September 22, 2022
  • September 22, 2022

Government loan programs for small businesses in India

By on October 25, 2021 0

MSMEs (Micro, Small and Medium Enterprises) are essential to the economic growth of a country. MSMEs are always an excellent answer to important financial problems, including poverty, unemployment, income inequalities, regional imbalances, etc.

For this reason, the government has developed several initiatives to provide loans to MSMEs to help them develop their businesses and economies. Entrepreneurs who run such MSMEs can borrow money in the form of a loan under appropriate programs such as PM SVANidhi for their needs.

Main government programs for MSMEs

MSME loan in 59 minutes

One of the most popular lending initiatives put in place by the government in September 2018 is the MSME business loan in 59 minutes. The loans approved under this plan are intended to provide financial assistance to the growth of the country and stimulate growth.

MSMEs can access loans from public and private sector banks and NBFCs for amounts ranging from 1 lakh INR to 5 crore INR in less than 59 minutes at an interest rate of 8.50% as part of this program. plan (non-bank financial corporations). MPME / PSB Loans in 59 Minutes provides you with the necessary financial resources quickly and efficiently.

The loans offered under these programs range from Rs. 1 crore to Rs. 1 crore and take 8 to 12 days to complete. The authorization for the loan comes in 59 minutes, which is why the scheme is called MSME commercial loan in 59 minutes.

Here are the criteria for obtaining a loan under this program:

  • GST audits
  • Tax audits
  • Account statements for the last six months
  • Property Documentation
  • KYC Details

Mudra loans

MUDRA loans are approved by the Micro-Units Development and Refinance Agency, which the Indian government established to provide finance to microenterprises. MUDRA loans have for theme “financing the underfunded people”.

Low cost financing for micro and small businesses arose from these loans.


The state has set up the Stand-up India program to provide loans to businesses run by listed castes / tribal communities and women. Loans in the amount of Rs. 10 lakhs to Rs. 1 crore are offered in this scheme.

Each bank must provide a loan to at least one listed caste / tribe or female entrepreneur. Depending on the loan conditions, the fund will cover approximately 75% of the overall cost of the project.

This program is open to businesses in trade, manufacturing and other service-related sectors. If the business is not a sole proprietorship, at least 51% of the shares must be owned by a woman or a member of a listed caste / tribe.

National Small Business Grant

The NSIC is an ISO certified public company offering programs for MSMEs. One of its main responsibilities is to help MSMEs grow by providing financial, technological, business and other services across the country. It has launched two programs to further support the growth of MSMEs:

Marketing support program: This program helps in the development of any business by implementing programs such as Consortia and Tender Marketing. Such a program is essential because MSMEs need help to develop in today’s competitive market.

Credit support program: The NSIC provides financial assistance for the procurement of raw materials, marketing operations, and bank syndication financing for MSMEs.

Do small businesses have to register for the GST?

The GST is the most open and self-regulating tax system that is also the easiest to manage and govern. To run a smooth business, all manufacturers and suppliers of goods and services must register for the GST. Indian products will be competitive in domestic and foreign markets under the new regime.

Failure to get GST registration for a small business in India results in a direct penalty of up to Rs. 10,000. The penalty can be up to 100% of the amount you owe in taxes. This new tax structure holds great promise for the country’s future prosperity.

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Step-by-step GST registration process

The GST registration process is divided into four stages.

Part 1: Creating a GST Claim

  • Step 1: Go to the GST portal and select Services> Registration> New registration from the drop-down menu.
  • 2nd step: Fill in all the required information including your PAN, email address, and phone number.
  • Step 3: An OTP will be sent to your phone and email, and it will be valid for 10 minutes. It will generate your temporary reference number once you enter your OTP.
  • Step 4: Return to the GST portal and log in with your Temporary Reference Number (TRN) by clicking on Services> Registration> New Registration> Temporary Reference Number (TRN).
  • Step 5: After completing the captcha, you need to confirm your identity with a new OTP.
  • Step 6: Once your OTP is verified, it will direct you to the “My Saved Request” page, where you must fill in all the required information and submit it within 15 days, or the page will delete it.

Part 2: complete and submit the GST registration form

  • In “My registered request”, click on modify the form and fill in the details. To complete the details, it is best to seek advice from your tax advisor / CA / accountant.

Part 3: How to get a digital signing certificate

All GST registrations require a digital signature certificate or DSC, and the business must obtain one for each signature approved.

To obtain a DSC, go to and contact any certification body there.

You will also receive a DSC dongle once the DSC software is installed.

To sign the TPS form using DSC, the GST Portal advises using Emsigner, which you can download from their website.

Part 4: Complete and submit the GST registration form

As noted below, there are three ways to submit your GST registration request:

  • Verifying the use of the DSC approach and obtaining the necessary software / tools
  • Verification with eSignature, which sends an OTP to your Aadhaar registered phone number
  • You will need to enter an OTP sent to your registered mobile number to verify with an EVC (Electronic Verification Code).

At the end of the line

Commercial loans are an essential part of small businesses. Ziploan offers loans up to Rs. 7.5 Lakh, excluding additional loans.

Start your business trip today with Ziploan!

Frequently Asked Questions

What government loans are available for small businesses?

Government loan programs for small businesses in India

1) MSME business loans for start-ups in 59 minutes
2) Pradhan Mantri Mudra Yojana (PMMY)
3) SIDBI Make In India Soft Loan Fund for MPMEs (SMILE)
4) Micro and Small Business Credit Guarantee Trust Fund (CGTMSE)
5) standing India
6) Business line of credit
7) Working capital loan

Who is eligible for the Pradhan Mantri Mudra Yojana?

The minimum age of the applicant must be 18 years old and the maximum age limit for the Mudra loan is set at 65 years old. The loans can be used by non-farm income-generating businesses in trade, manufacturing and services. The credit requirement must be ₹ 10 Lakh or less.

What are the documents required for the Mudra loan?

Documents required for Pradhan Mantri Mudra Yojana
1) Mudra request form
2) Vehicle loan application form
3) 2 passport-size color photographs
4) Proof of identity with photo
5) Proof of address
6) Proof of income
7) Bank statement (last 6 months)

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