Best Five Government Loan Schemes for new Business in India
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If you are planning to start a startup business or an MSME business, or wish to take your existing enterprise to new heights, a constant cash flow is something you always need. for this purpose Government provide different loan schemes for the new busines in India, with attractive interest rates, many times without any collateral security.


Currently, the MSME sector is responsible for creating around 11.10 crore jobs across the country. MSME is also known as India’s engine of growth.


MSMEs contribute to 8% of the overall GDP, around 40% of the total export and 45% of the country’s manufacturing output comes from this sector.


Best Five Government business loan schemes in India for New Business:-

1. MSME Loan scheme in 59 minutes:-

The MSME BUSINESS loan scheme was launched by the the government of India to focus on working capital requirements of Industries in the MSME sector. Any business can avail a loan under the MSME Scheme.


Micro, small and Medium Enterprises can avail of MSME Loans for the expansion of the existing business or setting up new business. Under this scheme, MSMEs can get loan amounts from Rs. 1Lac to Rs. 5 Core loans in 59 minutes.


Any MSME (micro, small and medium enterprise) can apply for the PSB Loans in the 59 minutes portal by filing a form along with essential documents such as GST return for the last six months, Income Tax returns etc.This Loan facilities is the top government loan scheme for the new business.


Best Five Government Loan Schemes for new Business in India
MSMe-Loans- from the Government in 59 Minutes

The benefits of MSME Loans in 59 minutes are:-

Rate of Interest:-MSME Loan 59 minutes interest rate start from a reasonable 8%.


Wide range of Loan Amount:- Amount of loan ranges from 1 Lac to 5Crore.


Minimum documention:- For sanction of this loan, minimum documents are required so that the loan can be processed quickly and in a hassle-free manner.


Application to the multiple loan providers:- Applicants can apply to multiple loan providers so that the applicant gets the amount as expected.


2. Pradhan Mantri Mudra Yojana (PMMY):-

Pradhan Mantri MUDRA Yojana (PMMY) is a scheme launched by the Honorable Prime Minister on April 8, 2015, for providing loans up to 10 Lacs to non-corporate, non-farm small/micro enterprises. These types of loans are described as MUDRA loans under PMMY.

These loans are given by Commercial Banks, RRBs, Small Finance Banks Cooperative Banks, MFIs and NBFCs. here the borrower can approach any of the lending institutions mentioned above or can apply online through this portal. The Loan facility is the top government loans scheme for the new business.


Best Five Government Loan Schemes for new Business in India

Under the PMMY, MUDRA divided the loan into three categories as ‘SHISHU”,” KISHORE”&” TARUN”.

1. Sishu Loan Covering Loans up to Rs. 50,000 and the rate of interest is @1% to @12% per annum.


2. Kishore Loan Covering Loans above Rs. 50,000 and up to Rs. 5,00,000 with an interest rate 

@8.60% to 11.15% per annum.


3. Tarun Loan:-Covering Loan above Rs. 5 Lacs and up to Rs. 10 Lacs with the rate of interest @11.15% to 20% per annum.


Presently, the purpose of a Mudra Loan is not to develop small units but it is offered as a 


(i)Business loan for the vendors, traders, shopkeepers and other service activities.


(ii) A working Capital Loan through Mudra Card


(iii) Loans for Tractors, two-wheelers, and other transport vehicles only for 

Commercial uses.


(iv) Equipment finance for micro units.


Mudra cards also help in the digitalization of all Mudra transactions and keeping a record of borrowers credit history.



3. Credit Guarantee fund scheme for micro and small enterprises (CGFMSE).

CGFMSE is a Government business loans scheme launched by the Government of India. This loan allows collateral-free credit to the MSME Sector. It includes both the old business as well as the new business. The Loan facility is the top government loan scheme for the new business.



The ministry of MSMEs and Small Industries Development bank of India (SIDBI) established a trust called Credit Guarantee Fund Trust for Micro and Small enterprises (CGTMSE) to implement CGFMSE scheme.


Under this funding scheme, MSMEs get access to a loan amount of up to Rs. 2Crore.and there is a special provision for business women. The Guarantee covers are available to the extent of a maximum of 85% of the sanctioned amount of the credit facility.



Best Five Government Loan Schemes for new Business in India

The fees charged by the trust fund is 1% per annum of the amount sanctioned.

(i)0.75% for credit up to Rs.5 Lacs.


(ii)0.85% for credit above Rs. 5Lacs but up to Rs. 100 Lacs.


As per the eligibility criteria, already existing or newly established enterprises that are engaged in the following activities are eligible for the same.


(i)Manufacturingactivity(ii)RetailTrade(iii)Educational Institutions(iv)Training Institute etc(v) service activity.


Credit The guarantee Fund Scheme for Micro and Small Enterprises (CGMSE) was launched by the Government of India to make available collateral-free credit to the micro and small enterprise sectors. Both the existing and the new enterprises are eligible to be covered under the scheme.


4. National Small Industries Corporation subsid(NSIC):-

National Small Industries Corporation(NSIC) is a public Sector Undertaking(PSU), which comes under the purview of the Ministry of Micro, Small & Medium Enterprises of India.


 It was set up by the Government of India in 1955 to foster, promote and aid the growth of micro, small and medium enterprises(MSME)in India. Loan facilities are the top government loan scheme for the new business.NSIC offers several schemes for the growth of the MSME sector.


Best Five Government Loan Schemes for new Business in India
NSIC--national-small-industries-corporation-is providing Business loan to new businesses.

(i) Bank Credit Facilitation:-

To fulfil credit needs of the MSME units, NSIC has partnered with various private and public sector banks. NSIC facilitates access to credit support to MSMEs from the bank by assisting in the documentation process, while following up with the banks.


To avail of loans, borrowers can download the loan application forms from the official website of the bank under the “Bank credit Facilitation Scheme”.


(ii) Raw Material Assistant Scheme:- 


MSMEs will receive assistance from NSIC to procure raw materials as per their requirements in the form of credit and advance payments. Any MSME in the manufacturing segments with a Udyog Adhar Memorandum (UAM) can take advantage of this scheme.


Single MSME units can avail of loans up to Rs.5 crore, while a group of units engaged in activities related to manufacturing can avail of loans up to Rs. 15 crore.


The rate of interest charged on loans available under this scheme range between 9.5% to 12%.


(iii) Single point Registration Scheme:-


To enhance the share of purchases from the MSME sector, the Single Point Registration The scheme was launched by NSIC in 1976 under the Government store Purchases Program.


This scheme enables MSEs to participate in government purchases through a single registration. MSE will be issued with a provisional Registration Certificate with a monitory limit of Rs. 5 Lacs. 385 no of items from MSEs will be reserved for exclusive purchase. 


(iv)Consortia and Tender Marketing:-


The scheme aims to promote the products of micro and small entrepreneurs. The scheme aids the entrepreneurs to market their products either individually or collectively through the “Consortium”.


Some of the features of this scheme are:-


·        Micro and Small Enterprises are registered with Single point Registration scheme (SPRS), will also be eligible to be covered under the Consortia and tender Market scheme.


·        This scheme will help in selecting the units which will be due to participate in open and single tender nomination basis.


·        This scheme also takes care of the security deposit and will provide EMD on a back to back basis.


·        This scheme will aid in the formation of a Consortium, and capacity building of MSMEs by the formation of consortia of their units manufacturing similar products, and participation in tenders on behalf of the units.


·        Legal documents such as individual agreement by the units, agreement to be executed by the consortium, board resolution, power of attorney etc. have been duly revised to accommodate the provisions of this scheme.


·        Enterprise formed under this scheme will supply the required stores with the necessary items and render services as required by the government department.


·        Under this scheme, all the information related to businesses, technology, finance and different types of aid offered by NSICs will be displayed in stop-one window format.


(v) Government Schemes implemented by NSIC:-


This is an initiative launched by the government of India which aims to help those belonging to SC and ST groups to start their own business successfully and take care of their financial requirements.


The Govt. of India to make this scheme successfully allocated Rs. 490 Crore for the period between 2016 and 2020. All new and existing SC and ST entrepreneurs must be registered in the MSME Data bank.


(v) Marketing Assistant Scheme:-


The MSME sector has been growing day by day in India. In the last few years MSME sector has been one of the one of the most dynamic sectors of the Indian economy. Various MSME schemes in India has established business and provide employment opportunities. 


One of the most important tools of any business is marketing. To promote it and grow is the main tool of every enterprise. The Ministry of Micro Small & Medium Enterprise, inter-alia through National Small Industries Corporation (NSIC), a public Sector Enterprise of the Ministry,, has been providing marketing support to MSMEs.


5. SIDBI Loans:-

SIDBI offers loans and monetary assistance to the MSMEs, Service sectors and other small-scale industry (SSI) units. SIDBI offers Finance Schemes for sustainable development. This loan facility is the top government loan scheme for new business.

This includes cleaner production and energy efficiency in MSMEs. Receivable Finance Scheme. SIDBI offers Finance for Upgradation and Modernisation. 


Best Five Government Loan Schemes for new Business in India

Who is eligible for SIDBI Loans:-

SIDBI-Loan to purchase equipment for Enterprise Development (SPEED).MSME units with at least 3 years of operation and with stable sales and cash profits in the immediate past 2 years.


What is the use of SIDBI?


SIDBI offers working Capital Assistance, Term Loan Assistance, Foreign Currency Loans, and Support against Receivables, equity support, Energy saving scheme for the MSME sector etc. under its direct finance loan scheme.


What type of bank is SIDBI?


SIDBI – Small Industries Development Bank of India (SIDBI) is an independent financial institution aimed at aiding the growth and development of Micro, Small and Medium Enterprises(MSMEs) which contribute significantly to the the national economy in terms of production 

Employment and export.


The Direct Loan Scheme offered by SIDBI is as follows:-


(i)Smile Equipment Finance 


(SEF):- Loan tenure is 72 months. Minimum amount of Rs. 10 Lacs 

can be availed. The eligibility criteria are a minimum 3year experience in the financial or business sector.   


(ii) SIDBI Make India Soft Loan Fund for MSME:-


Loan tenure is 10 years including a 3-year moratorium. The loan will be available between Rs. 10 Lacs to Rs 25 Lacs.


(iii)Working Capital (Cash Credit):-


Loans are available as per the terms and conditions depending on your financial ability.


(iv) SIDBI Loan for purchase of equipment:-


Loan tenure is 5 years and the moratorium period is 6 months. New customers will get Rs. 1 Crore and the Existing customer will get up to Rs. 2 Crore.


(v) TOP up Loan for immediate purposes:-


Loan tenure is up to 5 years .30% of existing exposure or 20% of net sales to Maximum Rs. 2 Crore.


(vi)SIDBI Assistant to MSME:-


Loan tenure is 5 Years. In SIDBI, the loan will be given up to Rs. 2 Crores to MSME sector.




Government business loans are funding support offered in the form of loan schemes, initiated by the government of India and are offered with the help of financial institutions, such as Private and Public sector banks, NBFC, Regional and Rural Banks etc.


India has more than 7.9 million micros, small and medium enterprises( MSMEs) as of 27 th March 2022 according to the Ministry of Micro, Small 

& Medium Enterprises.


In the Budget FM’s Budget speech was that she extended the Emergency Credit Line Guarantee Scheme (ECLGS) to March 2023.FM’s announcement was the increase of budgetary allocation for MSMEs from last year from Rs.15699.65 Crore to Rs.21422 Crore now which is an increase by (26.71%). 



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I am Ajay Kumar Patra. ( & MBA-Finance) with 27years of Accounts & Taxation Experience in Large Manufacturing Units in India. In 2021 I started my own tax consultancy firm called “Ajay Tax consultant”. I started my Digital marketing on my website "".I have already published more than 100 Blogs on Business, Finance, startups, Digital marketing & Tours & Travel for my viewers.

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