Top Government Loan Options For Small Business

Promoting small businesses is a priority for the Indian Government as it wants to promote the Indian economy and the best way to do so is to encourage development of businesses. That is why the Government develops various ways to promote and uplift small businesses. There are various types of Business loans too which are offered by the Government for financing small businesses. Some of the top loans include the following –

  • MUDRA loan

MUDRA stands for Micro-Units Development and Refinance Agency which offers the loan. The loan is allowed to micro businesses and non-corporate small businesses. The loan is a subsidised business loan which is offered in three categories. Shishu loans are for businesses which are in their initial stages. The maximum amount of loan is INR 50,000 for a term of up to 5 years. Interest is 1% per month. The next category is Kishore loans which are more than INR 50, 000 but below INR 5 lakhs. Lastly is the Tarun loan which is from INR 5 lakhs to INR 10 lakhs.


The Credit Guarantee Fund Scheme for Micro and Small Enterprises is an unsecured loan allowing amounts of up to INR 100 lakhs. The loan was launched by the Government in association with SIDBI. Both new and existing businesses can avail the loan and the amount granted would depend on the eligibility of the business applying for the loan.

  • Stand-up India Loan scheme

The Stand-up India loan scheme is designed for SC/ST entrepreneurs associated with Greenfield enterprises to help them establish their own business. Women can also avail this loan facility where the funds granted range from INR 10 lakhs to INR 1 crore. The repayment tenure allowed is up to 7 years and the loan can be used to establish service, manufacturing or trading business.

  • Coir Udyami Yojana

Coir Udyami Yojana, or CUY as it is popularly called, is a subsidised loan scheme. The scheme is meant for facilitating the establishment of coir units and it is headed by the coir board. The loan is allowed to enable coir crafting businesses. The loan amount is up to INR 10 lakhs with a provision for an additional working capital loan. However, the loan would be allowed for up to 25% of the project cost and the allowed repayment tenure is up to 7 years.

  • Market Development Assistance Scheme for MSMEs

These loans allow MSMEs to participate in trade fairs and international exhibitions so that they can market their products in the international market. The loan offers reimbursement of one-time registration fee of up to 75% and also helps businesses to invest in energy efficient technologies for production.

These loans are allowed by the Government to establish or to manage small businesses. You can apply for these loans depending on your suitability and requirements. Based on your eligibility and financial requirements the loan would be issued. So, the Government has devised many loan schemes, it’s on you to find the most suitable loan.

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