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How to Arrange Fund for the Business

Starting a business or any new adventure requires money, money is like a fuel to any kind of business. You can start small business and scale up as your products or services to become popular and reaching your new targeted audiences. No matter how little or small, you are most surely going to require money to invest in yourself first – learning new or developing existing skills needed to run your business smoothly.

Additionally, start-up cost like purchasing the software, advertising and if you are into business like physical products, you require initial investment in inventory before lines of credit become available from your supplier. The simple answer is that you need money to make money, it does not require you need to invest a big amount. You can start small business according to your financial condition and budget and scale-up by reinvesting the profit into the business to expand and grow big.

In single sentence it can be said that “money is mandatory mechanism for business”.

Here are the list of some scheme of government through this you can get a financial help:-

1. Pradhan Mantri MUDRA Yojana (PMMY):

Pradhan Mantri MUDRA Yojana is a scheme launched by the Prime Minister on 08 April, 2015 for providing loans up to INR 10 lacs to the non-corporate, non-farm small/micro enterprises. These loans are categorized as MUDRA loans under Pradhan Mantri MUDRA Yojana.

Banks like Commercial Banks, RRBs, Small Finance Banks, MFIs & NBFCs are providing these loans. The borrower can apply lending institutions which is mentioned above or can apply online through the web portal

Under Pradhan Mantri MUDRA Yojana, MUDRA has created three products.

S. No.   Products             Details
1.             Shishu  Under this type you can get loans up to INR 50 Thousands. This stage would help to those entrepreneurs who are either in their primitive stage or need lesser amounts in order to get their businesses started.
2.             KishoreUnder this type you can get loans up to INR 5 Lacs. This section of entrepreneurs would belong to the category where they have already started their business and want extra fund to mobilize or expand their business.    
3.             Tarun   Under this type loans up to INR 10 Lacs. If an entrepreneur fills the required conditions then he/she can apply for loan up to INR 10 lacs. This 10 lacs amount for loan would be the highest level of amount that an entrepreneur could apply for a start-up loan.

The business who can apply for this loan should be either one of the following:

  • Small manufacturing enterprise
  • Shopkeepers
  • Artisans
  • Activities allied to agriculture

2. Stand-Up India:

Stand-Up India (SUI) scheme is launched for financing Scheduled Caste (SC) or Scheduled Tribe (ST) or Women Entrepreneurs by central government on 05 April, 2016.

The purpose of the Stand-Up India scheme is to provide bank loans between INR 10 lacs & INR 1 Crore to at least one woman borrower / one Scheduled Caste (SC) or/ Scheduled Tribe (ST) borrower per bank branch to set up enterprise.

This enterprise may be in manufacturing sector, service sector or the trading sector. At least 51% shares should be held by either an SC/ST or woman entrepreneur in case of non-individual enterprises then.

Borrower should not be defaulty to any Financial Institution or banks.

The borrower can apply any of the lending institutions mentioned above or can apply online through web portal

3. PM SVANidhi:

Street vendors represent an essential part of the urban informal economy and play a major role in ensuring availability of the goods and services at economical rates at the door-step of the city dwellers.

They are known as vendors, hawkers, rehriwala, the liphadwala etc. in different areas/ contexts. The goods supplied by them include vegetables, fruits, ready-to-eat street food, tea, breads, eggs, textile, apparel, footwear, artisan products, books/ stationary etc. The services providers include barber shops, cobblers, laundry services etc.

The COVID-19 pandemic and long term lockdowns have contrarily impacted the street vendors’s life and their source of income. They generally work with a small capital base and might have consumed the same during the pandemic and long term lockdown. Thus, there is a need to time to provide credit for working capital to street vendors to re-establish their business.

It facilitates working capital loans up to INR 10,000/-.

For the above loans the first foremost need is that all the documents belongs to business should be complete in all aspects. The Loan Tenure can be up to seven years.