What is Subsidy Loan?
A Subsidy Loans for a Business is a Type of Loan Which Provide By the Government to expand Small and Medium Level Business. With the Help of Subsidy Loans you can Easily Raise Funding and Expand Your Business With Minimum Interest Rate. Now let's Discuss How many types of Subsidy Loans in Marketing which you can use and How you can get all these Loans.
Type of Subsidy Loan –
MSME Loans for Business.
MSME Subsidy Loans are the straightforward thanks to raising money for Your Business and Startup MSME stands for micro, small and medium enterprises, sometimes it's also shortened to SME for little and medium enterprises. But, in essence, MSME and SME loans are equivalent and are offered to businesses that fall into these two categories. Mostly, these loans are given to startup owners, small business owners and ladies entrepreneurs on a short-term basis. The duration of MSME / SME loans varies from lender to lender. As MSME loans are unsecured MSME / SME Loans, there are some minimum eligibility requirements so as to scale back the danger for lenders.
Who Can Apply for MSME Loans –
- An established business that has been in operations for more than 6 months.
- A minimum turnover of ₹ 90,000 or more in the 3 months preceding your loan application.
- The business should not fall under the blacklisted/excluded list for SBA finance.
- The physical location of your enterprises should not be in the negative location list.
- Trusts, NGOs and charitable institutions are not eligible for small business loans.
Mudra Loan-
This offered under the Pradhan Mantri Mudra Yojana (PMMY). MUDRA stands for Micro-Units Development and Refinance Agency. Under this scheme, borrowers can avail of business loans ranging from Rs.50,000 to Rs.10 lakh on the basis of the Sishu, Kishor, and Tarun categories.
Who can Apply for Mudra Loans -
Indian citizens who have their own business plans for service sector activities, or trading or manufacturing activities and require amounts of up to Rs.10 lakh can apply for MUDRA loans. MUDRA loans can be availed from public sector banks, private sector banks, regional rural banks (RRBs), small finance banks (SFBs), and microfinance institutions (MFIs).
As per the eligibility criteria for MUDRA Loan, an applicant should be:
- At least 18 years old
- An individual
- An MSME
- A trader
- A manufacturer
- A business owner
- A startup businessman
- A small-scale industrialist
- A shopkeeper
- An individual with agricultural engagements
PMGPE loans –
PMEGP scheme is integrated into two earlier schemes, viz.
Prime Minister Rojgar Yojana (PMRY) and the
Rural Employment Generation Programme (REGP) were working along similar lines to generate employment among the youth. Under this scheme, the beneficiary has to invest only
5-10% of the project cost while the government provides a
Subsidy of 15-35% of the project based on different criteria. The participating banks provide the rest of the funds as term loans to the entrepreneur. We look at this in some detail in the below section.
Who can Apply for PMGPE loans –
The PMEGP loan is given to individuals as well as other organizations that meet the specified criteria for such a
term loan. The list of such eligible entities who can apply for a loan under PEMGP is mentioned below:
- Individuals, who are above 18 years of age; the beneficiary individual must have studied and passed at least class 8 if they want to establish a manufacturing unit costing over Rs. 10 lakh or a service unit costing over Rs. 5 lakh with the PMEGP loan
- Self-help groups can also take the PMEGP loan provided they have not availed of any other benefit under the scheme
- Societies that are registered under Societies Registration Act, 1860
- Production Co-operative Societies
- Charitable Trusts
There are no income ceilings to avail of this loan. The PMEGP loan is only given to new units and is not available for existing units established under PMRY, REGP, or any other government scheme. Moreover, any unit that has availed a subsidy under any other scheme is not eligible for the PMEGP loan.
Start-up Loans –
A startup business loan encompasses any type of financing aimed specifically toward startups with little to no business history. Although it may not be as easy to access funding as a new business, there are still a variety of business loans and financing methods available to startups, including—SBA microloans, asset-based loans, business credit cards, and more.
How Does a Startup Business Loan Work?
When you’re looking for small business loans as a startup, you might be unsure of how the process of acquiring financing works. If you’re searching for business financing for the first time, this is completely understandable—plus, things are all the more confusing because there isn’t a single type of financing that qualifies as a “startup business loan.”
As we mentioned above, a startup business loan can refer to any type of financing that’s designed to accommodate newer businesses.
Therefore, you might access a startup business loan that functions as traditional debt financing—where you receive capital and pay it back over time with interest. On the other hand, you might find that equity financing is better suited for your startup—in this case, you’ll receive funding in exchange for shares or stock in your business.
In any case, although business startup loans can work differently based on the specific product and lender—the most important thing is that the loan works for your business. The right financing product for another startup might not necessarily be what’s right for your startup—so you’ll want to make sure that whatever type of startup business loan you choose is one that can meet your unique funding needs, and of course, is one that you can afford.
Who can apply for Startup Loans –
Ultimately, the
business loan requirements you’ll need to meet will depend largely on the particular product you’re interested in, as well as the lender, financial institution, or investor you’re working with.
This being said, however, there are some general tips you can keep in mind when trying to qualify for business startup loans.
First and foremost, if you’re looking for more traditional types of financing, you’ll want to make sure the lender works with younger businesses. Generally, it’s harder for businesses with less than six months in operation to find traditional loans. In this case, you may turn to one of the alternative options we’ve discussed—like a business credit card or grant.
Or, if you can offer collateral to secure your financings, like with invoice or equipment financing, you might find that a lender is more likely to work with your business, regardless of how long you’ve been operating.
On the other hand, if your business is older than six months, you should be able to find a lender, like a microlender, that will work with your startup.
In addition, another of the most important things to consider when trying to qualify for a startup business loan is your personal credit score.
Almost any lender will look at your personal credit score when you apply for financing—the higher your score, the better your changes are for qualifying for a loan—and one with the best terms and rates.
Of course, this isn’t to say that there aren’t
business loans for bad credit—however, as a startup, it may be even more difficult to access those types of products.
Therefore, if you need to work on improving your credit, you may again decide to turn to more creative funding methods to finance your business in the meantime.
Conclusion –
If you’re Also Planning your New business or Start-up or Expanding to your New Business or Start then These Methods are very Use fully. With the Help of These subsidy Loans for businesses, you can Easily Raise Your Funding for Business and Grow your Business with a Minimum Interest Rate. So what are you Waiting for Start Apply for these Loans if you have any Doughty Please Let me know in Comment Box.
