Ready to get Small Business Loan? Check these Schemes First!

Small business owners form the backbone of the entire business Industry of the country. With the latest ideas, innovative approaches, and new methodologies to complete age-old practices, these business owners are breaking shackles like never before.

However, one of the difficult things for them turns out to be raising an adequate amount of funding to keep their business operations consistent without any hindrances. Keeping this in mind, several top banks of India have come up with varying small Business loans with their own sets of terms and conditions.

Let’s find out the list of loans that can be acquired easily along with their interest rates and other necessary information.

Top Small Business Loans in India

1. Pradhan Mantri Mudra Yojana

Pradhan Mantri Mudra Yojana (PMMY) is one scheme that was launched by Mr Narendra Modi back on April 8, 2015. The primary intention behind this scheme is to offer government business loan up to Rs. 10 lakhs to:

• Small Manufacturing units
• Food processors
• Service sector units
• Artisans
• Shopkeepers
• Small industries
• Vegetable/fruit vendors
• Machine operators
• Truck operators
• Repair shops
• Foodservice units

NBFCs, MFIs, Small Finance Banks, RRBs, and Commercial Banks, have taken the responsibility of providing this loan, and interest rates vary accordingly. Under this scheme, there are three different products:

2. SBI Simplified Small Business Loan

Coming from one of the trusted banks in the country, this simplified Bank loan for business makes it easier for small business owners to develop their current assets as well as fixed assets required for the purpose of business. This loan is appropriate for everybody engaged in manufacturing, service activities, wholesale, retail trading and even the ones who are professional and self-employed. Some of the noteworthy features of this loan are:

• Unified charges are Rs. 7500 for process fee, documentation charges, EM charges, commitment and remittance charges, and inspection cost
• The repayment period is up to 60 months
• Minimum Collateral security required is 40%
• Minimum of Rs. 10 lakhs and maximum of lesser than Rs. 25 lakhs of loan can be availed

3. RBL Unsecured Small Business Loan

Provided by RBL, this loan scheme is perfect for those who don’t have anything to put in the form of collateral security. Furthermore, this unsecured business loan can even be availed by those who are engaged in almost every sort of business activity; thus, there are no significant restrictions whatsoever. Some of the things to be kept in mind are:

• The loan amount is up to Rs. 10 lakhs
• The loan repayment tenure is between 12 to 60 months
• Co-applicant is necessary for application
• Available for proprietorship/proprietor / individual companies
• Applicant should be anywhere between 25 to 65 years of age
• Applicant should have at least 3 years in the current business and residence place
• For a loan above 3 lakhs, the applicant should have a track record of any previous loans

4. Bank of Baroda Small Business Loan

Appropriately suited for those who are in business independently like handicraft artisans, hairdressers, electricians, consultants, contractors, engineers, lawyers, medical professionals, and more. This small business loan by Bank of Baroda allows people to buy equipment, acquire business premise or renovate the existing one, invest in the working Capital and tools required to continue the business. Some additional terms and conditions posted by the bank are:

• The maximum limit of the loan is Rs. 5 lakhs for professionals and businessmen
• The working capital must not be more than Rs. 1 lakh
• For qualified, professional medical practitioners who want a loan to start a business in rural or semi-urban areas, the limit is Rs. 10 lakhs with a working capital limit not more than Rs. 2 lakhs
• Rate of interest is competitively linked to tenor based MCLR

5. CGMSE Collateral-Free Loans

The Credit Guarantee Fund Scheme for Micro and Small Enterprises (CGMSE) was established as a financial support scheme for small enterprises. Thus, their collateral-free credit for new and existing businesses is a perfect chance to fund up your business idea. What you can expect out of this strategy is:

• Loan up to Rs. 10 lakhs without collateral security
• Loans above Rs. 10 lakhs and under Rs. 1 crore with collateral security

Conclusion

Ensuring that your business is running on satisfactory funding gives you wings to experiment more. Thus, if you are ready to acquire a loan for your dreams, you can consider any of the schemes mentioned above for lesser investment and more output.