Are you a small business looking for capital to boost your business to start one? While several private banks offer MSME loans, you could consider taking a look at these small business loans by the government of india.
Types of Small Business Loans
Working Capital Loan:
Working capital is your business’s daily operational cash flow. It is money you need to meet your day-to-day business expenses.
All your operational costs come under working capital and some loans are crafted to suit your working capital needs alone. The loans are offered typically for a 12-month tenure and have an interest rate of 12%- 16%. These can be either secured or unsecured.
Cooperative Term Loan:
If you want to make investments in specific business areas or have an ongoing need for working capital, you van apply for a corporate term loan.
Therefore, if you are starting up, you may want to look at term loans/ funding. These are large sums of money borrowed from banks or financial institutions that are expected to be repaid over a longer time.
These loans are secured and have a longer tenure and the interest rate is negotiable. They can be converted into equity options and also have tax benefits.
Line of Credits:
Line of credit is an ideal small business loan for those who need financial aid at regular intervals.
With a Line of Credit, the business can apply for a loan amount without taking the entire amount in one shot. This loan has credit lines from which the business can draw funds at any time, without going through an application process.
This can be secured or unsecured.
5 Small Business Loans By the Government
- The Credit Guarantee Fund Scheme for Micro and Small Enterprise(CGS)
- The MUDRA Loan Scheme
- Stand Up India Scheme
- National Small Industries Corporation Subsidy
- Credit Link Capital Subsidy Scheme