Now we know that we can take business loan through many sources like government schemes, bank loans and special schemes for women entrepreneurs. Let us now know what is the eligibility criteria for taking loans under these schemes.

Government schemes under loan eligibility

Eligibility for Credit Guarantee Scheme

This scheme is applicable to MSMEs of both types, new and existing, that deal in manufacturing or services activities.

Eligibility for Mudra Loan Scheme

The non-corporate small business sector (NCSB) including sole proprietorships/partnerships in rural and urban areas is entitled to apply for loans. Some examples of NCSB are like

Small manufacturing units

Service Sector Units

Shopkeeper

Fruit/vegetable seller

Truck operator

Foodservice units

Repair shops

Machine operator

Small industry

Artisans

Food processor etc.

All types of manufacturing, trading and service sector units can get loans under this sector.

Key Eligibility of Stand-up India Scheme

Enterprises that are engaged in manufacturing, trading services have the power to take loans under the ISSU scheme. For non-individual companies, at least 51% of the equity and majority of the equity must be in the hands of SC/ST or entrepreneurs. The borrower should not default on any payment with any bank or financial institution.

Coir Udyami Yojana Scheme Eligibility

All MSME coconut fiber start-up companies registered with the Coconut Shell Commission under the Coconut Shell Industry (Registration) Regulations 2008 are eligible to obtain loans under the scheme. The eligibility criteria is-

1. All individuals, companies, self-help groups, NGOs, institutions registered under the ISS scheme shall be under the Provide Assistance for Societies Registration Act, 1860. Business loans are also provided to production cooperative societies, joint liability groups, and charitable trusts.

2. Startups which already have government subsidy or have availed ISS facility under which government scheme are not eligible to take a business loan under this scheme.

2. Bank Business Loan Eligibility

First of all, let us know which parties are eligible for taking a business loan from the bank–

a) Self-employed businessmen and professionals

b) Limited or Private Limited Firm

c) Manufacture, retailer or service provider

Now let’s know what is the eligibility criteria for taking a business loan from the bank-

    Applicant must be an age 21–65 Years old.

    The business should be in existence for at least 3 years.

    The company is said to be profitable in the past two years

    The turnover of the business should be 40-50 lakhs per year.

    Minimum profit should be up to 1-2 lakhs.

3. Eligibility for Women Entrepreneur Scheme

St. Kalyani Scheme

The woman above 18 years

Tree power package plan

Eligibility: Women entrepreneur should have 51% or more ownership in the business venture.

Dena power plan

Eligibility: The woman entrepreneur should have 50% or more ownership in the business venture.

Udyogini Yojana

Eligibility: The age of the woman entrepreneur should be between 18-55 and the maximum income limit is 1.5 lakhs.

Key Documents of Business Loan

We need many documents to take a business loan, but which document you need, depends on where you are taking the loan.

If you are taking government schemes through a business loan then you will need niche documents for every scheme but we will tell you some documents which are common to all schemes like-

GST identification number

Income tax details which have been paid in the last 3-5 years.

Last 6 months of bank statement

Proper information about the type of loan you want to take.

List of Directors or Partners of the Company/Partnership Firm

E-KYC – All the documents that the applicant will need at the time of e-KYC such as Personal ID, Address Proof, Premises Proof, Aadhar Number, etc.

2. If you take a business loan from the bank, then you will need some documents like-

Income tax return for the past 3-years (ITR).

bank statement

trade proof

certificate of practice

Recent/latest photograph of the applicant

Identity Proof like Aadhar Card, Voter ID Card, PAN Card, Company Registration Certificate, etc.

Residence proof

Other documents like Sole Proprietary Declaration, Certified copy of Partnership Deed, Certified copy of Memorandum of Association and Articles of Association, etc.

3. If you are a woman entrepreneur and you are women

If you want to take loan through government schemes made for entrepreneurs, then you will need some documents like-

Aadhar ID card, driving license, voter card, passport,

Address Proof- Ration Card, Aadhar Card, and Passport

Residence Proof- Utility Bill, Landline Bill, Water Bill

Confirmation of bank statements for the past two years

Financial Documents- Income Tax Return (Last 2 Years), Profit and Loss Statement for last 2 Years ca. Audited balance sheet.

Business Ownership- Partnership Deed for Partnership Business, Sole Proprietor Deed if you are Sole Proprietor, a certified copy of Articles of Association, Memorandum of Association

How to Apply for Business Loan

If you are applying for a business loan from the bank, then you can apply for this loan through both online and offline modes-

Online process

If your financial lender ie bank offers online facility, then the first step would be to visit their website.

In their website, by going to the loan section, select the business loan or small business loan option.

Download the application form and fill all the important details in it.

After that submit the application form.

When the customer service team of the bank informs you, submit your form for verification.

If you match the loan eligibility criteria, your loan will be approved and your loan amount will be disbursed to you within a few days.

Read More: 10 Examples Of Complete Information About Loan For Business