Empowering Entrepreneurs: Government Business Loan Schemes in India (2025)

In India, the government has introduced several business loan schemes to support entrepreneurs, startups, and MSMEs. These schemes aim to provide financial assistance, promote self-employment, and boost economic growth. Below is an overview of some prominent government-backed business loan schemes active in 2025:

1. Pradhan Mantri MUDRA Yojana (PMMY)

Overview:
Launched to provide financial support to micro and small enterprises, PMMY offers collateral-free loans up to ₹10 lakh through banks, NBFCs, and microfinance institutions.

Loan Categories:

• Shishu: Loans up to ₹50,000

• Kishore: Loans from ₹50,001 to ₹5 lakh

• Tarun: Loans from ₹5,00,001 to ₹10 lakh

Purpose:
Funds can be used for business expansion, equipment purchase, or working capital needs.

Eligibility:
Non-corporate small business segments, including proprietorships and partnerships in manufacturing, trading, and service sectors.

Application Process:
Applicants can apply through participating financial institutions or online via the JanSamarth Portal.

2. MSME Loan Scheme in 59 Minutes

Overview:
This scheme facilitates quick approval of loans up to ₹1 crore for MSMEs through a streamlined online process, with in-principle approval granted within 59 minutes.

Features:

• Loan Amount: Up to ₹1 crore

• Interest Rate: Competitive rates linked to the applicant's credit profile

• Processing Time: Approval in 59 minutes; disbursal within 7-8 working days

Eligibility:
Existing businesses with GST registration, income tax returns for the previous year, and bank statements for the last six months.

Application Process:
Apply online through the official portal.

3. Stand-Up India Scheme

Overview:
Aimed at promoting entrepreneurship among women and marginalized communities, this scheme provides loans ranging from ₹10 lakh to ₹1 crore for setting up greenfield enterprises.

Purpose:
Funds can be used for setting up new manufacturing, trading, or service sector enterprises.

Eligibility:

• SC/ST and/or women entrepreneurs

• Age: 18 years and above

• The enterprise should be a new venture

Application Process:
Applications can be submitted through the Stand-Up India portal.

4. Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE)

Overview:
CGTMSE provides credit guarantees to financial institutions for loans extended to micro and small enterprises, enabling collateral-free lending.

Features:

• Loan Amount: Up to ₹2 crore

• Guarantee Cover: Up to 75% of the loan amount

Eligibility:
New and existing micro and small enterprises engaged in manufacturing or service activities.

Application Process:
Loans can be availed through member lending institutions, including banks and NBFCs.

5. National Small Industries Corporation (NSIC) Subsidy

Overview:
NSIC offers various schemes to support small enterprises, including raw material assistance, marketing support, and credit facilitation.

Features:

• Raw Material Assistance: Helps MSMEs by financing the purchase of raw materials

• Marketing Support: Assists in marketing products and services

• Credit Facilitation: Helps in obtaining loans from banks

Eligibility:
Micro and small enterprises registered with NSIC.

Application Process:
Apply through the NSIC website.

6. Udyogini Scheme

Overview:
Designed to empower women entrepreneurs, the Udyogini Scheme provides financial assistance to women for starting or expanding businesses.

Features:

• Loan Amount: Up to ₹15 lakh

• Interest Rate: Subsidized rates for eligible applicants

Eligibility:

• Women entrepreneurs aged between 18 to 55 years

• Annual family income should not exceed ₹1.5 lakh (may vary by state)

Application Process:
Applications can be submitted through participating banks and financial institutions.

7. Atal Innovation Mission (AIM)

Overview:
AIM is a flagship initiative by NITI Aayog to promote innovation and entrepreneurship across India. It supports startups through various programs and funding opportunities.

Key Programs:

• Atal Incubation Centres (AICs): Provide infrastructure and support to startups

• Atal Tinkering Labs (ATLs): Foster innovation in schools

• Atal Community Innovation Centres (ACICs): Encourage innovation in underserved regions

Application Process:
Startups and institutions can apply through the AIM website.

8. Credit Guarantee Scheme for Startups (CGSS)

Overview:
CGSS aims to provide credit guarantees to startups for loans extended by scheduled commercial banks, NBFCs, and AIFs.

Features:

• Guarantee Cover: Up to 80% of the loan amount

• Loan Amount: As per the lender's discretion

Eligibility:
Startups recognized by the Department for Promotion of Industry and Internal Trade (DPIIT).

Application Process:
Startups can approach eligible lending institutions for availing loans under this scheme.

Conclusion

The Indian government offers a plethora of business loan schemes catering to various segments of entrepreneurs and enterprises. These schemes provide financial support, promote inclusive growth, and foster innovation. Aspiring entrepreneurs and existing business owners should explore these opportunities to fuel their ventures and contribute to the nation's economic development.

For more information and to apply for these schemes, visit the JanSamarth Portal, a unified platform for government-sponsored schemes.

Disclaimer

The information provided in this blog is for general informational purposes only. While we strive to keep the content accurate and up-to-date, government schemes, eligibility criteria, and loan terms are subject to change without prior notice. Readers are advised to verify details with the official websites of the respective schemes or consult with a financial advisor or bank representative before making any financial decisions. We do not guarantee the approval of any loan or financial assistance based on the information shared in this article.