Starting a new business in India is an exciting journey—but getting the right funding at the right time can make all the difference. Whether you need money for equipment, office setup, or hiring, startup business loans can help bring your ideas to life.

In this blog, we’ll explore loan options available for startups in India, key eligibility criteria, and smart tips for approval.

Why Do Startups Need Loans?

Startups often require capital for:

• Product development or prototyping

• Marketing and branding

• Inventory and raw materials

• Office space or equipment

• Hiring skilled staff

While investors and venture capital can take time, loans offer a quick and direct path to business growth—especially in the early stages.

Types of Startup Business Loans in India

1. Stand-Up India Scheme

• Offered by: Government of India (via banks)

• Loan Amount: ₹10 Lakhs to ₹1 Crore

• For: Women and SC/ST entrepreneurs

• Requirement: Business must be in the manufacturing, trading, or services sector

• Features: Lower interest rates, collateral-free for eligible borrowers

2. MUDRA Loans (Under PMMY)

• Offered by: Banks, NBFCs, and microfinance institutions

• Loan Amount: Up to ₹10 Lakhs

• Categories:

  • Shishu (Up to ₹50,000)

  • Kishor (₹50,000 to ₹5 Lakhs)

  • Tarun (₹5 Lakhs to ₹10 Lakhs)

• For: Micro and small businesses

• No collateral required

3. Business Loans from Private Banks & NBFCs

• Offered by: ICICI Bank, HDFC, Axis, Bajaj Finserv, Lendingkart, Indifi, etc.

• Loan Amount: ₹50,000 to ₹50 Lakhs

• Tenure: Up to 5 years

• May require: Income proof or business vintage (6–12 months), but some offer loans based on cash flow projections

4. Credit Guarantee Fund Trust for Micro & Small Enterprises (CGTMSE)

• Offered by: Government + SIDBI

• Purpose: To provide collateral-free loans to eligible startups and MSMEs

• Available through participating banks and financial institutions

• Loan Amount: Up to ₹2 Crores

• Coverage: Credit guarantee cover of up to 85%

5. Loan Against Property or Gold for Startups

• Ideal for founders with personal assets but no business history

• Loan Amount: Based on asset value

• Lower interest rates and longer tenure

• Risk: You must pledge an asset

Eligibility Criteria for Startup Loans

While it varies by lender, general eligibility includes:

• Indian citizenship

• Age between 21–60

• A solid business plan

• Valid business registration or Udyam (MSME) certificate

• Bank statements (personal or business)

• PAN & Aadhaar of applicant/co-applicant

Documents Required

• Business plan and projections

• KYC documents

• Income proof or projected income

• GST certificate (if applicable)

• Partnership deed or registration certificate

• Bank statements for last 6–12 months

Tips to Improve Loan Approval for Startups

• Build a clear and realistic business plan

• Register your business under Udyam (MSME)

• Maintain a clean bank transaction history

• Start with a small amount if you’re new to credit

• Work on improving your personal credit score

Can Startups Get Loans Without ITR or Profit History?

Yes! Some NBFCs and fintech lenders offer low-doc or alternate-document loans based on:

• Digital sales

• Bank statement activity

• GST returns

• Business registration

Startups with little or no formal income history can still qualify!

Final Thoughts

Startup loans in India are more accessible than ever before. Whether you’re a tech founder, a home-based entrepreneur, or a rural innovator, there’s a financing option that fits your needs.

Choose wisely, borrow responsibly, and let your idea grow with confidence.