Starting and growing a business in India requires not just vision and dedication but also equal financial support. While many entrepreneurs are familiar with schemes like the Pradhan Mantri Mudra Yojana (PMMY), several other government initiatives offer financial benefits to businesses. 

Let's explore some lesser-known yet impactful government business loan schemes that can help push your enterprise forward.

1. Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE)

The Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) offers loans up to ₹2 crore without asking for security. It’s ideal for first-time entrepreneurs who don't have property or assets to mortgage (an agreement between you and a lender that gives the lender the right to take your property if you don't repay the money you've borrowed plus interest). The scheme aims to strengthen the credit delivery system and help the flow of credit to the Micro and Small Enterprises (MSE) sector.

2. Stand-Up India 

This scheme is for the minority; especially SC/ST and women entrepreneurs. Loans from ₹10 lakh to ₹1 crore are given for starting a new business (called a Greenfield enterprise). Every bank branch is expected to offer at least two loans under this government business loan scheme.

Quick tip: Agar aap ek woman entrepreneur ho, toh sirf business loan hi nahi, government ke paas aur bhi schemes hain especially for you. Do check out this Top 10 Government Schemes for Women.

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

You don’t need a fancy MBA or investor pitch deck.

The Prime Minister’s Employment Generation Programme (PMEGP) helps anyone above 18 years start micro-enterprises. Loan limits go up to ₹25 lakh for manufacturing and ₹10 lakh for services. Subsidies range from 15% to 35%, depending on your category and location. This government business loan scheme is perfect for rural entrepreneurs and first-timers.

Quick Tip: Business loan applications often require you to submit your Aadhaar Card as part of the documentation. Agar aapko apna Aadhaar card download karna seekhna hai, visit uidai gov in aadhaar card download for an easy step-by-step guide.

4. Credit Linked Capital Subsidy Scheme (CLCSS)

The CLCSS aims to help technology promotion in micro and small enterprises by providing an upfront capital subsidy of 15% (up to ₹15 lakh) for the purchase of plant and machinery. This scheme is particularly beneficial for businesses looking to modernize their operations and improve productivity.

5.  SIDBI Make in India Soft Loan Fund for Micro Small and Medium Enterprises (SMILE)

The SMILE scheme by the Small Industries Development Bank of India (SIDBI) offers soft loans to MSMEs to meet debt-equity requirements for the formation of new enterprises or for the growth of existing ones. This scheme offers venture debt, a special type of loan that’s like a mix of regular loan and business ownership. 

Saath hi, you can also get normal business loans. The best part? Repayment terms kaafi easy hote hain: you don’t have to worry about strict deadlines or pressure.

6. Sustainable Finance Scheme

This scheme is designed to provide financial help to industries that are involved in energy efficiency, cleaner production, and sustainable development projects. It supports actions that have a positive impact on the environment, encouraging businesses to adopt sustainable practices. 

Sustainability aur government ke naye schemes mein interest hai? Check out this quick Seekho video on PM Surya Ghar Bijli Yojana, 300 units tak free electricity mil sakti hai, under this green initiative.

7. Technology Upgradation Fund Scheme (TUFS) for the Textile Industry

Specifically adjusted for the textile sector, TUFS aims to help the modernization and technology upgradation of the textile industry by providing capital subsidies. This scheme helps textile businesses enhance their competitiveness in the global market.

Which Government Business Loan Scheme Should You Choose?

Still confused about which one fits you best? Read:

• Starting out with zero collateral (guarantee)? → Go for CGTMSE or PMEGP
• Women/SC/ST entrepreneurs? → Stand-Up India
• Old machinery, low output? → CLCSS
• Eco-friendly startup? → Sustainable Finance Scheme
• Looking to scale? → SMILE by SIDBI
• Textile/garment industry? → TUFS

Final Words

Guiding the view of government business loan schemes can open up numerous opportunities for your enterprise. By exploring these lesser-known options, you can find the financial support that aligns best with your business goals and contribute to India's economic growth.

Bonus Gyaan Alert! Business toh thik hai, but kya aapko pata hai personal loan ke liye bhi government schemes available hain? Thoda aur paisa manage karna ho toh yeh blog zaroor padho: Top 5 Government Personal Loan Schemes to Know in 2025.

FAQs About Government Business Loan Schemes

Q1: What is the ₹50,000 subsidy scheme in Karnataka?

It’s the Shrama Shakthi Scheme, offering ₹50,000 loans to minorities in Karnataka with a subsidy and skill training support.

Q2: How to apply for a Mudra loan?

Apply at your bank or online via the Udyamimitra portal. Submit basic documents like ID, address proof, and a business plan.

Q3: What is a zero collateral loan?

It’s a loan you can get without pledging any asset. Approval depends on your credibility and income history.

Q4: Is Mudra loan collateral-free?

Yes, Mudra loans up to ₹10 lakh are completely collateral-free under Pradhan Mantri Mudra Yojana (PMMY).