What Are Startup Business Loans in India?
Startup Business Loans are financial assistance programs offered by banks, NBFCs, and the Government of India to help new entrepreneurs launch or expand their businesses. These loans can be used for: Machinery & equipment purchase, Working capital, Business setup, Product development, Marketing & operations. Most startup loans do not require collateral, especially when offered under government-backed schemes like Mudra, PMEGP, Stand-Up India, and CGTMSE.
Benefits of Startup Business Loans Startup loans offer several advantages that support new entrepreneurs: 1. Easy Access to Funding Both government and private lenders offer loans with minimal documentation, making it easier for first-time entrepreneurs. 2. Low Interest Rates Government schemes offer subsidised or lower interest rates compared to traditional business loans. 3. No Collateral Required Loans up to ₹10 lakh under Mudra or ₹1 crore under CGTMSE are available without collateral. 4. Supports New & Innovative Businesses Startups in manufacturing, services, tech, food processing, retail, and rural businesses can all apply. 5. Flexible Repayment Terms Repayment periods range from 3 to 7 years, depending on the loan type and lender. Eligibility Criteria for Startup Business Loans in India (2026) Eligibility varies by scheme and lender, but general requirements include: Must be an Indian resident aged 18–65 Business must be new or in early stage (0–5 years) A viable business idea or project report Clean financial record or good banking history No loan defaults in the past Basic documents like Aadhaar, PAN, bank statements, and project plan Banks may also evaluate your business model, expected revenues, market demand, and repayment capacity. Documents Required for Startup Loans Common documents required across banks and schemes: Aadhaar Card & PAN Card Address Proof (Utility bills, or rent agreement) Income proof (Bank statements of last 6–12 months) Proof of Business Top Startup Loan Schemes in India Here are the best government and bank-backed schemes for startups: 1. Mudra Loan (PMMY) Mudra loans are ideal for small and micro startups with low initial investment. Loan Category: Shishu (up to ₹50,000), Kishore (₹50,000–₹5 lakh), Tarun (₹5–10 lakh). Features: No collateral, Easy online & offline application for small service, manufacturing, and trading startups 2. PMEGP Loan (Prime Minister Employment Generation Programme) is designed for new manufacturing and service startups. Loan Limit: Up to ₹50 lakh (manufacturing), Up to ₹20 lakh (service). Subsidy: 15%–35% from the Government of India. Best for those starting small factories, food processing units, service centres, and rural enterprises. 3. Stand-Up India Scheme The Stand-Up India Scheme aims to promote entrepreneurship among women and members of the Scheduled Castes (SC) and the Scheduled Tribes (ST). It facilitates startup MSME loans of up to ₹1 crore for setting up greenfield projects (business built from scratch). Loan Amount: ₹10 to ₹1 crore Target Beneficiaries: Women and Members of SC/ST categories Loan Type: Term and Working Capital Loans Collateral: Not required Eligible Industries: Manufacturing, services, trading, or the agri-allied sectors. 4. CGTMSE Loan (Credit Guarantee Fund Trust for Micro CGTMSE provides collateral-free credit with a partial guarantee from the government. The scheme aims to empower small and micro enterprises (SMEs) by offering them credit up to ₹10 crore. It allows businesses to acquire loans at low interest rates without requiring collateral. Loan Coverage Amount: Up to ₹10 crore Collateral: Not required Guarantee Coverage Percentage: 75%–85% (85%–90% for women entrepreneurs and micro enterprises) Loan Types: Term Loans and Working Capital Loans How to Apply for Startup Business Loans Here is the step-by-step process to apply for a sharda associates business loan: Choose the Right Loan Scheme Decide whether your business fits Mudra, PMEGP, Stand-Up India, or CGTMSE. Prepare a Strong Business Plan / Project Report. Banks evaluate feasibility, profitability, and repayment capacity. A clear project report can boost approval significantly. Collect All Required Documents. Keep Aadhaar, PAN, bank statements, project report, and quotations ready. Apply Online or Visit the Ban.k Most schemes allow online applications, or you can apply directly through your nearest bank branch. Bank Verification & Appraisal The bank verifies your documents, business model, financial capacity, and credit history. Loan Approval & Disbursement Once approved, the amount is transferred to your business account. For PMEGP, Stand-Up India, etc., subsidy is managed by the respective authorities. Submitting the right documents is the first step toward getting a loan approved. With Sharda Associates, the process is minimal, secure, and fully online, making it easier than ever for entrepreneurs, traders, and small business owners to access funds. Funding is necessary at every stage of the business. However, it plays a crucial role in expanding and growing the business. At Sharda Associates, we offer a low-interest business loan that does not require any collateral. Apply for a business loan of up to ₹25 to steer your business towards growth and success. Which Scheme Is Best for Your Startup? Small service startups: Mudra Shishu / Kishore Manufacturing units: PMEGP or CGTMSE Women-led businesses: Stand-Up India Tech startups: Startup India Seed Fund Rural or micro-enterprises: PMEGP & Mudra Choosing the right scheme improves approval chances and reduces repayment burden. Conclusion: Startup loans in India have become highly accessible due to powerful government initiatives and bank-backed funding programs. From Mudra loans for micro-businesses to PMEGP for manufacturing units and Stand-Up India for women entrepreneurs, each scheme is designed to support different types of startups. With simplified eligibility rules, minimal documentation, and collateral-free loans, first-time entrepreneurs can now start their businesses without depending on private financing. A strong project report, good financial discipline, and correct scheme selection are the keys to fast approval. Whether you are launching a tech startup, a retail outlet, a food processing unit, or a service business, India’s startup loan ecosystem offers a clear pathway to turn your idea into a sustainable business. When planned and applied correctly, these schemes can provide the financial foundation required to scale your startup in 2026 and beyond. You can contact us at +91 8989977769 for any query or if you require our services to prepare a project report or a bank loan.
