Visit a Bank / Financial institution to enquire About

various fundings schemes for small scale enterprises

To visit a bank or financial institution to inquire about funding schemes for small-scale enterprises, here's the step
to follow -

Before the Visit:

1. Identify Potential Banks/Financial Institutions:

o Commercial Banks (e.g., HDFC , ICICI , SBI , Bank of baroda, kotak mahindra etc.)

o Development Banks (e.g., Small Industries Development Bank of India - SIDBI, etc.)

o Microfinance Institutions (for very small enterprises)

o Government Schemes (depending on your businesss, there may be special government funding
options for small businesses)

2. Prepare Your Business Information:

o Business Plan: A detailed plan outlining your business goals, target market, competition analysis,
financial projections, and growth strategy.

o Financial Statements: If your business is already running, bring profit and loss statements,
balance sheets, and cash flow statements.

o Proof of Business Registration: Business license, tax ID number, or any other registration
documents.

o Credit Score: If applicable, the bank may review your credit history.

o Personal Identification: Government-issued ID for both yourself and any partners involved in the
business.

3. Know Your Needs: Understand what type of funding you are seeking:

o Working Capital (short-term operational expenses)

o Equipment Financing

o Expansion Capital

o Invoice Financing (if you're waiting for payments from clients)

o Microloans (for very small businesses or startups)

1. Greeting & Introduction:

o When you enter, approach the customer service desk and ask to speak with someone in the
business banking or SME (Small and Medium Enterprises) lending department.

2. Key Questions to Ask:

o What types of funding programs do you offer for small businesses?

o What is the eligibility criteria for each funding program?

o What are the loan terms (interest rates, repayment periods, etc.)?

o Is collateral required? If yes, what types of assets are acceptable?

o Do you offer government-backed loans or schemes for small businesses?

o How long does the loan application process take, and what documents do I need to submit?

o What is the approval rate for small business loans at this institution?

o Do you have any advice or tips on improving my chances of securing funding?

3. Request Specific Details:

o Loan Brochures or Information Sheets: Ask for any printed material that outlines the available
funding schemes, including eligibility, terms, and application procedures.

o Repayment Terms: Ensure you understand the repayment structure, including whether the loan is
flexible (e.g., grace periods, early repayment without penalties).

4. Clarify Fees and Additional Costs:

o Ask about hidden fees, such as application fees, processing fees, prepayment penalties, or fees for
early loan payoff.

5. Inquire About Government or Subsidized Loans:

o Some banks may partner with the government to offer lower-interest loans or grants for small
businesses. It’s important to ask about these to see if you qualify.

After the Visit:

1. Review the Information:

o Go through the materials you received and review the loan options carefully.

o Compare the interest rates, repayment terms, and other factors that will impact your decision.

2. Prepare Your Application:

3. Follow Up:

o If the process requires waiting or additional steps, make sure you follow up periodically to track
the status of your application.

4. Evaluate Other Banks or Institutions:

o If you are unsure about the best funding option, you may want to visit a few more banks or
financial institutions to compare offers.

Below are the some schemes available for small scale business and enterprise :-

1. Prime Minister’s Employment Generation Programme (PMEGP)

Objective: The scheme aims to generate employment opportunities by setting up new micro-enterprises in the non-
farm sector.

Key Features:

 Eligibility: Indian entrepreneurs (individuals, self-help groups, institutions, and cooperative societies).

 Loan Amount: Up to ₹25 lakh for manufacturing units and ₹10 lakh for service units.

 Subsidy: 15% to 35% subsidy on the project cost, depending on the category of the entrepreneur.

 Repayment: Typically, a 3-7 year repayment period.

 Interest Rate: The interest rate is generally 8% to 12%, depending on the bank and the applicant's profile.

Who Can Benefit:

 Micro and small enterprises in manufacturing, service, and agri-processing sectors.

 Special focus on entrepreneurs from rural areas, women, and SC/ST categories.

2. Credit Guarantee Fund Scheme for Micro and Small Enterprises (CGTMSE)

Objective: The CGTMSE provides a guarantee to lending institutions, enabling them to offer collateral-free loans to
MSMEs.

Key Features:

 Eligibility: MSMEs (both existing and new) in any sector, except for agricultural, educational, and certain
other excluded activities.

 Loan Amount: Up to ₹2 crore without requiring collateral.

 Guarantee Coverage: 75% to 85% of the loan amount (depending on the type of borrower).

 Interest Rate: Determined by the bank, but typically lower due to the guarantee.
  Repayment Period: Usually 5-7 years, depending on the type of loan.

Who Can Benefit:

 Small businesses that don’t have adequate collateral to offer.

 Suitable for working capital, machinery loans, and infrastructure development.

3. MUDRA (Micro Units Development and Refinance Agency) Scheme

Objective: MUDRA aims to provide financial assistance to micro-enterprises, particularly those in the informal
sector, through a range of loans.

Key Features:

 Eligibility: Micro enterprises with investment in plant and machinery or equipment up to ₹10 lakh.

 Loan Categories:

o Shishu (up to ₹50,000) for new businesses.

o Kishore (₹50,000 to ₹5 lakh) for growing businesses.

o Tarun (₹5 lakh to ₹10 lakh) for well-established businesses.

 Interest Rate: Typically ranges from 7% to 12% depending on the bank and applicant’s profile.

 Repayment Period: Flexible repayment period depending on the business’s cash flow.

Who Can Benefit:

 Small and micro enterprises engaged in various sectors like manufacturing, services, and trade.

4. Stand Up India Scheme

Objective: To provide loans to SC/ST and women entrepreneurs to set up greenfield (new) enterprises in the
manufacturing, services, or trade sectors.

Key Features:

 Eligibility: SC/ST and women entrepreneurs.

 Loan Amount: Loans between ₹10 lakh and ₹1 crore to establish a new business.

 Interest Rate: Typically varies from 9% to 14%, depending on the bank.

 Repayment Period: Usually up to 7 years, with a maximum moratorium period of 18 months.

Who Can Benefit:

 Women and SC/ST entrepreneurs interested in establishing new businesses in manufacturing, services, or
trading sectors.

5. Technology Upgradation Fund Scheme (TUFS)

Key Features:

 Eligibility: MSMEs engaged in the textile and garment sectors.

 Loan Amount: The funding provides subsidies on the interest rates for upgrading machinery.

 Interest Rate Subsidy: 3% to 5% subsidy on the interest rate.

 Repayment Period: Usually between 5-7 years.

Who Can Benefit:

 Small-scale textile industries looking to modernize and improve productivity.

6. National Small Industries Corporation (NSIC) Scheme

Objective: NSIC offers various financing and marketing support for small enterprises, including technology and raw
material procurement.

Key Features:

 Eligibility: Micro and small enterprises across different industries.

 Loan Amount: Varies based on the project, up to ₹2 crore.

 Subsidy: Offers raw material assistance, marketing support, and technology financing.

Who Can Benefit:

 Small-scale industries looking for financial assistance for procurement of raw materials and marketing
services.

7. SIDBI (Small Industries Development Bank of India) Schemes

SIDBI provides multiple schemes aimed at supporting MSMEs in terms of working capital, term loans, and
microfinance.

Key Features:

 Eligibility: Micro, small, and medium enterprises in the manufacturing, services, and trade sectors.

 Loan Amount: Varies, depending on the project’s size and need.

 Interest Rate: Typically between 8% and 12%.

 Repayment Period: Flexible depending on the loan structure.

Who Can Benefit:

 Small businesses across various sectors, including export-oriented businesses.

Objective: A series of measures announced by the Indian government to provide financial relief to MSMEs,
including loan guarantees and equity support.

Key Features:

 Collateral-free Loans: Up to ₹3 lakh crore in emergency credit for MSMEs to mitigate the pandemic’s
impact.

 Subordinate Debt: ₹20,000 crore support for stressed MSMEs through subordinate debt.

 Equity Infusion: ₹50,000 crore equity infusion through MSME Fund of Funds.

Who Can Benefit:

 MSMEs, particularly those impacted by the COVID-19 pandemic.

9. Government Subsidy Schemes for Women Entrepreneurs

Objective: To promote women entrepreneurship and provide financial support to businesses owned by women.

Key Features:

 Eligibility: Women entrepreneurs with new or existing businesses in any sector.

 Loan Amount: Varies, up to ₹1 crore or more.

 Subsidy: Often includes lower interest rates and easy repayment terms.

Who Can Benefit:

 Women entrepreneurs, particularly those with new or small businesses.

Conclusion

India offers a variety of funding schemes designed to support small-scale enterprises, whether you're starting a new
business, expanding an existing one, or upgrading your technology. These schemes are often backed by government
initiatives, ensuring that the financial burden on MSMEs is minimized.

It’s important to carefully assess the eligibility criteria, loan amounts, and terms before applying for any of these
schemes. Most banks and financial institutions can guide you through the application process and help you find the
best funding options suited to your needs.