Accessing capital is one of the biggest hindrances that each and every corporate establishment faces, especially budding ones. However, it is always thrilling to put a business plan in motion.
Fortunately, the government has several programs that explicitly grant credit assistance to start-ups. Below are different options of loans available to start-ups through government programs and the proving advantage of those options.
Benefits of start-up loans
- Tax benefits: New entrepreneurs are exempt from paying taxes for not more than three years.
- Low interest rates: Government loans are much cheaper than venture capital simply because the terms of the loans allow investors to consider asking for returns.
- Access to local banks & NBFCs: There are many local and commercial banks and NBFCs, so it’s easier for entrepreneurs to acquire credit facilities in India.
- Greater assurance: Banks will not seek personal liability from borrowers over the success or failure of a company as private investors often do.
Best government loan schemes for start-up in 2025
1) Raw Materials Assistance
The program, run by the National Small Industries Corporation (NSIC), provides loan guarantees, invoice discounting, and credit facilitation for strengthening MSMEs and start-ups. It eases the job of the business owners, as all documentation formalities are taken care of by the government.
2) CGT SME
This scheme is a very good start-up funding scheme in India, run by the Ministry of MSME in association with SIDBI. Eligible start-ups and Micro, Small and Medium Enterprises (MSMEs) can apply for loans with no collateral up to Rs. 1 crore under this scheme.
3) CLCSS
It has been specially designed for technology start-ups. The benefit extended includes financial support for equipment and technology upgrades and a 15% government subsidy for investments up to Rs. 1 crore.
4) Udyam Certificate of Registration
The government simplified registration through the Udyam platform, intending to aid new entrepreneurs by easing the process of registration and availing themselves of benefits because they stay very vital to the economy in job generation and contribution to GDP.
5) MeitY SAMRIDH Scheme
This program aids start-up companies with issues typically encountered-funding problems, quality assurance problems, and a lack of experience. This program is one of the most important government initiatives to assist Indian start-ups.
In conclusion, the start-up loans offered by the government provide major financial support. But the entire process of application can become a cumbersome procedure, needing meticulous financial predictions and documentation. Strict eligibility criteria though may often be a barrier for few firms to qualify for assistance.
(Note: Raising a loan comes with its own risks. So, due caution is advised)
