processing fee of up to 2% of the loan amount plus applicable taxes will be charged.
• Repayment tenures of up to 4 years are available.

Fullerton India Key Features

• Unsecured business loan for startup up to Rs. 50 Lakhs can be availed.
• Repayment tenure of up to 5 years is available.
• The processing fee is up to 6.5% of the loan amount plus applicable GST.