3 Govt Schemes under which Small Businesses can apply Loan of up to Rs. 2 Cr

Did you know 9 out of 10 small businessmen face cash-flow problems in their business at least once in a year? Of course, we need money to make money. Unfortunately, not all the loans are safe and easy to get! In the recent survey, only 2 out of 10 small business owners are successful in getting bank loans, rest fail. Well, Government is trying to make it easy for small businesses to get easy subsidy loans with a lesser rate of interest.


Here are 3 BEST Govt Loan schemes every small business owner should know about:

Credit-Linked Capital Subsidy Scheme

Who are eligible?

Indian Institutes of Technology (IITs).

National Institutes of Technology ( NITs).

Engineering Colleges.

Technology Development Centres, Tool Rooms, etc.

Other recognized R&D&/or Technical Institutes/Centres, Development Institutes of DIP&P in the field of Paper, Rubber, Machine Tools, etc.

Biotech Industry

Common Effluent Treatment Plant

Corrugated Boxes

Drugs and Pharmaceuticals

Dyes and Intermediates

Industry based on Medicinal and Aromatic plants

Plastic Moulded/ Extruded Products and Parts/ Components

Rubber Processing including Cycle/Rickshaw Tyres

Food Processing (including Ice cream manufacturing)

Poultry Hatchery & Cattle Feed Industry

Dimensional Stone Industry (excluding Quarrying and Mining)

Glass and Ceramic Items including Tiles

Leather and Leather products including Footwear and Garments

Electronic equipment viz tests, measuring and assembly/ manufacturing, industrial process control, analytical, medical, electronic consumer and communication equipment, etc.

Fans and Motors Industry

General Light Service (GLS) Lamps

Information Technology (Hardware)

Mineral-Filled Sheathed Heating Elements

Transformer/ Electrical Stampings/ Laminations/ Coils/ Chokes including Solenoid Coils

Wires and Cable Industry

Auto parts and components

Bicycle Parts

Combustion Devices/ Appliances

Forging and Hand Tools

Foundries – Steel and Cast Iron

General Engineering Works

Gold Plating and Jewellery

Locks

Steel Furniture

Toys

Non-Ferrous Foundry

Sport Goods

Cosmetics

Ready mate Garments.

Wooden Furniture

Mineral Water Bottle

Paints, Varnishes, Alkyds and Alkyd Products

Agricultural Implements and Post Harvest Equipment

Beneficiation of Graphite and Phosphate

Khadi and Village Industries

Coir and Coir Products

Steel Furniture

Toys

Non-Ferrous Foundry

Sports Goods

Cosmetics

Ready-made Garments

Wooden Furniture

Mineral Water Bottle

Paints, Varnishes, Alkyds and Alkyd Products

Agricultural Implements and Post Harvest Equipment

Beneficiation of Graphic and Phosphate

Khadi and Village Industries

Coir and Coir Products

Steel Re-rolling and Pencil Ingot making Industries

Zinc Sulphate

Welding Electrodes

Sewing Machine Industry

 

Benefits you get from this scheme: Loan Amount and Capital Subsidy

The scheme provides an upfront capital subsidy of 15% to MSEs, including tiny, khadi, village, and coir industrial units, on institutional finance of up to Rs 1 crore availed by them, for induction of well-established and improved technology in the approved 51 sub-sectors/products.

✔ A maximum of Rs 1 crore with the rate of subsidy of 15% is offered under this scheme.

 

How to register and apply for a loan under CLCS

✔ Visit the official website of the MSME department: CLICK HERE

 

Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE)

Who are/aren’t eligible?

You are eligible for this scheme if you’ve taken a collateral-free loan of up to of Rs 200 lakh (Rs 2 crore).

New as well as existing Micro and Small Businesses, specifically in manufacturing or service activity are eligible.

Educational Institutions, Agriculture, Self Help Groups (SHGs), Training Institutions, etc are NOT eligible

For more details on eligibility criteria under this small business loan scheme: https://www.cgtmse.in/FAQs.aspx?artid=115

 

Benefits you get from this scheme: Loan Amount and Capital Subsidy –

You can apply for loans without collateral deposits.

Third-party guarantees not required.

If you fail to repay the loan, this scheme will cover your lender a certain percentage of the loan taken.

If you’ve taken a loan up to 5 lakhs – 85% of your loan will be covered.

For loans between Rs 10 lakh to Rs 100 lakh (for retail activity only) – 50% of your loan will be covered. If the small business is owned by women, then 80% will be covered.

 

How to register and apply for a loan under CGTMSE

Step 1 – Form the Business Organization

Register your business -> Obtain the necessary licenses and permissions from the respective Govt. authority -> Open a current bank account -> Apply for business PAN Card.

Step 2 – Prepare the Project Report or Business Plan

Submit a full-proof project report with market analysis, ROI, Break-Even and Payback calculations.

Step 3 – Apply for the sanction of Bank Loan

Apply for the loan ->Talk with at least 2 to 3 banks that are nearby you.

List of Banks Who Provide Loans under CGTMSE Scheme

Public Sector Banks (21 nos.)

1 Allahabad Bank

2 Andhra Bank

3 Bank of Baroda

4 Bank of India

5 Bank of Maharashtra

6 Bharatiya Mahila Bank Ltd.

7 Canara Bank

8 Central Bank of India

9 Corporation Bank

10 Dena Bank

11 IDBI Bank Limited

12 Indian Bank

13 Indian Overseas Bank

14 Oriental Bank of Commerce

15 Punjab & Sind Bank

16 Punjab National Bank

17 Syndicate Bank

18 UCO Bank

19 Union Bank of India

20 United Bank of India

21 Vijaya Bank

SBI & Its Associates Banks (6 nos.)

1 State Bank of India

2 State Bank of Bikaner & Jaipur

3 State Bank of Hyderabad

4 State Bank of Mysore

5 State Bank of Patiala

6 State Bank of Travancore

Private Sector Banks (21 nos.)

1 Axis Bank Ltd.

2 Catholic Syrian Bank Ltd.

3 City Union Bank

4 Development Credit Bank Ltd.

5 HDFC Bank Ltd.

6 ICICI Bank Ltd.

7 IDFC Bank Ltd.

8 IndusInd Bank Ltd.

9 ING Vysya Bank Ltd.

10 Karnataka Bank Ltd.

11 Kotak Mahindra Bank Ltd.

12 Lakshmi Vilas Bank Ltd.

13 Tamilnad Mercantile Bank Ltd.

14 The Dhanalakshmi Bank Ltd.

15 The Federal Bank Ltd.

16 The Jammu & Kashmir Bank Ltd.

17 The Karur Vysya Bank Ltd.

18 The Nainital Bank Ltd.

19 The Ratnakar Bank Ltd.

20 The South Indian Bank Ltd.

21 YES Bank Limited

Foreign Banks (4 nos.)

1 Barclays Bank PLC

2 Bank of Bahrain and Kuwait

3 Deutsche Bank

4 Standard Chartered Bank

Regional Rural Banks (66 nos.)

1 Allahabad UP Gramin Bank

2 Andhra Pradesh Grameena Vikas Bank

3 Andhra Pragathi Grameena Bank

4 Aryavart Gramin Bank

5 Assam Gramin Vikash Bank

6 Baitarani Gramya Bank

7 Ballia Etawah Gramin Bank

8 Bangiya Gramin Vikash Bank

9 Baroda Gujarat Gramin Bank

10 Baroda Rajasthan Gramin Bank

11 Baroda Uttar Pradesh Gramin Bank

12 Bihar Kshetriya Gramin Bank

13 Chaitanya Godavari Grameena Bank

14 Chattisgarh Rajya Gramin Bank

15 Dena Gujarat Gramin Bank

16 Hadoti Kshetriya Gramin Bank

17 Himachal Gramin Bank

18 Jaipur Thar Gramin Bank

19 Jammu & Kashmir Gramin Bank

20 Jharkhand Gramin Bank

21 Karnataka Vikas Grameena Bank

22 Kashi Gomti Samyut Gramin Bank

23 Kaveri Grameena Bank

24 Kerala Gramin Bank

25 Langpi Dehangi Rural Bank

26 Madhya Bharat Gramin Bank

27 Madhya Bihar Gramin Bank

28 Maharashtra Godavari Gramin Bank

29 Maharashtra Gramin Bank

30 Malwa Gramin Bank

31 Meghalaya Rural Bank

32 MGB Gramin Bank

33 Mizoram Rural Bank

34 Nainital – Almora Kshetriya Gramin Bank

35 Narmada Malwa Gramin Bank

36 Neelachal Gramya Bank

37 Pallavan Gramin Bank

38 Pandyan Grama Bank

39 Parvatiya Gramin Bank

40 Pragathi Krishna Grameena Bank

41 Prathama Bank

42 Puduvai Bharathiar Grama Bank

43 Punjab Gramin Bank

44 Purvanchal Gramin Bank

45 Rajasthan Gramin Bank

46 Rewa Siddhi Gramin Bank

47 Rushikulya Gramya Bank

48 Samastipur Kshetriya Gramin Bank

49 Saptagiri Grameena Bank

50 Sarva Haryana Gramin Bank

51 Sarva UP Gramin Bank

52 Satpura Narmada Kshetriya Gramin Bank

53 Saurashtra Gramin Bank

54 Sharda Gramin Bank

55 Shreyas Gramin Bank

56 Sutlej Gramin Bank (SGB)

57 Telangana Gramin Bank

58 Tripura Gramin Bank

59 Triveni Kshetriya Gramin Bank

60 Uttar Bihar Gramin Bank

61 Uttaranchal Gramin Bank

62 Uttarbanga Kshetriya Gramin Bank

63 Vananchal Gramin Bank

64 Vidharbha Kshetriya Gramin Bank

65 Vidisha Bhopal Kshetriya Gramin Bank

66 Wainganga Krishna Gramin Bank

 

Step 4 – Get Coverage under CGTMSE Scheme

After getting the sanction of the loan, the bank will apply for the subsidy to the CGTMSE organization. After the approval, you have to pay the CGTMSE guarantee and service fee if any.

 

Prime Minister's Employment Generation Programme (PMEGP)

Who are eligible?

18 years old and above.

Must have passed 8th Std to work on the project above Rs 5 lakh in the service sector and above Rs 10 lakh in the manufacturing sector.

Institutions registered under Societies Registration Act- 1860.

Production-based co-operative societies.

Self-help groups and charitable trusts.

 

Benefits you get from this scheme: Loan Amount and Capital Subsidy –

For General Category: The eligible subsidy is 25% of the cost of the project in rural areas and 15% in urban areas.

For Special Category (including SC/ST/OBC /Minorities/ Women, Ex-Servicemen, Physically handicapped, NER, Hill, and Border areas, etc): The eligible subsidy is 35% of the cost of the project in rural areas and 25% in urban areas.

For the manufacturing sector, the loan limit is Rs 25 lakh and in the business/service sector, it is Rs 10 lakh.

The normal interest rate is applicable to the enterprise from time to time.

The Repayment Schedule ranges from 3 -7 years.

 

How to register and apply for a loan under PMEGP

To apply for this subsidy, you must submit your application online at kviconline.gov.in.

Then, take the printout of the application and submit it to the respective offices along with a detailed business report and other required documents

 

NOTE:

2 weeks training period is mandatory for all the applicants under PMEGP

No collateral security nor any third party guarantee is insisted here.

Any assets created from the bank loan should be collateral to Bank.

 

Do you have any questions? Please comment below

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