With many entrepreneurs making their mark and moving ahead with path-breaking strides, startups are no longer a derogatory word, in fact, they have become the current buzzword.

You can avail a Startup business loan from a bank or a financial body in order to raise funds to start a business of your own or expand your current business. The rate of interest charged by the bank will depend on the loan amount availed by you and the repayment tenure.

Business Loan Types and Schemes for Startups By the Indian Government

1. Startup India

Startup India Scheme is an initiative by the Government of India that offers instant business loan for startup for growth and expansion. Other key functions of Startup India include promotion of Startups, wealth creation and employment generation. Register with Startup India to avail business loans at attractive interest rates.

Standup India

Stand-Up India Scheme offers funding to people who come under the SC/ST category and women entrepreneurs of the society. Stand-up India scheme was initiated by the Government of India to provide credit services, majorly to SC/ST category people. The primary purpose of this scheme is to help banks in offering loans between Rs. 10 lakh and Rs. 1 crore to at least one SC/ST applicant and one women entrepreneur, per bank branch in enabling them to start their own business.

MUDRA Scheme

Mudra Yojana under Pradhan Mantri Mudra Yojana (PMMY) offers loans up to Rs. 10 lakh without asking borrowers for any collateral at affordable interest rates. The repayment tenure is up to 5 years and the processing fee is nil. There is no minimum loan amount criteria to borrow. The interest rates shall vary from bank to bank, depending upon applicant’s profile and business requirements.

CGTMSE Scheme

Credit Guarantee Funds Trust for Micro and Small Enterprises (CGTMSE) is another Government initiative that offers funding to MSMEs via financial institutions like banks and NBFCs. Under this scheme first time entrepreneurs and startup enterprises are majorly benefitted. The loan offered under the CGTMSE scheme is collateral-free.

Eligibility Criteria for Startup Business Loan

To avail a startup loan for new business from Fullerton India, some of the eligibility criteria are as follows:

• You should be a resident citizen of India
• You should have a CIBIL score of at least 700
• Your business should have been operational for at least 2 years
• Minimum annual income of your business should be INR 2 lakhs
• Should be between 21 years to 65 years of age

Documents Required for Startup Loan for new Business

The documents required for obtaining a startup business loan from Fullerton India are as follows:

• Identity Proof - Passport, PAN card, Aadhaar card, driver’s license or voters id can serve this purpose.
• Address Proof - Electricity bills, telephone bills, Passport, Aadhaarcard or voters id can serve this purpose
• Proof of Age - Can be submitted by way of a copy of the passport or the PAN card.
• Income Statement - Proof of stable income to be provided
• Bank Statements - The last 6 months' bank statement to be submitted. You can also give a scanned copy of the canceled cheque to give IFSC code proof.
• Signature - Proof of signature to be submitted by bank verified statements or PAN card.
• Photos - 2 copies passport size.
• Financial statements audited by a CA for the past 2 consecutive years
• IT returns for the last 2 consecutive years