The central government is working to promote small businesses and encourage the youth to become job providers rather than job seekers. The government aims to drive the country’s economic progress by fostering small entrepreneurs. Prime Minister Narendra Modi frequently emphasizes the importance of making India self-reliant. To support this, the government is offering loans without guarantees as financial assistance to young entrepreneurs. These loans range from Rs 10 lakh to Rs 1 crore, allowing entrepreneurs to choose the loan type that suits their needs.
The Government of India has launched various loan schemes aimed at making small businesses self-reliant. The purpose is to empower new entrepreneurs, promote economic development, and create employment opportunities. If you are planning to start a business in 2025 but lack the funds, there’s no need to worry. The central government is offering business loans to help expand your new business or support your existing one. Let’s explore the available loan schemes the government is providing.
There are many benefits when it comes to government loans, including no requirement for a guarantor and low interest rates. The special aspect of government loans is that you can avail of a larger loan at a lower interest rate. A guarantee-free loan means you don’t have to pledge any property to secure the loan. With minimal hassle, you can easily access these loans. Let’s explore five government loan schemes available to help you get started.
1. MSME Loan Scheme
This loan is designed to promote micro, small, and medium businesses. It offers up to Rs 1 crore without requiring any guarantee. The interest rate on this loan is 8%, and the loan is disbursed to the entrepreneur’s account within 12 days. This scheme is ideal for individuals looking to start their own business.
2. Pradhan Mantri Mudra Yojana (PMMY)
Launched in 2015, PMMY offers collateral-free loans to micro and small enterprises. The scheme is divided into three categories: Shishu loan (up to Rs 50,000), Kishor loan (Rs 50,000 to Rs 5 lakh), and Tarun loan (Rs 5 lakh to Rs 10 lakh). The interest rates range from 9% to 12%. You can apply for this loan through your nearest bank or online, with the required documents including your Aadhar card, PAN card, and a business plan.
3. National Small Industries Corporation (NSIC)
NSIC provides loans to small and medium enterprises (MSMEs), with interest rates ranging from 10.50% to 12% per annum, depending on the bank. NSIC is one of the most popular government schemes for small enterprises and is known for helping MSMEs with financial support.
4. Credit-Linked Capital Subsidy Scheme (CLCSS)
This scheme offers subsidized financing to businesses looking to upgrade their technology. Available to cooperatives, private or public limited businesses, partnerships, and sole proprietorships, CLCSS is ideal for business owners who want to modernize their operations and improve productivity.
5. SIDBI Loan
The Small Industries Development Bank of India (SIDBI) offers loans to MSMEs, either directly or indirectly, to meet the equity requirement for setting up new businesses. The interest rate under this scheme is 8.36%. New businesses in sectors such as construction and services can avail of loans ranging from Rs 25 lakh to Rs 1 crore, repayable within 10 years.
These government schemes provide a variety of loan options to help small businesses grow and thrive, without the burden of high interest rates or collateral requirements.
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