How to get Business Loans from The Indian Government

Business Loan

Business loans are one of the most popular financing options for small businesses in India. But with so many different types of business loans available, it can be difficult to know where to start. In this article, we’ll take a look at the different types of business loans available from the Indian government, as well as some tips on how to apply for them.

Types of business loans in India

There are several types of business loans available from the Indian government, each with its own set of benefits and drawbacks. Here are some of the most popular options:

  1. Bank Loans: SBI Business Loan, PNB Business Loan, ICICI Business Loan, HDFC Business Loan. This loan is provided by the Indian banks, one of the largest banks in the country. It offers a wide range of loan amounts and repayment periods, making it a good option for businesses of all sizes. However, the interest rate is relatively high, so it may not be the best choice for businesses with tight budgets.
  2. Crowdfunding: The Crowdfunding process allows fundraisers to collect money from a large number of people via online platforms.. The funds are then used for projects or businesses that otherwise may not have received such financial support. Mostly used by startups. This is a private method of funding your project.

Here are few crowdfunding platforms you can visit: 

  • Kickstarter. Overall Best
  • Fundable.  small businesses
  • GoFundMe. personal fundraising
  • Crowdfunder. for Shopify stores
  • Patreon. For creators
  1. 59 Minutes Loan: With a digital application, you can apply for a business loan from ₹10 lac to ₹5 crore and get an approval within 59 minutes. This is a very statisfying method to use as this doesn’t consume  you precious time while doing the paper work. 
  2. Mudra Loan: The Mudra Loan is a loan given to small businesses by the government. To apply for this loan, you’ll need to fill out an online application form and submit it to the government.
  3. Startup India Loan: Especially for For startups by the government. (online form)
  4. SME Loan: For small and medium businesses by the Indian government. (online form)

The process of getting a business loan in India

The process of getting a business loan in India can be a bit daunting, but it is definitely possible to get the financing you need from the government. Here are a few tips to help you through the process:

  1. Know what type of loan you need: The first step is to know what type of loan you need. The Indian government offers a variety of loans for different purposes, so it is important to determine which one is right for your business.
  2. Research the eligibility requirements: Once you know what type of loan you need, research the eligibility requirements for that particular loan. Make sure your business meets all the criteria before applying.
  3. Gather all the required documents: The next step is to gather all the required documents for the application process. This includes financial statements, PAN card, Aadhar Card, GST Number, business plans, and other supporting documentation.
  4. Submit your application: Once you have all the required documents, you can submit your application to the Indian government website. Be sure to complete all the necessary forms and provide accurate information.
  5. Wait for a decision: After you submit your application, it can take several weeks or even months for a decision to be made. Be patient and keep track of your application on the portal.

Tips for improving your chances of getting a loan

There are a few things you can do to improve your chances of getting a loan from the Indian government.

First, make sure you have a strong business plan. The government wants to see that you have a clear idea of what your business is and how it will be successful.

Second, gather all the necessary documents and paperwork before you apply for the loan. This will show the government that you are prepared and organized.

Finally, be patient and persistent. The process of getting a loan from the government can take some time, but if you keep at it, you will eventually be successful.

The Documents Required for a Business Loan in India

For any business owner looking to take out a loan from the Indian government, there are certain documents that will be required. These include:

GST/sales data
Income tax return details
Bank statement last 6 months
Director details
personal details
A business plan
Proof of ownership of the business
Financial statements for the business
Personal financial statements for the business owners

The Repayment Period for Business Loans in India

The repayment period for business loans in India can vary depending on the type of loan you take out. For example, short-term loans have a shorter repayment period than long-term loans. However, the average repayment period for business loans in India is three to five years. To ensure that you can repay your loan on time, it is important to carefully consider your loan options and choose a repayment plan that fits your business’s needs.

Conclusion

The Indian government offers a variety of business loans that can help entrepreneurs get their businesses off the ground. By following the tips in this article, you can increase your chances of getting approved for a loan from the Indian government. Remember to do your research and put together a strong application package, and you’ll be one step closer to securing the funding you need to start or grow your business.

Bonus Tip: Keep your CIBIL score high. As it determines your creditworthiness as well as your eligibility for loans.

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