Small businesses in India have an array of government loan and funding schemes designed to foster growth, innovation, and entrepreneurship. This guide covers the 7 most popular schemes, their eligibility criteria, and step-by-step application processes to help entrepreneurs secure much-needed financial support.

1. Pradhan Mantri Mudra Yojana (PMMY)

The PMMY provides collateral-free loans up to 10 lakh for non-corporate, non-farm small and micro enterprises—including shopkeepers, service providers, artisans, and traders.
Eligibility: Proprietors, partnership firms, private limited companies, and entities in trading, manufacturing or services sectors.

 
How to Apply:

• Visit any bank or financial institution offering Mudra loans.
• Submit business address, ID proof, business plan, and other required documents.
• Choose between Shishu, Kishore, and Tarun loan categories depending on the required amount.
• Complete application and wait for processing and approval.

2. Prime Minister’s Employment Generation Programme (PMEGP)

Aims at generating employment opportunities via new enterprises in manufacturing and services.
Eligibility: Individuals over 18 years, SHGs, cooperative societies, charitable trusts.
How to Apply:

• Online application via the official PMEGP portal.
• Submit project report, Aadhaar, educational qualification, and other documents.
• Await verification and approval by District Level Task Force.

3. Credit Guarantee Fund Trust for Micro & Small Enterprises (CGTMSE)

Provides collateral-free credit up to 2 crore for eligible MSMEs.
Eligibility: All new and existing MSMEs.
How to Apply:

• Apply for business loans through a participating bank/NBFC.
• Bank will process the guarantee cover under CGTMSE scheme.

4. Credit Linked Capital Subsidy Scheme (CLCSS)

Offers a 15% capital subsidy for technology upgradation of MSMEs.
Eligibility: Manufacturing units needing modern equipment.
How to Apply:

• Apply through a government-approved lending bank.
• Submit technology upgradation proposal, quotations, and identity documents.

5. SIDBI Make in India Soft Loan Fund for MSMEs (SMILE)

Focused on funding new/existing MSMEs to bridge debt-equity gaps.
Eligibility: New or expanding MSMEs in manufacturing or services.
How to Apply:

• Visit SIDBI official website, complete the online application for SMILE loan.
• Upload business validation documents, proposals, and identity proofs.
• SIDBI assesses and disburses funds post-approval.

6. Stand-Up India Scheme

Caters specifically to women entrepreneurs and SC/ST category, providing loans between 10 lakh and 1 crore.
Eligibility: At least one SC/ST or woman borrower per bank branch for greenfield enterprises.
How to Apply:

• Apply via Stand-Up India portal or at any bank branch.
• Furnish business documents and eligibility proof.

7. Startup India Initiatives (FFS, CGSS, SISFS)

Includes Fund of Funds for Startups (FFS), Credit Guarantee Scheme for Startups (CGSS), and Seed Fund Scheme (SISFS), aimed at fueling innovation and seed-stage growth.
Eligibility: Registered startups with DIPP recognition.
How to Apply:

• Register on Startup India portal.
• Submit business concept, funding requirements, and supporting documents.
• Await selection by partner incubators or venture capitalists.

Summary Table

*15% subsidy on eligible loan.

Action Steps for Entrepreneurs

• Analyze which scheme fits the business need and eligibility.
• Gather required documents (business plan, proof of identity/address, qualification, tax returns).
• Visit official portals or local branches for application.
• Submit detailed and honest information for smooth processing.
• Track application status online or via the bank/institution.