Standup India Scheme was launched by Prime Minister Narendra Modi to facilitate the commercial banks to provide loans between INR 10 lakh and 1 crore to at least one Scheduled Caste or Scheduled Tribe borrower and at least one woman borrower from every bank branch.
Details of Loan
A composite loan which is inclusive of a term loan and working capital loan will be provided to the beneficiary. The loan amount varies from INR 10 lakh to INR 1 crore depending on a lot of factor including your project planning, locality and others.
The composite loan amount will be 75% of the project cost including the term loan and working capital loan. However, the stipulation of the loan being expected to cover 75% of the project cost would not apply if the borrower’s contribution along with support from any other schemes exceeds the 25% of the project cost.
The rate of interest for the sanctioned loan is generally the lowest applicable rate of the bank for that category and not exceeds the base rate (MCLR) + 3% + tenor. A security is needed for the loan and besides the primary security, the loan may be secured by collateral or guarantee of Credit Guarantee Fund Scheme for Standup India Loans (CGFSIL). However, it is up to the sole discretion of banks.
The loan is repayable in 7 years with a maximum moratorium period of 18 months.For drawal of Working capital upto 10 lakh, the same may be sanctioned by way of overdraft. Rupay debit card to be issued for convenience of the borrower. Working capital limit above 10 lakh to be sanctioned by way of Cash Credit limit.
Eligibility for Standup India Scheme
The borrower should be a woman or a person belonging to Scheduled Tribe or Scheduled Caste. In case of SC/ST, a caste certificate shall be required. For non-individual enterprises in manufacturing, services or the trading sector at least 51% of the shareholding and controlling stake should be in hands of either an SC/ST or woman entrepreneur.
Furthermore, the individual must be 18 years old and the project should be a greenfield venture. Greenfield ventures mean the first-time venture of the beneficiary in manufacturing, service or trade sector. Moreover, the borrower should have a positive CIBIL feedback and should not be a defaulter with any bank or financial institution.
The Scheme envisages 25% margin money which can be provided in convergence with eligible Central / State schemes. While such schemes can be drawn upon for availing admissible subsidies or for meeting margin money requirements, in all cases, the borrower shall be required to bring in minimum of 10% of the project cost as own contribution.
What Can You Avail the Loan for?
Loans under Standup India Scheme can be availed for a variety of purposes. The sole condition is that the purpose should be related to a green field venture i.e venturing for the very first time in life. Standup India Scheme cannot help you to avail a loan for your second or subsequent venture. However, there are several commercial providers which provide collateral free as well as secured loan digitally.
Commercial Vehicle Loan
You can avail a loan to purchase vehicles to start your transporting business. Moreover, you can also avail this loan to start a logistics businesses. Logistics industry in India is growing at a fast pace and several startups are raising funds for their logistics startups. If it looks hard, you can simply buy a vehicle to contract it out with other businesses (transportation of newspapers, milk etc). Transporting business include movement of goods and services and movement of passengers. Whatever may be your idea, banks can help you with a loan.
Construction Equipment Loan
If you are into construction or real estate and want to establish a real estate development firm, Standup India Scheme can help you in a lot of ways. Banks provide loans to purchase equipment like Bulldozer, Fork Lift, Concrete Pump, Breaker, Jackhammer, Drifter etc to help you start your construction business. You can avoid starting your own construction business and instead, rent the equipment to other businesses too.
Car Loan or Passenger Vehicle Loan
You can avail a loan under the Standup India scheme to buy passenger vehicles like a taxi or car to set up your rental business. You can also buy a car to contract it out to ride-hailing services like Ola and Uber. Or you can start your white label taxi renting services which provide intra-city as well as inter-city taxi services.
Business Installment Loan (BIL)
Business Installment Loan is a term loan which can be used to buy machinery, furniture or renovating office design, setting up manufacturing and more. It can be used flexibly to do almost anything to support your business. These types of loans are collateral free or unsecured and can be availed by doctors, professionals or CAs to start up their business. It can be used as working capital or for business expansion.
Loan Against Property
A loan against property is a secured loan which is granted in lieu of securities like land, building, office or house. It is very similar to a Business Installment Loan and can be used to redesign offices, buy furniture, buy small equipment, set up manufacturing, set up plant and more. It can be used as a working capital too and has the flexibility to help you with almost anything you need for your business.
Medical Equipment Loan
If you are a doctor (not necessarily) and planning to set up a hospital or an advanced clinic to treat patients in your area, a Medical Equipment Loan can help you with all your needs. The loan amount is between INR 10 lakh to INR 25 lakhs and is collateral free. Medical equipment is costly and can hit your pocket hard. With this type of loan, any individual can dream to start a medical centre.
If you are confused on what business to start, we have compiled a list of 22 small business ideas that require little to zero investments. You must give it a read. It’s worth your time.
Documents needed to avail a loan under Standup India Scheme includes KYC (Aadhar card & Pan card), address proof (Electricity bill, telephone bill, gas connection, passport or driving licence), caste certificated (if SC/ST), details of business planned including nature of business, location of business, requirement of skills and training, details of present bank accout and amount of own investment in the project.
In case of non-individual loans, documents including company PAN, certificate of incorporation, shareholder certificate, MoA, AoA and more may be required in addition to the personal documents mentioned in the above paragraph. You can contact your bank for exact details of documentation required as every financial institution have their own sets of criteria and requirements.
Steps to Avail
To apply for a loan under Standup India Scheme, you can visit your nearest bank branch. If you are comfortable with the digital world, you can apply for a loan through Standup Mitra, SIDBI’s Standup India portal. Moreover, there are LDMs who can help you with all your needs.
via Standup Mitra
You can simply visit www.standupmita.in and use the standard registration form to register and upload relevant documents. The portal will automatically connect you to a lender (bank) and all your information will be forwarded.
via LDM (Lead District Manager)
You can email or telephone the Led Manager or Lead Officer of your district. Lead District Managers are technically bank employees who can help you with all your needs. You can visit this link to find your LDM.
via Bank Branches
You can visit any bank near to you and ask for details of the loan under Standup India scheme. Some good banks that have easy process flow are Bank of India, State Bank of India, ICICI Bank, HDFC Bank, Yes Bank, Allahabad Bank and Indian Overseas Bank.