Government Business Loan Schemes in India for 2025
For a business, finance is actually considered as a backbone since it helps to meet most important expenses such as establishment cost, raw materials purchase, and equipment purchase, while scaling operations in between. Most times medium and small-scale enterprises can get by with the business loans they acquire to keep things running smoothly. If you are a business owner seeking to raise finance, government business loan schemes would probably be a good choice.
The Government of India, in association with numerous Banks as well as Non-Banking Financial Companies (NBFCs), have started many business loan schemes in support of startups, self-employed professionals, MSMEs, and individuals engaged in trading, manufacturing, or service activity in the Indian economy. Such schemes have been formulated to provide flexible loans that can technically be suited to almost any type of business.
So, let us move ahead with what is the top 5 business loan schemes provided by the government.
1. Pradhan Mantri MUDRA Yojana (PMMY)
The Pradhan Mantri MUDRA Yojana is great for small enterprises involved in trading, services, and manufacturing, and especially for women entrepreneurs. MUDRA is the Micro Units Development and Refinance Agency Ltd, which acts as the refinancing support system of banks and NBFCs for lending to small businesses.
Key Features:
- Collateral-Free Loans: No need to pledge assets.
- Flexible Repayment Tenure: Allows borrowers to extend repayment as needed.
- Loan Categories:
| Loan Type | Principal Amount Offered | Interest Rate (p.a.) |
|---|---|---|
| Shishu | Up to ₹50,000 | 1% – 2% |
| Kishor | ₹50,001 to ₹5,00,000 | 8.60% – 11.15% |
| Tarun | ₹5,00,001 to ₹10,00,000 | 11.15% – 20% |
This scheme is particularly suited for startups and small businesses requiring modest funding.
2. PSB Loans in 59 Minutes
It was introduced with an objective to cater MSMEs needs for working capital really well-the initiative of PSB Loans in 59 Minutes. The application is not a lengthy process, approval or disapproval comes in 59 minutes.
Key Features:
- Loan Amount: ₹10 Lakhs to ₹5 Crores.
- Interest Rate: Starting at 8.5% p.a.
- Women Entrepreneurs: Enjoy a 3% reservation.
- Processing Time: Loan disbursal typically takes 8 to 12 days.
This scheme is ideal for businesses looking for quick financial assistance without lengthy processing times.
3. National Small Industries Corporation (NSIC) Subsidy
The NSIC subsidy scheme is actually that which will help any small scale industries for their finance, technology and marketing needs. It actually comes very useful when it is aimed towards such enterprises that require help in expanding reach to the market or in furthering operational efficiency.
Marketing Support: Encases businesses through consortia schemes and tender marketing.
Credit Support: Offers finances to help in raw materials, marketing, and so forth.
Other Benefits:
- Tender Free of Cost: Businesses do not have to pay a fee for access to tenders.
- No Security Deposit: No deposit needed when taking finances
- Land & Building Finance: Project up to ₹25 Lakhs can be funded with finance.
Participating Banks: Includes HDFC Bank, ICICI Bank, Axis Bank, SBI, Bank of Baroda, and many more.
4. Credit-Linked Capital Subsidy Scheme (CLCSS)
The CLCSS is for businesses that want to invest in technological upgradation for manufacturing, supply chain, and marketing. This scheme offers a 15% upfront capital subsidy to the eligible business.
Key Features:
- This scheme is applicable to sole proprietorships, partnerships, private/public limited companies, and cooperative societies.
- This scheme focuses on industries that require modernization and technology upgradation.
This scheme is suitable for enterprises that want to remain competitive in their respective markets.
5. Small Industries Development Bank of India (SIDBI) Loan
For several years now, SIDBI is a trusted source for MSMEs for its direct and indirect sources of funding. It’s especially helpful when financing small businesses in urgent need of funds.
Key Features:
- Loan Amount: ₹10 Lakhs to ₹25 Crores.
- Repayment Tenure: Up to 10 years.
- Collateral-Free Loans: Up to ₹1 Crore without requiring security.
Popular Schemes Under SIDBI:
- ARISE (Assistance to Re-Energize Capital Investments by SMEs)
- SANGAM (SIDBI-Google Partnership for Micro Enterprises)
- UBHARTE SITAARE Programme
- STAR (Rooftop Solar Photovoltaic Loan)
- SPEED/SPEED PLUS (Loan for Equipment Purchases)
- TULIP (Top-Up Loan for Immediate Purposes)
- General Purpose Term Loans
SIDBI caters to a variety of needs, from capital investment to working capital and equipment financing.
Disclaimer: The information provided in this article is for general informational purposes only and does not constitute financial advice. Readers are advised to consult with financial experts or relevant authorities before applying for any loan scheme.
Braj Verma is a resident of Rajgarh in Madhya Pradesh and is a content writer and freelancer by profession. He has a degree in Political Science from Barkatullah University, Bhopal. He has expertise in subjects like credit cards, banking, loan, insurance, political analysis and digital marketing.