Do the pashmina shawls from Kashmir entice you? Or do the metallic threads on your mother’s saree make you want to wear it? India has different yarn manufacturing industries. Every corner of this country brings you ambivalent shades and textures of yarn. 

Yarn manufacturing industries are involved in processing the fibres into yarns which are then knitted or woven based on what product it is being used for.

Yarn manufacturing is the spinal cord of India’s textile industry. As a result, the government has been an active supporter of this type of industry. 

In India, most of the textile industry is classified as Micro. Small and Medium Enterprises (MSME). The government offers financial and other provisions to the textile industry through its various schemes and loans.

It aids such types of industry to find themselves a financial backup and gradually find themselves a market to remain stable. 

Currently, the government has multitudes of loans and schemes to assist those who plan to open a yarn manufacturing business in India. The provision of such textile business loans is meant to offer the capital required to begin the industry. 

textile loan

What are the loans and schemes for the yarn manufacturing industry?

If you want to start your yarn manufacturing enterprise but require support, the best way to get assistance is through textile business loans or schemes. Here are the names of loans and schemes available for those who are searching for opportunities to enter the Indian textile and yarn manufacturing industry:

  1. ATUFS-Amended Technology Upgradation Fund Scheme: Launched by the Ministry of Textile, Government of India, this textile business loan promotes ‘Make in India’. Under this initiative, the government looks forward to offering a one-time capital subsidy to assist in investment, production, employment, import, and export substitution for any kind of textile industry.

This is a credit-linked scheme, and those projects are covered under the prescribed amount of loans, but the lenders will only be eligible for this. Here are some other criteria to fulfil to be eligible for this scheme:

  • Enterprises are for processing yarns, fabrics, and garments.
  • Handloom enterprises, silk enterprises, jute enterprises
  • Garment manufacturing
  • Weaving and knitting industry  
  • Technical textiles
  1. CLCSS- Credit Linked Capital Subsidy Scheme for Technology Upgradation: This MSME business loan aims to assist small, micro and medium enterprises in acquiring the technology. The scheme provides a 15% capital subsidy for the enterprises to avail well-equipped technology. This MSME business loan ensures that there is an equal acquisition of technology for the industries. 
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    The entities which can avail of this scheme are:

  • New as well as existing enterprises (all kinds)
  • Small micro-enterprises are situated in semi-urban and rural areas. 
  • Village industries, sole-proprietorship, tiny industries, small private limited companies. 
  1. Stand Up India scheme: This government-funded scheme was introduced specifically for SC/ST and women who wish to start their business. The Stand Up India scheme aims to provide loans between 10 lakh to 1 crore. It also aims to provide at least SC, ST, and women borrowers in each branch. This kind of government offered loan boosts the participation of a staggering part of society in the country’s entrepreneurial progress. 

    The required eligibility for this scheme are:

  • SC/ST/ women above 18 years old. 
  • The scheme is available for greenfield projects, that is, for first-time ventures.
  • For non-individual enterprises, 51% share must be handled by SC/ST or women to get the loan. 
  • The borrower must not be associated with any financial institution. 

Apart from government-run schemes and loans, there are other forms of loans that trusted lending companies offer. Here is a list of loans and schemes you can get apart from the governmental organizations:

  1. Flexi Loans: This type of loan refers to accessing the amount you want as a loan and paying it when you have enough funds. This loan allows you to process free part prepayment, wherein you can prepay the loan amount whenever you have enough funds. 
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You can also have access to this loan through an online mode. You can also withdraw the fund anytime, as per your requirement. This loan also reduces your burden as the interest is required to pay less. You need not give any collateral pledges or security to the lender in this type of loan. 

           The eligibility for the Flexi loans are:

  • Anyone who receives a salary or is self-employed can apply for this loan. However, there might be other criteria for this which is dependent on lenders.
  • Those who have higher credit scores are more likely to get approval for this loan.

Apart from these basic eligibility requirements, some lenders also take note of your age, income, profession, and existing liabilities in financial terms. 

  1. Ziploan Business Loans: Avail a maximum of INR 7.5 lakh small business loan from Ziploan within 3 days*. The small business loan from Ziploan is perfect for giving your small business the much-needed boost to help your business scale tremendous heights to profitability. You can use the funds to invest in your infrastructure, upgrade your machinery, increase working capital, or expand your operations.

            The eligibility criteria to avail of the Ziploan business loan is:

  •  The loanee must be between 24 to 70 years of age. At the maturity of the loan, the loanee must be under or 70 years of age.
  • The business you want to avail the loan for must have a vintage of at least 2 years, i.e., it must be operational for at least 2 years.
  • The last ITR should be more than Rs.1.5 lakh.

Apply for Business Loan

These are some schemes and loans to which aspiring individuals can have access to establish their yarn industry. These schemes and textile business loans vary on different bases and can assist you at different steps of your yarn industry. 

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You can also approach different lending agencies and companies that provide easy application steps, repayment of the amount, and less interest. You also approach financial institutions which specialize in assisting small industries and startups. 

Some of the financial institutions which provide aid to blooming ventures are the Industrial Developmental Bank of India (IDBI), Small Industries Development Fund (SIDF), Small Industries Development Bank of India (SIDBI), Commercial banks, and many more. 

Now that you know what textile business loan you can take to expand your yarn industry, read more about loans on our website.

textile loan

Frequently Asked Questions

What is yarn manufacturing?

Yarn is defined as a linear assemblage of the fibers twisted together. The process of making the yarn from a textile fiber is called Spinning. The so-called “spun yarns” are yarns made from staple fibers (for example cotton and cut man-made fibers). All other yarns are made from man-made fibers.

How do I start a textile manufacturing business?

1) Research the market- Understand the product demand, competition, and existing prices in the market.
2) Choose the right suppliers- Source the right fabric or other raw materials by finding manufacturers or vendors who offer good quality along with a wide variety of materials.

Is the textile industry profitable?

The Textile industry is basically concerned with the design, production, and distribution or marketing of Yarn, Fabrics, or readymade clothing. This industry is considered profitable for new and aspiring entrepreneurs.

Is yarn cotton?

Yarn is made from many different fibers — animal, plant, and vegetable. Animal fibers include wool, mohair, angora, silk, cashmere, llama, alpaca, and qiviut (musk ox) and are made of mostly protein. Cotton, linen, and ramie are vegetable fibers.

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Textile Business Loan