Stand
Up India is a scheme launched by the Government of India back in 5th
April 2016. Its objective is to provide loans to at least one woman and at
least one Scheduled Tribe (ST) or Scheduled Caste (SC) beneficiary per branch
of a financial institution.
Under
the project Stand Up India,
loan will be available to those setting up a Greenfield business either in the
trading, manufacturing, or services sector.
Beneficiaries
can avail loans up to 75% of their project cost under this scheme. They can
bring in the rest 25% from any other Central or State Government sponsored
schemes. However, borrowers have to contribute at least 10% of the project cost
on their own.
Features of these loans
Loan amount
Beneficiaries
can avail loans of up to Rs. 1 Crore. The loans are composite in nature and are
useful to finance a growing business.
Repayment tenor
The
maximum repayment tenure of Stand Up India loans is 7 years. Borrowers also get
a moratorium period of up to 18 months after the tenor ends.
Collateral
The
loan may or may not be secured against collateral. Lenders may ask borrowers to
pledge security as per their needs.
Loans
under this scheme are usually secured under the Credit Guarantee Fund Scheme
for Stand-Up India Loans (CGFSIL).
Interest rate
Beneficiaries
will receive the lowest possible interest rates. The rates will never be more
than MCLR + 3% + tenor premium to help businesses avoid a financial crisis.
Eligibility criteria of these
loans
I. Age
Woman
and SC/ST entrepreneurs need to be at least 18 years of age to become eligible
for these loans.
II. Company
share
Beneficiaries
have to hold at least 51% of controlling stake in case of a partnership
business to avail loans under the Stand Up India scheme.
III. Documents
Borrowers
have to provide the following documents to apply for a loan –
● Identity
proof – PAN, Voter ID, Driving License, Passport, etc.
● Residential
address proof – Any KYC document with address proof, property tax, latest
electricity bill, latest telephone bill, etc.
● Business
address proof.
● Proof of business
documents - Partnership Deed, Memorandum and Articles of Association, SSI/MSME
registration, Registrar of Companies certificate, etc.
● Rent
agreement if the business is on leased property.
● Certificate
from pollution control board (if applicable).
● Latest
income tax returns.
● Assets and
liabilities of the concerned individuals.
● Estimated
balance sheet of the forthcoming 2 years.
Lenders may also ask for additional documents if
needed.
IV. Loans more
than Rs. 25 Lakh
Borrowers availing loans more than Rs. 25 Lakh have
to provide information on the following:
● Details of
raw materials and their suppliers.
● Buyers.
● Details of
staff, labours, etc.
● List of
machinery to be purchased, their details, suppliers, etc.
● Profile of
company authorities.
● Details of
competitors.
Financial
institutions may also need other information in case the loan amount exceeds
this threshold.
Application process
Beneficiaries
can apply for a Stand Up India loan through the official website of this
scheme, any empanelled financial institution, or through the Lead District
Manager (LDM).
The
scheme classifies borrowers under the following two types:
- Trainee
borrower – Who needs assistance to avail financing, training, etc.
- Ready borrower – Who
does not need any assistance.
Entrepreneurs
can opt for start-up business loans
from NBFCs if they are not eligible for this scheme.
Make
sure to check the rate of interest and charges when opting for a business loan.
Also, calculate your EMIs to evaluate your repayment plan. Grow your business
without undermining your finances.
0 comments: