Startup India and Udyam registrations can make business loans easier to get

Those planning to start a new business, or to expand one that is already running, can benefit from a few government schemes at the outset. Every entrepreneur is advised to obtain two certificates before starting work and keep them on hand. With these certificates, getting a loan for the business becomes easier.

The two registrations are Startup India and MSME, also known as Udyam registration. Both can be quite useful. The biggest advantage is that they can make entrepreneurs eligible for government facilities and schemes later on. Once the initial model of the business is ready and money is needed to grow it, entrepreneurs can look at loan or fund options under various government schemes.

First, Startup India. If a business falls in the startup category, the owner can opt to have it recognised under Startup India. This brings an income tax exemption in the initial years.

The second is Udyam registration. Those who want to start a small or medium-sized business can register under Udyam. This brings a concession on electricity bills and patent fees.

These registrations can help with recognition of the business and with availing government schemes. However, eligibility and benefits may differ. Before applying, entrepreneurs should check the government rules on the eligibility of their company and business.

Then there are those whose business has already begun and who need up to Rs 10 lakh for expansion. They can apply for a business loan under the Pradhan Mantri Mudra Yojana (PMMY). Under the Mudra loan scheme, eligible small businesses are given loans for their business needs. However, there are different categories of loans, each with fixed limits.

It should be clear that this is a loan, not a grant, so it has to be repaid with interest. Applications can be made online, but whether a loan is sanctioned depends on the scrutiny and eligibility checks of the bank and the institution concerned.