Government Subsidy Loan for Business

Eligibility Criteria

The eligibility criteria for government loans for small scale businesses will vary from lender to lender but the basic ones have been listed below:

Type of Business	All micro enterprises engaged in trading, manufacturing, and services sector including professionals such as architects, doctors, CAs, etc.
Residential Status of the Applicant	Resident of India
Age	At least 18 years old
Status of the Business	New or existing enterprises
Education Qualification/ Skills	Must posses the skills or education required for the proposed activity

Note: The above listed eligibility criteria are in general and you have to fulfill additional criteria depending on the government scheme you are opting for and other internal policies. 

Documents Required

Application form	Filled and duly signed
KYC Documents	Business entity proof, partnership deed, incorporation certificate, shops, and establishment certificate, Articles of Association (AOA)
PAN Card	Of partners/directors/proprietors/promoters Of the business entity
Financials	Projected turnover and current year performance Tax audit reports, balance sheet, profit and loss report, VAT returns, audited and provisional financials, etc.
Address Proof	Of the business entity Of directors/promoters/partners/proprietors
Bank Statements	For the last 6 months
Photographs	Passport-size photograph of applicant/co-applicants

Note: The above-listed eligibility criteria are in general and you may be requested to submit additional documents based on your loan application and the scheme you are opting for. 

How to Apply?

Availing government loans for small scale businesses will not cause you much sweat. Since most government loans are dispensed through banks and financial institutions, you can directly approach them to avail loans. You can visit the nearest branch of the bank or financial institution who will guide you on the loan application process.

Some lenders will also allow you to apply for business loans online on their respective websites. You can visit their websites, fill up the application form provided, upload the relevant documents, and submit it. Once you complete the process and the verification is done from the bank's end, the loan amount will be credited directly into the bank account you provided during the application process.

Know more about Business Loans

1. SME Loans
2. PMEGP
3. CGTMSE

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FAQs on Government Loans for Small Scale Businesses

• What are the ways in which I can pay my small-scale business loan?

  You can choose to repay your small scale-business loan in any one of the following ways - Post Dated Cheques (PDCs), Electronic Clearing Service (ECS), and Direct Debit. ECS and Direct Debit are the more preferred form of repayment by borrowers of small-scale business loan.

• What is the maximum amount of loan I can avail as a business loan?

  The maximum amount of loan that can be availed as a small-scale business loan is Rs.5 crore but this will depend on factors such as the lender, the type of business, etc.

• How much EMI do I need to pay for my business loan?

  The Equated Monthly Instalment (EMI) that you need to pay towards your business loan will be based on the loan amount, repayment tenure, interest rate, etc. You can use the EMI calculator available on the home page of the BankBazaar website under the 'Finance Tools' section.

• Do I need to provide any collateral or security to avail a government loan for small scale business?

  In most cases, you will not be required to provide any collateral when availing yourself of a loan through government schemes. However, some lenders may ask you to provide collateral if the loan amount is higher.

• Can I avail a loan under the Mudra scheme to start my own business?

  Yes, you can. Under the Mudra scheme, loans can be availed in the range of Rs.50,000 to Rs.20 lakh. The amount of loan that you can avail to start your business will depend on the nature of business, lender, your credit history, etc.