India is home to more than 42 million small businesses and these small businesses are spread across the nation evenly. These small businesses are a part of SME (Small Medium Enterprises) sectors. This sector is held accountable for producing more than 6,000 different products. There are new businesses being registered every day and all of them require capital to start working. Choosing Loans for small business is the only smart way to proceed when thinking of upgrading an older business or starting a new one, maybe from the comfort of your home through digitalization. Now, let’s move ahead and know more about these small business loans.
Small business loans
A huge part of our GDP is generated from SME sectors and to keep it that way both government facilities and non-government banking facilities have implemented different loan systems. These loans are specially customized for business persons so that they can repay in time with considerable interest and no hassle.
Government’s MUDRA loan
MUDRA stands for Micro Units Development and Refinance Agency Ltd, which conducts its business under the supervision of Pradhan Mantri MUDRA Yojana (PMMY). This loan scheme is only for new entrepreneurs, existing entrepreneurs, and self-employed professionals. It consists of three levels of loan amounts that can be sanctioned. Now depending on the objective of the business, the entrepreneur can choose between Shishu (covering loans up to 50,000 rupees), Kishore (covering loans from 50,000 rupees to 5,00,000 rupees), or Tarun (covering loans from 5,00,000 rupees to 10,00,000 rupees) as part of the scheme.
Public Sector Banks loan (PSB) in 59 minutes
There was a time when business owners had to struggle for loan approval for days. Now in the digital era, one can get a business loan in just under 59 minutes with. All the right documents showing the credibility of the owner and the objective of the business. PSB in 59 minutes offers this online facility to persons wanting to avail MUDRA loan (up to 10,00,000 rupees). MSME loan (up to 5,000,000 rupees), home loan (up to 10,000,000 rupees). Car loan (up to 1,000,000 rupees), personal loan (up to 20,00,000 rupees). A person just needs to keep the sales data, Bank statement for the last six months, income tax return details, and director details handy while applying for an MSME loan online.
SSBL from State Bank of India
A simplified small business loan is an initiative taken by the State bank of India to help small businesses stand on their own. Any self-employed person or professional person engaged in manufacturing or servicing activities are eligible to avail of this loan only if their business has been in existence for the past 3 years. A business owner can avail of a loan anywhere from 10,00,000 rupees to 25,00,000 rupees depending on his business plans. The minimum period of repayment is 1 year and the maximum is 5 years. This is not an unsecured business loan, the borrower has to enlist collaterals before completing the registration for the loan.
Fullerton India is another loan agency offering specially tailored loans to meet the needs of a small business. One can avail of loans ranging anywhere from 50,000 rupees to 5,00,00,000 rupees. Which has a repayment time of a minimum of 1 year to a maximum of 5 years. Interested persons can simply use the business EMI (Easy Monthly Installments) calculators to find out the interest payable on a specified loan period. According to the loan eligibility, a borrower must be 21 to 60 years of age, their business should be in existence for a minimum of 3 years. And they must have 5 years of business management experience. Also, the borrower’s minimum turnover in the last year should be 10,00,000 rupees.
Credit guarantee fund trust for micro and small enterprise
CGTMSE is a government-invented loan scheme for small enterprises. Businesses engaged in activities such as manufacturing, retail trading, and servicing activities are eligible to avail of a CGTMSE loan. The maximum credit amount for this approach is set at 2,000,0000 rupees. Interest charged on the borrowed amount is subject to the guidelines of the Reserve Bank of India. This government approach has more than 100 Member Lending institutions such. As Non-Banking Financial Corporations, private banks, public sector undertakings, and others. You can either apply for this loan online or apply at your nearest bank offering this facility.
Banks and NBFCs offering loans for small business are impacting our GDP positively. As they are giving a chance to these small businesses to stand out and make a name for themselves. In this digital era, It is easier than ever to opt for a business loan online. Than to wait in line at the bank for hours to do the same.
References: All the references are taken from the official sites hyperlinked above.