To kickstart your new business venture, you should have a slightly big fund in hand. Small businesses are a lifelong ambition and many people invest in them to get good returns. You should have enough budget to manage your small business finance needs If not, there are various types of small business loan schemes run by the RBI or financial institutions. Some people manage to operate their small businesses by putting all their resources into reaching the target while some people lack the resources.
In this blog, you will learn about various types of small business loans in India in 2024 and the steps to get the same:
Micro Small Medium Entreprises or MSME Loan
Micro Small Medium Entreprise Loan is a government-backed loan scheme which provide capital to small ventures to manage their financial needs. This loan option is provided to new startups and entrepreneurs. This loan will provide you with enough working capital which you can utilize to pay your business bills, salaries, and to invest in purchasing machinery and deal with other finances.
It helps you to expand your business very easily. This loan scheme has many flexibilities in loan terms and interest rates. The interest rate for MSNE loans starts at just 7.65% per annum. It has a longer tenure as you can pay your debts in a maximum of fifteen years.
Pradhan Mantri Mudra Loan
This mudra loan is made for entrepreneurs and small businesses. You can borrow up to 10 lakhs to run your business and boost your business productivity. Whether you are a self-employed professional or a stakeholder in a business, you can get a Pradhan Mantri Mudra Loan with ease by logging on government portal and applying there with the necessary documents and details. This mudra loan offers loan benefits to non-corporates as a common man can easily get this loan be he/she is living in urban or rural India. If you haven’t borrowed any loan and your age falls between 18 to 65 years with a good financial history, you can easily get the loan. With this loan, you can repay your debts in 5 years this loan scheme is backed by the government and hence it doesn’t levy any penalty or high charges, you have to pay a very minimal processing fee and foreclosing charges if you apply for the same.
PSB Loan
It’s another business loan which is becoming very popular these days. The loan approval is very quick as you can easily get the approval within an hour to specify your business operations and funds for machinery. It will provide you with enough working capital with a low-interest flexible duration. This loan will provide you with better options for investment too as it provides flexible tenure. The security and quick approval of this loan made this great for new entrepreneurs. No matter you are applying for a business loan in Mumbai or Delhi, you have to manage your budget accordingly.
CGMSE Loan
It’s a type of small business loan known as CGSTMSE loan which is the acronym of Credit Guarantee Fund Trust for Micro and Small Enterprises. This loan was started by MSME and SIDBI collaboration. This loan is provided to facilitate the smooth flow of your business operations like retail trade, manufacturing and service industries. You can easily apply for this loan to get the financial benefit of more than 2 crore. To be eligible for the loan, you should be age between 25 to 65 years old and have owned a business for a minimum of at least three consecutive years.
CLSS Loan
This loan option is also very popular these days as it stands for The Credit Linked Capital Subsidy Scheme. This loan provides financial assistance and upfront capital to various types of small and medium enterprises.
The basic goal of this loan is to provide sustainability to new entrepreneurs for running their business operations. This scheme covers various industries like Pharma, Electrical appliances, Biotech industries, Steel and Furniture, Communication, Information Technology, Poultry equipment, and Agricultural Equipments etc.
Steps to Apply for Small Business Loans
These steps should be followed to apply for small business loans:
- First and foremost, log on to MSME, SIDBI or the government scheme website.
- Then, you will be asked to create your account, do the same by providing your email address and phone number.
- Now, you have to click on the Apply Loan option there.
- Then, you have to provide basic and necessary details.
- You have to upload all the documents in the prescribed format and press Proceed.
- Pay the processing fee and take your acknowledgement for the application. Keep it safe for future prospects.
- Now, you have to wait for the loan approval from the organization side.
- Once your loan is approved, your account will be credited in one or two days.
Summary
Financing a small business needs lots of things and the most necessary is good financial support. Some business owner have funds and resources that they use for their business growth while some don’t have anything and in this case small business loan becomes the need. There are several types of business loans you can apply like MSME loans and small business loans. If you want a business loan in Mumbai, Delhi or Gujarat, you can easily get funds with a small business loan.