Guide For Private Institution Business Loan

Looking to avail business loan for private institution? Read this complete guide by IIFL Finance to know about the private institution business loans in detail!

4 Dec,2022 18:13 IST 15 Views
Guide For Private Institution Business Loan

Nearly every small business needs money from time to time. Money is needed to meet urgent business needs, like working capital, paying wages of existing employees, buying new equipment or machinery, renting a new premises or for incurring any other type of business expense.

A business loan is essentially an uncollateralized loan that is lent to an enterprise to allow it to meet its financial needs. In India, anyone who owns a startup or a small business, can avail a business loan from a bank or a non-banking finance company to start a business or grow one.

Interest rates charged by lenders on the business loan depend on the amount and duration of the loan. Most business loans are easy to avail with minimal documentation and a quick approval process. Moreover, a business loan can be applied for online and the entire process can be completed without having to visit the branch of the lender.

Government-Backed Business Loans

On top of traditional business loans, several government-backed schemes are also available to small businesses that are looking to grow their business. Some of these government schemes that small businesses can avail include:

Pradhan Mantri Mudra Yojana

The MUDRA (Micro Units Development and Refinance Agency) Yojana was set up in 2015 by Prime Minister Narendra Modi. The MUDRA Yojana provides credit for all types of businesses in the commercial, manufacturing and service sectors. It offers loans ranging from Rs 50,000 to Rs 1 lakh in three categories—Kishor, Tarun and Shishu. Such loans are usually for craftsmen, repairing shops, vegetable shops, machine operators and such like.

Bank Credit Facilitation Scheme

This is managed by the National Small Industries Corporation and caters to the needs of micro, small and medium-sized enterprises (MSMEs) that employ a majority of the country’s non-agricultural workforce. These loans are typically repaid over a period of five to seven years but this tenor can be extended to 11 years in case of exceptional circumstances.

Credit Guarantee Scheme

Loans under the Credit Guarantee Scheme are available to MSMEs that are in the manufacturing sector. MSMEs in areas like agriculture, retail, education and self-help groups cannot avail of these loans. The Credit Guarantee Fund Trust for Small and Medium Enterprises manages the scheme, under which one can borrow up to Rs 2 crore.

Standup India

Started in 2018, the Standup India initiative is led by the Small Industries Development Bank of India (SIDBI) and funds businesses in areas like manufacturing, trading and the services sector. The Standup India scheme gives out loans ranging from Rs 10 Lakh to Rs 1 crore. Loans obtained through this scheme must be returned within seven years, with a maximum cessation period of 18 months.

Sustainable Finance Scheme

Apart from Standup India, SIDBI also oversees the Sustainable Finance Scheme, which lends to businesses that deal with domains such as clean energy, green energy, renewables, non-renewable energy as well as technical hardware.

This is a government-backed online platform that allows one to take out a business loan quickly, for starting a business. From this portal, loan of up to Rs 10 lakh for the MUDRA scheme and up to Rs 5 crore for the MSME loan programme is available based on qualifying and other criteria. A personal loan of up to Rs 20 lakh, a mortgage of up to Rs 10 crore, and a car loan of up to Rs 1 crore are also available.


If you have a small business or wish to start one, there are plenty of options available to when it comes to availing a business loan.

If you are looking for a traditional business loan, you should make sure that you approach a reputable lender like IIFL Finance. Not only do lenders like IIFL Finance offer some of the best interest rates in the market but also provide value-added services. Moreover, the business loan can be applied for online and the entire process from application to disbursement and then to repayment can be done in a hassle-free manner.

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