How to get Small Business Loan in india 2022

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Small Business loan

  1. Private small Business Loan
  2. Public sector small business loan
  3. Govt. small Business Loan

The private sector for Small Business Loan 

Private business loans are offered by private financial companies and banks provide small business loans for their customers.

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Top private banks in India

  • HDFC Bank,
  • ICICI Bank,
  • Kotak Mahindra Bank,
  • Axis Bank,
  • IDBI Bank
  • J&K bank
  • IndusInd Bank
  • RBL Bank
  • YES Bank
  • Federal Bank

Public sector For Small Business loan

Public sector banks also provide you with a small business loan. Some top public sector banks that are giving you a small business loan are:

  • SBI Bank
  • PNB Bank
  • Bank of India
  • UCO Bank
  • Bank of Maharashtra
  • Union Bank of India
  • Canara bank
  • Bank of Baroda
  • The central bank of India
  • Indian oversea bank
  • Punjab and Sind bank

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General Eligibility Criteria for applying for the loan.
  • Nationality. Indian.
  • Age. 21 years to 67 years*
  • Work status. Salaried.
  • Employment. MNC, public or private company.
  • Salary. Rs. 22,000 or higher, based on your city of employment.
  • CIBIL score. 750 or higher.

Documents Required

Salaried Applicants

  • Application form with photograph
  • Identity and address proof
  • Last 6 months’ bank account statement
  • Latest Salary Slip
  • Form 16

Self-Employed Applicants

  • Application form with photograph
  • Identity and address proof
  • Last 6 months’ bank account statement
  • Proof of business
  • Business profile
  • Income Tax returns (self and business) for the last three years
  • Profit/loss statements and balance sheets for the last three years

How to apply for a loan 

  • Offline 
  • Online

At first, you need to determine the amount of the loan. Secondly, find the installments price.

Steps of the follow :

Step 1: Choose the lender you would like to borrow from based on your research and check for your eligibility.

Step 2: Visit the bank branch or their official website to apply for the loan.

Step 3: Submit or upload all the necessary documents and proofs.

Step 4: The bank will process your application and get in touch with you to inform their stand within the stipulated time frame.

Loan EMI Calculator

A Loan EMI Calculator is a convenient tool to calculate the monthly amount expected to the lender as well as the total interest. To calculate the EMI suitable for your loan amount, all you need to do is enter the values for:

  • principal Amount (P),
  • Time duration (N), and
  • Rate of interest (R).

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Govt Scheme for Small Business loan

Top 5 govt schemes for a small business loans

1. MSME Loan in 59 Minutes

2. Pradhan Mantri MUDRA Yojana (PMMY)

3. Credit Guarantee Fund Scheme for Micro and Small Enterprises (CGFMSE)

4. National Small Industries Corporation (NSIC)

5. Credit Linked Capital Subsidy Scheme (CLCSS)

1. MSME

Under this scheme, MSMEs can get loan amounts from INR 1 lakh to INR 5 crores in less than 59 minutes at an interest rate of 8.50% from public and private sector banks and NBFCs (Non-Banking financial companies).

MSME/PSB Loans in 59 minutes provides you with the required financial resources in the stipulated time and pretty quickly.

PMMY ( Pradhan Mantri MUDRA Yojana)

MUDRA stands for Micro Units Development and Refinance Agency Ltd.

MUDRA provides refinancing support to Banks and NBFCs for lending to Micro units having loan requirements up to INR 10 lakhs under the scheme of Pradhan Mantri MUDRA Yojana.

Under PMMY, MUDRA divided the loan into three categories as ‘Shishu’, ‘Kishore’, and ‘Tarun’  to signify the stage of growth/development

CGFMSE (Credit Guarantee Fund Scheme for Micro and Small Enterprises)

CGFMSE is a Government business loan scheme launched by the Government of India (‘GOI’) allowing collateral-free credit to the MSME sector. It includes both currents as well as new enterprises.

The Ministry of MSMEs and Small Industries Development BOI (SIDBI) established a Trust named Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) to execute CGFMSE scheme. Under this funding scheme, MSMEs get access to a loan amount of up to INR 200 lakhs with a special preference for eligible women.

The Guarantee Cover is available to the scope of a maximum of 85% of the sanctioned amount of the credit facility. The fees charged by the trust funds are 1% per annum of the amount sanctioned:

  1. 0.75% for credit up to Rs. 5 lakh;
  2. 0.85% for credit above Rs. 5 lakh but up to Rs 100 lakh

As per the eligibility criteria, the already existing or newly established enterprises that are engaged in the following activities are eligible for this scheme,

1. Manufacturing activity

  1. Retail trade;
  2. Educational institutions;
  3. Self-help groups;
  4. Training institutions. 

2. Service activity

NSIC (National Small Industries Corporation)

NSIC is an ISO-certified Indian Government enterprise under MSMEs. It is working to aid and promote the growth of MSMEs by providing combined support services encircling finance, marketing, technology, and other allied services all across the nation.

  • Marketing support scheme
  • credit support scheme

CLCSS(Credit Linked Capital Subsidy Scheme)

  • It provides a 15% subsidy for buying an eligible plant, equipment, and machinery which helps in reducing the overall load of small scale industries;
  • Help small scale industries to boost the latest and required technologies,
  • It boosts the growth of rural industries which can now manufacture high-quality products.

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