There will be many of us who either want to open our own business or want to do our already established business. But there are many short of funds either to start their own business or to expand the already established business. In this situation, you can take a loan for your business. But are you also confused about how to take a loan for your business? So today we will tell you complete information related to loans for business.
In this article, we will tell you-
What is a business loan?
If you want to open your own business of any shop, retail shop, wholesale, distributorship, or any promotion or want to start your already established business or new business and you are short of money for this then you can take a loan in. A loan taken for business is called a business loan. When you take a business loan, it is a kind of borrowing from which you have to repay it with interest.
Business Loan Interactions
Loan for business. So you already know but did you know that you can take a loan to fulfill many purposes of your business like-
Increase your company’s cash flow
To build new tools and machines for your business
To increase inventory i.e. stock
to hire seasonal workers
Raw material for large orders
To expand business in another city
To expand your business operations and work on new projects.
Where to get a loan for business
This is done on a categorized basis on a 3-factor basis for business loans. An entrepreneur needs to know how many types of business loans are there and keeping in mind the business requirements, he should take the right type of loan. So we have to come to know how many businesses loans are there and from where we can take business loans-
Government schemes take a business loan
How to take a loan from a bank
Business Loan Schemes for Women Entrepreneurs
Government schemes take a business loan
Where there are plans of the government that it comes, first of all, we talk about MSME i.e. The MSME sector has proved to be the most dynamic and vibrant sector of the Indian economy in the last 5 years. The MSME sector comes under the Government of India and supports existing enterprises and encourages new enterprises with the cooperation of the concerned departments, state governments, and stakeholders. MSMEs also provide some of their schemes through business loans like credit guarantee schemes, coir entrepreneur schemes, etc.
Many schemes have been made by the Government of India to promote small businesses and start-ups by which an entrepreneur can take loans. So let’s come to some such government schemes-
Credit Guarantee Scheme (CGS)
CGS for Micro and Small Enterprises has been started by the Government of India to provide credit facilities to these sectors without any collateral. Both new and existing businesses are covered under this plan. These schemes provide a reasonable rate of small business loans to micro enterprises and first-generation entrepreneurs who are Karti. The loan amount depends on the eligibility of the applicant under this scheme and the viability of their business. The maximum limit of this scheme is less than 1 crore.
Mudra Loan Scheme
The objective of the MUDRA (Micro Units Development and Refinance Agency Limited) scheme is to provide business loans to micro units and non-corporate small business sectors. No collateral is required to obtain a loan under this plan. Under the Mudra Loan Scheme, you can take advantage of these types of loans-
Shishu- Under this scheme, you get a loan up to Rs.50,000 without collateral at a 1% interest rate/per month and the loan amount is repayable after 5 years.
Kishor- Under this plan, you have got a loan ranging from Rs 50,000 to Rs 5,00,000.
Tarun- Under this plan, you have got a loan ranging from Rs 5,00,000 to Rs 10,00,000.
Mudra loans are given considering the business stage and funding requirement.
Stand-up India Scheme
The Stand-up India scheme provides loans ranging from Rs 10,00,000 to Rs 1 crore to at least 1 scheduled caste (SC) or scheduled tribe borrower to set up a greenfield enterprise. Stand-up India is a special government scheme that provides loans to SC/ST and women entrepreneurs to empower them financially. The loan period is 7 years.
Coir entrepreneur scheme
Coir units are set up under this scheme across India. The scheme provides funding for projects undertaken between Rs 10,00,000 and working capital of one cycle. Its under-provided funds i.e. loan should not exceed 25% of the total project cost. The loan has to be repaid under this scheme in 7 years.
(NABARD) – National Bank for Agriculture & Rural Development
NABARD is a development bank whose objective is to provide loans and other facilities and to develop agriculture, cottage and small-scale industries, village industries. NABARD provides loans in rural areas.
2. How to take a loan from a bank
Now you have come to know that how you can take loans for your business through government schemes like Mudra loan etc. So come now to know how to take a loan from a bank in Hindi-
As the name suggests, overdraft means overdrawing from your current account. You will be charged a fixed interest rate for availing of the ISS facility. If you do not overdraw from your account, you will not be charged for it.
Term loans can be taken for short-term, long-term, and intermediate-term. There are 2 types of term loans- secured business loans and unsecured business loans. You need to keep collateral with the bank for taking a secured business loan and an unsecured business loan does not require any promotional collateral or security. The interest rate of a secured business loan is lower than that of an unsecured business loan.
Bill discounting is an instant cashback method. For this, you have to show Bills of Exchange, in whose return you have received cash which is less than the amount mentioned in the bill. To provide this you need some important documents like challans, transport receipts, etc.
Letter of credit
Letter of Credit is also known as LC. It is generally used for international business.
3. Business Loan Schemes for Women Entrepreneurs
When it comes to contributing to society, a woman is a strong force in any kind of business. Banks have understood the women’s inn capabilities and offer small business loans to women running a successful business without the need for financial help. Financial institutions like banks and NBFCs have come up with many schemes for women entrepreneurs. So come about these schemes-
St. Kalyani Scheme
This scheme is offered by the Central Bank. Women can take loans to start businesses. Loans are offered to New Yes Experienced, Business Owners of all types, Self Employed, and Professionals. Women who are entrepreneurs in the field of agriculture and cottage industries have the power to take loans under the scheme.
Stree Shakti Package for Women Entrepreneurs
This scheme is offered to those women entrepreneurs who have up to 50% ownership in small businesses. For this, women entrepreneurs have to participate in the Entrepreneurship Development Program (EDP) organized by the state agency. Under this scheme, there is a 0.05% concession on interest for women entrepreneurs, but this interest concession can be availed by women only when the loan amount is more than Rs. 2,00,000.
Dena power plan
This scheme has come out by Dena Bank through which they promote women-owned businesses to provide financial assistance to women entrepreneurs. For taking loans under this scheme, a concession of 0.25% is available at the interest rate equal to. Women who run small enterprises, microcredit, or retail stores can avail of loans under the scheme.
This scheme is offered by Punjab and Sind Bank to motivate women entrepreneurs. Loans are made available to women entrepreneurs under this scheme to do small-scale industries at those low-interest rates. Loans are also provided to retail traders and self-employed women entrepreneurs under the ongoing scheme.
Women enterprise fund scheme
This scheme is offered by Small Industries Development Bank (SIDBI) to women entrepreneurs. 10,00,000 loans up to Rs 10,00,000 are given under this scheme under SIDBI Dwar, provided to women to start a new business in small-scale sectors.