TALK TO SALES
TALK TO SALES
Mobile Logo
Home > Services > Business Loan > Business Loans by Government

Business Loans by Government

To encourage growth and to provide financial assistance to Indian Micro, Small and Medium Enterprises (MSMEs), the government has come up with many schemes. Here is a list of popular government-backed financial products that collateral-free loans from Rs. 1 lakh to Rs.10 Crore.

Business Loan by Government


MUDRA Offered Loans/Schemes

  • Micro Units Development and Refinance Agency (MUDRA) is a non-banking financial company (NBFC) that supports the development of the micro-enterprises sector in India.
  • Encourages aspiring young minds to become first-generation entrepreneurs and helps existing small businesses expand their activities.

Provides refinance support to banks, Microfinance institutions (MFIs), and NBFCs to finance micro-enterprises under the Pradhan Mantri MUDRA Yojana scheme (PMMY).

Pradhan Mantri Mudra Yojana (PMMY)

  • PMMY provides loans for non-farming businesses involved in manufacturing, processing, trading and services whose credit needs are below Rs.10lakh.
  • All banks in the country, NBFCs, and MFIs issue the loans.
  • The loans are classified into 3 categories – Shishu, Kishore, and Tarun.
    • Shishu Scheme  -Loans up to Rs.50,000
    • Kishore Scheme – Loans from Rs.50,001 to Rs.5 lakh
    • Tarun Scheme – Loans above Rs. 5 lakh to Rs.10 lakh
  • Eligible borrowers include individuals, proprietary & partnership firms, public & private limited companies, and other legal entities.
  • The loans are available as Term Loans, Overdraft facilities, or Composite Loans.
  • The loan amount must be used for working capital purposes, acquiring capital assets, and marketing-related requirements, not personal purposes.
  • The maximum tenure of loans is 36 months. OD & CC are repayable on demand.


Stand-Up India Scheme 

  • Launched to encourage entrepreneurship and to empower Scheduled Castes (SCs), Scheduled Tribes (STs) and Women.
  • Under the scheme, banks provide loans for setting up a new or greenfield enterprise in manufacturing, services or the trading sector.
  • Collateral-free loans starting from Rs.10 lakh to Rs.1 Crore.
  • The loans are available as Composite Loans and shall be used to meet working capital requirements and to purchase capital assets.
  • The maximum repayment tenure is 7 years.

MSME Loans from SIDBI

Small Industries Development Bank of India (SIDBI) is the principal financial Institution for promoting, financing and developing the Micro, Small and Medium Enterprise (MSME) sector. It facilitates credit flow to MSMEs and addresses their financial and developmental gaps. Here is the list of Direct Loans provided by SIDBI for MSMEs.

  • EXPRESS 2.0
    • Expeditious Process To Deliver Rapid Loan Through Automated Evaluation And Swift Sanction
    • Provides term loan assistance to women entrepreneurs in manufacturing and service sectors to establish new or greenfield units, and to expand or modernise existing units.
    • Collateral-free loans up to Rs.1 Crore with maximum repayment tenure of 60 months.
    • SIDBI promises a seamless application process, automated loan processing, 100% financing, faster approvals & disbursement, and low processing fee as key features of the scheme.
  • SAATH (SIDBI Assistance And Aid For Thematic Support)
    • Provides term loan assistance to SC/ST entrepreneurs in manufacturing and service sectors to establish new or greenfield units or to expand or modernise existing units.
    • Eligible borrowers include MSMEs promoted by SC/ST entrepreneurs with a minimum 51% stake. Priority to smaller units and new establishments.
    • Collateral-free loans from Rs. 25lakh to Rs.3 Crore
    • SIDBI promises 50% of the credit guarantee fee, less processing charges, incentives for proper repayment, and zero prepayment charges.
  • ARJANA 
    • A Special Dispensation For Nurturing Enterprises Run By Women Entrepreneurs
    • Term loans to women entrepreneurs in manufacturing and service sectors to establish new or greenfield units, to expand or modernise existing units.
    • Eligible borrowers include MSMEs promoted by women entrepreneurs with a minimum 51% stake. Priority to smaller units and new establishments.
    • Collateral-free loans from Rs.25 lakh to Rs.3 Crore
    • SIDBI promises 50% of the credit guarantee fee, less processing charges, incentives for proper repayment, and zero prepayment charges.
  • STEP Scheme
    • SIDBI’S Term Loan To Enhance Production Of MSMEs
    • Provides short-term financial assistance to MSMEs for augmenting NWC and executing urgent confirmed orders.
    • Existing MSMEs with 3 years of operation and 2 years of operational profits are eligible for the loans
    • Collateral-free term loans up to Rs.3 Crore for existing customers and Rs.2 Crore for new customers.
  • UBHARTE SITAARE Programme
    • Term loans to Export oriented MSMEs for expansion, modernisation, diversification, technology upgradation, product R&D, etc.
    • Eligible businesses – Export businesses with unique technology products in potential sectors like Automobiles, Aerospace & Defence, Chemicals, Food Processing, IT & ITeS, Pharmaceuticals, Precision engineering, Textiles and allied sectors, etc.
    • Loan amount up to 80% of the project cost provided with joint financing from EXIM Bank.
    • Repayment tenure is up to 6 years and extendable up to 10 years.
  • STHAPAN Scheme
    • SIDBI Thematic Assistance For Purchase Of Capital Assets In New Enterprises
    • Financial aid to Greenfield units for setting up new units, including land purchase, factory building construction, and plant and equipment purchases.
    • Term loans upto Rs. 20 Crore, subject to a maximum of 75% of the project cost
    • Repayment tenure up to 7 years.
  • ARISE Scheme
    • Assistance To Re-Energize Capital Investments By SMEs
    • MSMEs engaged in high growth and priority sector are eligible.
    • Loans for existing businesses for expansion, modernisation or capital expenditure in the same business line.
    • 100% financing for loans up to Rs. 5 Crore. Maximum loan amount – Rs. 7 Crore
    • Repayment tenure up to 7 years.
  • Top-Up Loan For Immediate Purposes (TULIP)
    • Fast disbursal loans to facilitate equipment purchase, renovations, working capital requirements, to cater sudden bulk orders, etc.
    • One year of association with SIDBI is a must.
    • Up to 100% finance for the project cost
    • Fast loan disbursal with a repayment tenure of 5 years.
  • SIDBI Make In India Soft Loan Fund For MSMEs (SMILE)
    • Eligibility – New enterprises in the manufacturing and services sector and existing businesses undergoing expansion, modernization, and technology upgrade.
    • Loan up to Rs.10 lakh for equipment finance and Rs.25 lakh for other developments.
    • Quick disbursal, competitive interest rates, and longer tenure of up to 10 years.