India has scopes of a boosted economic standard at home to start-ups; that are focused on e-commerce, mobility, and various vertical-specific solutions. The country has always set his standards high and provided time to time measures with immediate outcomes; which can boost the country’s economy with unprecedented growth. In an attempt to strengthen the economy and develop it into one of the strongest across the globe. The Government continues to take multiple initiatives to Fund Businesses in India . Both foreign and domestic investment plays a significant role in this economic boost.
Additionally, reputed companies offer their business loan that offers several features. This advance could be used to –
- Fund the working capital,
- Purchase state of the art equipment,
- Hire skilled employees, etc.
Since such financial assistance is the most preferred option for most entrepreneurs; they need to have comprehensive knowledge about government financial policies.
Government’s Initiatives to Fund a Businesses in India
MSME Business Loans in 59 minutes
Considering thatMSME or Micro, Small, and Medium Enterprises contribute around 31% of India’s GDP; the Government of India announced a policy of availing financial advances for the MSME industry.
Depending on a few eligibility criteria like the CIBIL score; an entrepreneur can get a business loan of up to Rs.1 crore. Among the benefits of MSME loan comes the point of ‘loan in 59 minutes’.
Following documents are required to avail an MSME loan –
- Address proof like Aadhaar card, Voter ID card, Passport, etc.
- Bank account statement for the previous six months.
- Income tax returns for the last three months.
- Ownership certificate.
- Educational qualification certificates.
MUDRA(Micro Units Development and Refinance Agency), established in 2008, is a part of Pradhan Mantri Mudra Yojana. This policy aims to provide funds to businesses for their development.
Depending on the growth of a business, the Pradhan Mantri MUDRA Yojana is divided into three segments. They are –
The first category, Shishu has features as-
- Applicable for entrepreneurs aiming to start their business.
- The maximum loan disbursed an amount of up to Rs.50,000.
- An individual can only avail of such a business loan only to purchase the required machinery.
- An individual needs to provide a quotation from their supplier.
Under the provision of Kishore policy,
- An entrepreneur can only avail this loan if they aim to expand their business.
- An individual can avail Rs.50001 to Rs.5 lakh in this policy.
- Documents required to avail this loan:
- Balance sheets for the last two years.
- The balance sheet of the current year.
- Bank account statements.
- Income and sales returns.
- Business plans to justify its economic and technical viability.
The last category of Pradhan Mantri MUDRA Yojana. And, it has features as –
- Applicable for individuals who aim to expand their established business.
- In this business loan, a borrower can avail Rs.500001 to Rs.10 lac.
- Documents required:
- Address proof,
- Identity proof and
- Caste certificate.
This flagship initiative of the Indian Government launched in 2016 aims to
- Build a better economic growth and
- More employment opportunities.
Under this scheme,a10% cost of the entire project is covered by the entrepreneur. As for the rest 90%, 75% of this is covered by the Start-Up India scheme; while other Government policies can fund the rest.
Along with Government initiatives like MSME loan, MUDRA loan, etc. different NBFCs offer advances like a business loan.
Advantages of business loans from NBFCs
Business loans bring in the added advantage of a
- High-value loan amount of up to Rs.30 lakh,
- Attractive rate of interest,
- Flexible tenor,
- Sans collateral, etc.
Established firms with a vintage of at least three years can avail business loans from NBFCs. These loans have simplified terms and conditions, most importantly; business loans can be availed within 24 hours.
Other than the above-stated benefits, financial institutions like Bajaj Finserv provide pre-approved offers; that make the process of obtaining loans easier.
These offers are available for secured and unsecured loans; such as business loans, home loans, loans against property, etc. You can check your pre-approved offers, but you have to share a few essential details.
While such government initiatives offer financial coverage, the amount provided often falls short; considering the escalated expenses to fund and run businesses in India. By providing a few business loan documents, financing can be availed quickly from an NBFC without any hassle.