These days, every other young person has the same thought on their mind – starting their own business. But as soon as the idea takes shape, the biggest obstacle that stands in the way is 'money'. Many brilliant business plans remain buried in files simply because they lack the initial capital. If you are also facing this dilemma, rest assured that the MSME (Micro, Small, and Medium Enterprises) department of the Indian government has brought a ray of hope for you.

These small and medium-sized industries contribute nearly 30 percent to our country's GDP and employ more than 11 crore people. The government also understands that the country will not progress until small business owners are strong. That's why several government loan schemes have been created that not only provide you with funds but also offer substantial subsidies and unsecured loans in many cases. Let's talk about the paths that can make you a successful entrepreneur.

Big Dreams for Small Businesses

The Pradhan Mantri Mudra Yojana (PMMY), launched in 2015, has proven to be a boon for those who want to start a business on a very small scale. It provides loans up to Rs. 10 lakh, and the best part is that it is divided into three categories based on your needs:

Shishu Loan: If you are starting a completely new and small business, you can get a loan of up to Rs. 50,000.

Kishore Loan: If the business has already started and you want to expand it further, you can get funds ranging from Rs. 50,001 to Rs. 5 lakh.

Tarun Loan: For expansion on a larger scale, you can avail assistance from Rs. 5 lakh to Rs. 10 lakh.

These loans can be easily obtained from any bank, NBFC, or microfinance institution near you.

Employment Opportunities with Subsidies

The Prime Minister's Employment Generation Programme (PMEGP) is for young people who want to start their own business and also provide jobs to others. Under this scheme, loans up to Rs. 25 lakh are available for setting up manufacturing units and up to Rs. 10 lakh for the service sector. The biggest highlight of this scheme is its 'subsidy'. Depending on your category and location, the government provides a subsidy of 15 to 35 percent. This means that if you do things correctly, you won't have to repay a large portion of the loan.

The Magic of CGTMSE

Banks often ask what you have to offer as collateral before granting a loan. What about those who don't own land or gold? The Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) solves this problem.

Under this scheme, you can get a loan of up to Rs. 2 crore without any collateral. The government trust takes on the responsibility of the guarantee. For loans up to Rs. 5 lakh, the government provides a guarantee cover of up to 85 percent, making it easier for banks to lend.

CLCSS Scheme for Technological Upgradation

If your business is running but you're falling behind due to outdated machinery, the Credit Linked Capital Subsidy Scheme (CLCSS) will come in handy. The government provides a 15 percent subsidy on loans up to Rs. 1 crore for adopting new and modern technology. This increases your factory's capacity and allows you to compete in the market.

Fund of Funds

Some businesses have immense growth potential but require significant investment. For such startups, the government has created a Rs. 50,000 crore 'Fund of Funds'. Through this, investments are made in promising MSMEs through venture capital so that they can eventually be listed on the stock market and emerge as major players.

SIDBI's 'SMILE' Scheme and 59-Minute Loan

SIDBI's SMILE scheme is specifically for those who want to expand their unit. It provides soft loans of up to Rs. 10 lakh for machinery and up to Rs. 25 lakh for other purposes, with a long repayment period of 10 years.

And if you're intimidated by paperwork, the 'MSME Loan in 59 Minutes' portal is for you. Here, in-principle loan approvals for amounts ranging from ₹1 lakh to ₹5 crore are granted within just one hour. The process is very fast and transparent for businesses that file GST and income tax returns.

Disclaimer: This content has been sourced and edited from Zee Business. While we have made modifications for clarity and presentation, the original content belongs to its respective authors and website. We do not claim ownership of the content.