Get a Startup Business Loan In India

Elucidating the Financial Details

Interest Rates: Can ascend to a formidable 21% per annum.

Loan Quantum: Extends up to a substantial Rs. 75 lakh.

Repayment Duration: May span up to a maximum of five years.

Processing Fees: This can reach a ceiling of 6.5% of the loan amount, accompanied by applicable GST charges.

Government-Backed Initiatives for Startup Financing

In the vibrant entrepreneurial ecosystem of India, currently harboring over 39,000 startups, private equity and debt financing avenues abound. However, securing funding during the embryonic stages of a business or when it exists merely as a conceptual spark remains a formidable challenge. Furthermore, access to formal credit facilities within the Micro, Small, and Medium Enterprises (MSME) sector in India remains restricted. In response, the Government of India has unveiled a repertoire of startup business loan schemes tailored to the unique needs of MSMEs and nascent enterprises.


The Small Industries Development Bank of India (SIDBI) has pioneered a novel approach by directly extending financial support to startups and MSMEs, circumventing the traditional banking channels. These loans offer interest rates significantly lower than those proffered by mainstream banks, with a divergence of nearly 300 basis points. Prominent among the government-backed initiatives are the following schemes:

Bank Credit Facilitation Scheme

Spearheaded by the National Small Industries Corporation (NSIC), this initiative targets the credit requirements of MSME units. Collaboration with various banks facilitates loans for these units, with repayment periods spanning between 5 to 7 years, and special extensions to 11 years in exceptional cases.

Pradhan Mantri Mudra Yojana (PMMY)

Launched in 2015, PMMY, under the stewardship of the Micro Units Development and Refinance Agency (MUDRA), extends loans to diverse sectors encompassing manufacturing, trade, and services. Loans are classified into three categories - Shishu, Kishor, and Tarun, with amounts ranging from Rs. 50,000 to Rs. 10 lakh, catering to artisans, shopkeepers, machine operators, and more.

Credit Guarantee Scheme (CGS)

Accessible to both nascent and established MSMEs engaged in service or manufacturing, this scheme excludes educational institutions, agriculture, retail trade, and Self Help Groups (SHGs). Loans up to Rs. 2 crore can be procured under the aegis of the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE).

Standup India

Inaugurated in April 2016 and overseen by SIDBI, this initiative extends loans to enterprises operating in the domains of manufacturing, trade, or services. The loan range varies from Rs. 10 lakh to Rs. 1 crore, with a seven-year repayment window and a maximum moratorium period of 18 months.

Sustainable Finance Scheme

This scheme, also under the purview of SIDBI, facilitates loans for industries involved in green energy, renewable energy, technology hardware, and non-renewable energy. The scheme strives to bolster the entire value chain of cleaner production/energy efficiency and sustainable development projects.

Psbloansin59minutes.com

This digital platform empowers aspiring entrepreneurs to secure business loans for establishing enterprises. Depending on eligibility criteria and other requisites, loans of up to Rs. 10 lakh are accessible through the Mudra Loan scheme, with MSME loan options extending to Rs. 5 crore. Furthermore, individuals can apply for personal loans of up to Rs. 20 lakh, home loans of up to Rs. 10 crore, and auto loans of up to Rs. 1 crore.

Entrepreneurial Finance: A Banking Perspective

Various banking institutions offer startup business loans with unique terms and conditions. Below, we present a selection of banks and their respective lending terms:

HDFC Bank

Interest Rate: Commencing at 15.75% per annum

Loan Quantum: Extending to Rs. 40 lakh, or even Rs. 50 lakh in select regions

Processing Fee: Set at 0.99% of the loan amount

Repayment Tenures: Offering flexibility for up to 4 years

TATA Capital

Repayment Tenures: Extending up to 3 years

Loan Ranges: Spanning from Rs. 50,000 to Rs. 75 lakh

Processing Fee: Imposing a charge of 2.50% of the loan amount, in addition to GST

Kotak Mahindra

Loan Amount: Reaching up to Rs. 75 lakh


Interest Rate: Determined by factors such as loan quantum and repayment tenure

Processing Fee: Set at 2% of the loan amount, augmented by GST charges

Repayment Durations: Extending up to 5 years

Fullerton India

Loan Extents: Up to Rs. 50 lakh


Repayment Tenures: Flexible, spanning up to 5 years

Processing Fee: Varying up to 6.5% of the loan amount, accompanied by GST charges

Diversifying Funding Avenues: Two Distinct Approaches

Startup business loans manifest in two distinctive forms:

Line of Credit

Analogous to a credit card, it operates within the business domain rather than personal finances.

Notably, the initial nine to 15 months typically exempt borrowers from interest obligations, a favorable feature for covering early-stage expenses.

Equipment Financing

In this financing model, the equipment procured during the business's inception serves as collateral, facilitating lower interest rates albeit with a marginally elevated risk.

Repayment of funds expended on equipment aligns with