1 · Government schemes
Check this first, always. Subsidy and guarantee programmes carry benefits no commercial loan can match — and eligibility is narrower than the benefit is large.
Business Funding
The right funding route is rarely the one you came in asking for
Most business owners arrive asking for “a business loan”. About half of them actually need a working capital limit, a subsidy scheme or project finance — each with materially better terms. This page is how to tell which.
4 routesto choose between
Up to 35%subsidy, if eligible
₹5 crorecollateral free, via CGTMSE
₹2500 Cr+
Credit facilitated to date
All 12
Public sector banks
97%
Sanction success rate
DPR & CMA
Prepared in-house
Choose A Route
Four ways a business gets funded
They are not interchangeable. Picking the wrong one usually means a higher rate, a collateral demand you did not need, or a subsidy left on the table.
2 · Working capital
For the gap between paying suppliers and being paid. A limit, not a loan — you pay interest only on what you draw, and it renews annually.
3 · Term finance
For buying something specific that lasts — plant, equipment, premises. Repaid in EMIs over years, usually secured by the asset itself.
4 · Project finance
For a new unit or a major expansion. Structured around the project’s own cash flow, with a moratorium through construction.
Start with your stage, not your amount
The single most useful question is not “how much do I need” but “where is the business right now”. Lenders assess a five-year-old unit and a pre-revenue idea through completely different lenses, and applying through the wrong one is the most common reason a viable business gets declined.
| Your stage | What lenders assess | Usual route |
|---|---|---|
| Idea or pre-revenue | Promoter profile and project report — there is no trading history to read | PMEGP or Stand-Up India |
| Micro unit, trading under 1 year | Activity type, promoter credit conduct | Mudra — Shishu or Kishore |
| Established 2–3 years, no collateral | ITR, GST filings, banking conduct | CGTMSE-backed facility |
| Established, cash-flow squeezed | Turnover vs credits, debtor cycle | Cash credit or overdraft |
| Established, buying an asset | Asset value, incremental output, repayment capacity | Machinery loan |
| Established, building something new | DPR, equity contribution, approvals | Project finance |
Swipe the table sideways to see all columns.
What security you have changes everything
Security is the second fork in the road. It does not only affect whether you are approved — it sets the rate, the tenure and the amount.
- You own property — a loan against property will almost always be your cheapest route, at tenures up to 20 years. The trade-off is real: the property is genuinely at risk if the business fails.
- You own nothing to pledge — CGTMSE exists precisely for this. Guarantee cover of 75–85% replaces collateral on facilities up to ₹5 crore. Ask your banker to apply for it; many branches never raise it unprompted.
- You are buying the asset — the asset itself becomes the security, which is why machinery finance reaches 90–100% of cost.
- You have confirmed orders or invoices — bill discounting and receivable financing turn paper you already hold into cash, without new collateral.
Four expensive mistakes
- Taking a commercial loan without checking scheme eligibility. A 25% margin money subsidy is worth vastly more than two percentage points off a rate, and it is not available retrospectively.
- Using a term loan for working capital. Fixed EMIs against a fluctuating cash cycle creates a squeeze that a limit would not.
- Comparing a monthly rate to an annual one. “1% per month” is roughly 12.7% a year; 2% per month is over 26%. Several NBFC quotes are presented monthly for precisely this reason.
- Applying everywhere at once. Each enquiry marks your credit report, and a cluster of them reads as distress to the next lender who looks.
Where we come in. We work the route selection before anything is submitted — scheme eligibility, security position and lender fit. Then we prepare the file: CMA data, projections and DPR where the case needs them.
How a funding case runs with us
Route selection
Stage, amount, security and scheme eligibility, in that order. This conversation costs nothing and frequently changes what the business ends up applying for.
File preparation
Financials, CMA data, projections and — for project cases — a full DPR, prepared to the standard a credit committee actually applies.
Lender matching and submission
Placed with banks whose credit policy fits your sector and structure, with the obvious objections already answered inside the file.
Sanction, disbursement and renewal
Followed through appraisal to disbursement — then annual limit renewals and expansion funding as the business grows.
Check the schemes before you take the loan
A subsidy or a guarantee cover is worth more than a percentage point off the rate — and neither can be claimed after the fact. One call establishes what you qualify for.