Best Way To Get A Start-Up Business Loan | Credit Help India


India is currently regarded as a genuinely emerging market in the world. The country's micro, small, and medium enterprises account for a significant portion of its development. The SME sector accounts for more than 40% of total GDP and is a vital source of jobs for India's rapidly increasing population. Recognizing the importance of SME growth in the post-demonetization period, the government has launched a slew of SME-focused loan programs. Additionally, start-up businesses have the option of obtaining loans from a private lender.


Approaching a bank or NBFC for a business loan is the best choice for start-up businesses. However, before approaching a lender, you should be familiar with the different types of start-up business loans, their characteristics, eligibility requirements, and the necessary documentation to make the process easier. This guide will teach you everything you need to know about start-up business loans so you can choose the best loan product for your needs.


Here are some of the most specific types of loans available in India for start ups.

MUDRA Yojana: The Mudra scheme is extremely common among India's youth. The Micro Units Development and Refinance Agency (MUDRA) loan scheme is a government-sponsored scheme that is divided into three loan categories: Shishu, Kishor, and Tarun.

CGTMSE Scheme: Another government initiative is the Credit Guarantee Funds Trust for Micro and Small Enterprises (CGTMSE), which provides financing to MSMEs through financial institutions such as banks and NBFCs. This initiative primarily benefits first-time entrepreneurs and small businesses. The CGTMSE scheme provides a no-collateral loan.

Line of Credit: A credit card is equivalent to a start-up business loan in the form of a line of credit. The card, however, is linked to the individual's business rather than their credit. Customers who take out this type of loan will not be required to pay interest on the borrowed amount for the first nine to fifteen months, making it easier to cover expenses and getting their company off to a good start. After the time, the interest rate will range between 7.9% and 19.9%, but the consumer will only have to pay interest on the amount they use (similar to a credit card).

Equipment financing: The equipment purchased while beginning a company is held as collateral with the bank as part of equipment financing. This allows the lender to charge a low-interest rate in exchange for a slightly higher risk. The borrower is supposed to repay the loan sum used to buy the equipment with profits from their company. The biggest advantage of equipment financing loans is that the customer can use the depreciation of the equipment as a tax gain for several years.

Growth Capital and Equity Assistance Scheme by SIDBI: Banks can also provide this one-of-a-kind loan to entrepreneurs. Many banks and financial institutions have loan programs tailored especially for start-ups and their unique requirements. These Start-up Business Loans can have different names depending on the bank.



  • The start-up business should have a detailed and convincing business plan.
  • It must be formed as a private limited company or a limited liability partnership.
  • The total turnover of the firm should not exceed Rs. 25 crores.
  • The company should have approval from the Department of Industrial Policy and Promotion (DIPP).
  • The start-up must get patron guarantee from the Indian Patent and Trademark Office.
  • The company must have a recommendation letter by an incubation


Applying for a start-up business loan is easy and straightforward. Applicants may also apply for jobs at most financial institutions and banks through the internet. Applicants may go to the lenders' official website, fill out the form, and upload the appropriate documents. There is also the option of going to the lender's nearest branch and sending the application form and documents in person. The borrowers will obtain the loan sum directly into their bank accounts after the information and verification are completed.

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