MSMEs (Micro, Small and Medium Enterprises) are essential to the economic growth of a country. MSMEs are always an excellent answer to significant financial issues, including poverty, unemployment, income inequality, regional imbalances, etc.

For this reason, the government has developed several initiatives to provide loans to MSMEs to help them grow their businesses and economies. Entrepreneurs who manage such MSMEs might borrow money in the form of a loan under appropriate programs like PM SVANidhi for their needs.

Top government schemes for MSMEs

 MSME loan in 59 minutes

One of the most popular loan initiatives established by the government in September 2018 is the MSME business loan in 59 minutes. The loans approved under this plan intend to provide financial help to the country’s growth and stimulate growth.

MSMEs can access loans from public and private sector banks and NBFCs for amounts ranging from INR 1 lakh to INR 5 crores in less than 59 minutes at an interest rate of 8.50 percent under this plan (Non-Banking financial companies). MSME/PSB Loans in 59 Minutes supplies you with the necessary financial resources in a timely and efficient manner.

The loans offered under these programs range from Rs. 1 crore to Rs. 1 crore and take 8 to 12 days to complete. The permission for the loan comes in 59 minutes, which is why the scheme is called MSME business loan in 59 minutes.

The following are the criteria for obtaining a loan through this program:

  • GST verifications
  • Income tax verifications
  • Account statements for the last six months
  • Documentation about ownership
  • KYC details
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Mudra loans

MUDRA loans get approved by the Micro-Units Development and Refinance Agency, which the Indian government founded to provide financing to micro-business units. MUDRA loans have the theme of “funding the underfunded.”

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Low-cost finance for micro and small firms was born as a result of these loans.

Standup India

The state established the Stand-up India scheme to provide loans to businesses run by Scheduled Castes/ Tribal Communities and women. Loans amounting from Rs. 10 lakhs to Rs. 1 crore are offered in this scheme.

Each bank must provide a loan to at least one Scheduled Caste/Scheduled Tribe or women entrepreneur. According to the loan terms, the fund will cover approximately 75% of the overall project cost.

This program is open to businesses in the trading, manufacturing, and other service-related sectors. If the company is not a sole proprietorship, a minimum of 51 percent of the shares must get held by a woman or a Scheduled Caste/ Scheduled Tribe member.

National small industries corporation subsidy

The NSIC is an ISO-certified government enterprise offering schemes for MSMEs. One of its primary responsibilities is to help MSMEs expand by providing financial, technological, market, and other services across the country. It initiated two schemes to support the growth of MSMEs further:

Marketing Support Scheme: This program aids in the development of any business by implementing programs such as Consortia and Tender Marketing. Such a program is critical since MSMEs require assistance to expand in today’s competitive market.

Credit Support Scheme: The NSIC provides financial assistance for procuring raw materials, marketing operations, and syndication financing with banks for MSMEs.

Do small businesses need GST registration?

GST is the most open and self-policing tax system that is also the most straightforward to manage and govern. To run a smooth business, all makers and providers of goods and services must register under GST. India’s products will be competitive in both home and foreign markets under the new regime.

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Failure to obtain a GST registration for a small business in India results in a direct penalty of up to Rs. 10,000. The sentence might be as much as 100% of the amount you owe in taxes. This new tax structure holds a lot of promise for the country’s future prosperity.

Working Capital Loan

GST registration process step by step

The GST registration process gets divided into four steps.

Part 1: Creating a GST Application

  • Step 1: Go to the GST portal and select Services > Registration > New Registration from the drop-down menu.
  • Step 2: Fill in all required information, including your PAN, email address, and phone number.
  • Step 3: An OTP will get sent to your phone and email, and it will be valid for 10 minutes. It will generate your Temporary Reference number once you enter your OTP.
  • Step 4: Return to the GST portal and log in with your Temporary Reference Number (TRN) by clicking Services > Registration > New Registration > Temporary Reference Number (TRN).
  • Step 5: After completing the captcha, you must confirm your identity with a new OTP.
  • Step 6: After your OTP gets verified, it will direct you to the “My Saved Application” page, where you must fill out all of the required information and submit it within 15 days, or the page will delete it.

Part 2: completing and submitting the GST registration form

  • In the “My Saved Application,” click modify the form and fill in the details. For filling in the details, it’s best to seek advice from your Tax Consultant/CA/Accountant.

Part 3: How to Obtain a Digital Signature Certificate 

All GST registrations require a Digital Signature Certificate or DSC, and the business should obtain one for each approved signature.

To obtain a DSC, go to www.cca.gov.in and contact any certifying body there.

You will also receive a DSC dongle once the DSC software gets installed.

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For signing the GST form using DSC, the GST portal advises utilizing Emsigner, which you can download from their website.

Part 4: Filling Out and Submitting the GST Registration Form

As listed below, there are three ways to submit your GST registration application:

  • Verifying utilizing the DSC approach and obtaining the necessary software/tools
  • Verifying with eSignature, which sends an OTP to your Aadhaar registered phone number
  • You will have to enter an OTP sent on your registered mobile number to verify with an EVC (Electronic Verification Code).

Bottom line

Business loans are an essential part of small businesses. Ziploan offers loans up to Rs. 7.5 Lakh, excluding top-up loans. 

Begin your business journey today with Ziploan!

Frequently Asked Questions

What government loans are available for small businesses?

Government Loan Schemes For Small Businesses In India

1) MSME Business Loans for Start-ups In 59 Minutes
2) Pradhan Mantri Mudra Yojana (PMMY)
3) SIDBI Make In India Soft Loan Fund For MSMEs (SMILE)
4) Credit Guarantee Fund Trust for Micro And Small Enterprises (CGTMSE)
5) Stand-Up India
6) Business Line of Credit
7) Working Capital Loan

Who is eligible for Pradhan Mantri Mudra Yojana?

The minimum age of the applicant must be 18 years and the maximum Mudra Loan age limit is set to 65 years. Loans can be availed by non-farm income-generating businesses in trading, manufacturing, and services. The requirement of credit must be ₹ 10 Lakh or lower.

What are the documents required for Mudra loan?

Documents Required for Pradhan Mantri Mudra Yojana
1) Mudra application form
2) Vehicle loan application form
3) 2 passport size colour photographs
4) Photo Identity proof
5) Address proof
6) Income proof
7) Bank statement (last 6 months)

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