Launched on April 5, 2016, the Stand Up India Scheme is a government initiative by the Ministry of Finance. The scheme was started to encourage women and SC and ST entrepreneurs and boost entrepreneurship at ground levels. This was done by facilitating business loans.
The scheme guarantees bank loans ranging between ₹10 lakh to ₹1 crore are given to at least 1 woman and an SC/ST entrepreneur at every bank branch to establish a greenfield enterprise. This greenfield enterprise could be any establishment, including the manufacturing or service sector[1] .
Based on the recent data, more than ₹40,710 crores have been transferred to around 1,80, 630 accounts under the Stand Up India Scheme in the last 7 years[2] . Read on to learn more about the eligibility, loan details, applicability, and more for the Stand Up India Scheme.
Who Is Eligible for the Stand Up India Scheme?
Here is the list showing eligibility[3] for the Stand Up India Scheme:
- Must be SC, ST, or women entrepreneurs aged above 18 years.
- Business loans are offered only for greenfield enterprises. Here, greenfield refers to the beneficiary’s first venture. It should be in the field of manufacturing, trading, services, or agri-allied sectors.
- For non-individual enterprises, a woman or an SC/ST shall be the shareholder of about 51% of the stakes.
- The borrower should not be a bank or loan defaulter.
Details of the Loan Under the Stand-Up India Scheme
The loans under the Stand Up India Scheme have a distinct purpose, nature, and objective. Here are all the essential loan details related to this government scheme.
- Loan’s Nature:
The loans offered under the scheme are composite (including the term loan and working capital). The amount ranges between ₹ 10 lakh to ₹1 crore.
- Loan’s Purpose:
These loans are offered to SC/ST or women entrepreneurs to establish a new enterprise in the manufacturing, trading, or service sector.
- Loan’s Size:
The size of the loan is fixed at 75% of the total project cost. This includes term loans and working capital management. However, this 75% coverage for the total project cost would not be applicable if the borrower’s contribution, along with the convergence support from any other scheme, goes above 15%.
- Interest Rate on the Loan:
The interest rate is fixed at the lowest applicable bank rate for that rating category. This should not go above (base rate (MCLR) + 3%+ tenor premium).
- Repayment Terms:
The borrower needs to repay the loan in 7 years. Also, the moratorium period provided here is 18 months.
- Security of the Loan:
The offered loan enjoys primary security. Additionally, it is also secured by the CGFSIL or collateral security or guarantee of Credit Guarantee Fund Scheme for Stand-Up India Loans as per the bank’s decision.
- Margin Money:
Stand Up India Scheme covers 15% of margin Money that can be offered in addition to any Central or State Schemes.
These additional schemes can be used to cover extra expenses like subsidies and more. However, in any case, the borrower must make a minimum of 10% contribution to the total project costs from their side.
- Working Capital:
The working capital of up to ₹10 lakh can be drawn using an overdraft or a Rupay Debit card for maximum convenience. For an amount exceeding ₹10 lakh, it can be drawn via Cash Credit Limit.
Prerequisites for Stand Up India Application
Before filing your Stand Up India application, make sure you have the following documents in handy. This ensures you fill your form quickly without any hassle.
- Identity proof, including documents like Aadhar Card, PAN card, Voter ID, or more.
- Residence proof
- Business address proof
- Latest income tax returns along with the statement of assets and liabilities.
- MSME registration or MSME certificate if applicable.
- Projected balance sheet for the coming two years.
- Documents to prove your SC/ST criteria
It is important to note that other documents can also be asked while filling out the form based on local requirements.
Where to Apply for Stand Up India Scheme Loans?
Anyone eligible can apply for the Stand Up Scheme Loans using three ways.
- By visiting the bank branch
- Via the lead district manager
- Using the Stand Up India Portal
How do I Submit My Stand Up India loan Applications?
Here is a detailed guide on how to submit your loan application.
- The first step is the collection of borrower details. Based on the same, you are provided feedback.
- Your hand-holding criteria by Stand Up India Scheme is decided based on certain questions around the borrower’s location, category, business nature, aid needed, and so on.
- For ready borrowers who need no hand-holding assistance, the loan application can be done via the Stand Up India portal.
- For trainee borrowers, where some hand-holding assistance is required, individuals are registered as trainee borrowers, and required support is arranged by Stand Up India support centres. This support can be offered for several purposes, like skilling, margin money, mentoring help, and so on.
Wrapping Up
The Stand Up India Scheme aims to create a level playing field for all kinds of entrepreneurs. Thus, it helps target sections by providing them with adequate loan support to give them proper access to capital and the opportunities that come with it. However, before you subscribe to its application, always educate yourself on the eligibility criteria and the documents needed like identity and resident proof, tax returns, etc. You can calculate your tax returns using a GST calculator.
Further, to ensure you repay the loans timely and precisely, consider using a business EMI calculator that helps you calculate the payable amount at the month’s end. Using these tools can also help you understand what loan best suits your business requirements and your financial plan.
References:
- https://www.standupmitra.in/Home/SUISchemes
- https://pib.gov.in/PressReleaseIframePage.aspx?PRID=1913705
- https://www.standupmitra.in/Home/SUISchemes
Source: https://www.standupmitra.in/Home/SUISchemes
