Stand-Up India Scheme: Complete Loan Guide

The Stand-Up India Scheme encourages entrepreneurship among underrepresented communities in India. It enables SC/ST and women entrepreneurs to access funding that supports business creation and economic inclusion.

What is the Stand-Up India Scheme?

The Stand-Up India Scheme is a government initiative launched to provide bank loans to SC/ST and women entrepreneurs. It focuses on promoting greenfield enterprises in manufacturing services and trading sectors. The scheme offers a composite loan that combines term loan and working capital to help new business owners start and scale their ventures.

Also Read: Business Funding Tips for Women Entrepreneurs

Objectives and Purpose of the Stand-Up India Scheme

The main objective of the Stand-Up India Scheme is to promote entrepreneurship by providing financial support and business development assistance to SC/ST and women entrepreneurs. It encourages economic empowerment, job creation and equal participation in enterprise development. The scheme emphasises financial inclusion capacity building and social upliftment through business ownership.

Features of the Stand-Up India Scheme

• Composite loan ranging from 10 lakh to 1 crore: This wide range allows entrepreneurs to access sufficient funds for diverse business needs. It ensures flexibility for both small and medium-scale projects.
• Available for manufacturing services and trading sectors: The scheme covers key sectors that drive economic growth. It encourages participation from varied industries to promote balanced development.
• Subsidised interest rate based on bank’s policy: Lower interest rates reduce the financial burden on borrowers. This makes repayment easier and supports long-term sustainability of businesses.
• Moratorium period based on project requirements: Borrowers get time before starting repayments, which helps in stabilising operations. It ensures businesses can generate revenue before financial obligations begin.
• Tenure of up to 7 years: A longer repayment period provides flexibility and reduces monthly instalments. This helps entrepreneurs manage cash flow effectively.
• inimum margin money of 10 percent: Borrowers need to contribute a small portion, making the scheme accessible. It also ensures commitment from the entrepreneur towards the project.
• Credit guarantee coverage under CGFS: The scheme offers security to lenders through credit guarantee. This reduces risk and encourages banks to approve loans for new ventures.
• Support for working capital through overdraft or cash credit: Businesses can manage day-to-day expenses without financial stress. This feature ensures smooth operations and liquidity.
• Only greenfield projects eligible: The scheme focuses on new ventures rather than existing businesses. This promotes innovation and creation of fresh employment opportunities.
• Mentoring and handholding support offered: Entrepreneurs receive guidance on business planning and execution. This increases chances of success and reduces operational challenges.

Benefits of the Stand-Up India Scheme

The Stand-Up India Scheme offers multiple benefits that foster entrepreneurship and economic growth. It encourages business creation among underrepresented groups, promoting inclusivity and diversity in the business landscape. Collateral-free loans are provided through CGFS coverage, reducing financial risk for borrowers. Entrepreneurs receive handholding support for business development, ensuring guidance at every stage. The scheme contributes to job creation and overall economic growth, strengthening local economies. It also drives financial inclusion and empowerment by making credit accessible to marginalised communities. Flexible loan tenure and margin requirements make repayment manageable, while entrepreneurship development at the grassroots level ensures sustainable progress.

Eligibility Criteria for Stand-Up India Loan

• Applicant must be SC ST or a woman entrepreneur
• Must be aged 18 years or above
• The enterprise must be a greenfield project
• Loan available only for manufacturing services and trading activities
• Applicant must be the majority owner with at least 51 percent shareholding
• The applicant must not be a defaulter
• Financial viability of the project is required

Stand-Up India Loan Details

Loan Amount and Tenure

The Stand-Up India loan ranges between 10 lakh and 1 crore. The repayment tenure can extend to 7 years with a moratorium period based on business needs.

Interest Rate Details

Interest rates are determined by the lending bank based on internal guidelines and risk assessment. Rates are competitive compared to other business loans.

Security and Margin Money Requirements

Collateral may be required depending on bank policy. Margin money contribution ranges from 10 to 25 percent with credit guarantee coverage available.

How to Apply for the Stand-Up India Scheme Loan

• Register on the Stand-Up India portal
• Submit entrepreneur and business details
• Prepare a project plan
• Upload documents online
• Track application status
• Complete verification and sanction process

Online Application Process

1. Visit the official Stand-Up India portal
2. Register as an applicant
3. Fill the loan application form
4. Upload business plan and documents
5. Submit application and track status

Offline Application Process

1. Visit bank branch offering scheme
2. Submit loan request and documents
3. Attend interview or verification
4. Receive sanction and loan disbursal

Documents Required for Stand-Up India Loan

• Identity proof
• Address proof
• PAN card
• Proof of business ownership
• Financial statements if applicable
• Business plan
• SC ST certificate if applicable
• Registration documents for entity

Challenges Faced by Stand-Up India Scheme

The Stand-Up India Scheme faces challenges such as low awareness limited financial literacy and difficulty accessing collateral. Delays in loan disbursal and reliance on documentation also hinder access. More training and streamlined processes can improve outcomes.

Business Loans as alternative to Stand-Up India Scheme

A Business Loan can serve as an effective alternative to the Stand-Up India Scheme for entrepreneurs who do not meet its eligibility criteria or require more flexibility. Unlike the scheme, Business Loans are widely available from banks and NBFCs such as Godrej Capital without restrictions on project type, and they often offer customised repayment options. Borrowers can use a Business Loan EMI Calculator to plan monthly instalments and manage cash flow efficiently, making it a practical choice for funding expansion, working capital, or new ventures.

Also Read: What is Business Loan: A Complete Guide

Final Thoughts

The Stand-Up India Scheme has improved entrepreneurial access and financial empowerment. It enables individuals to start businesses and contribute to economic growth. Alternatively, entrepreneurs can choose Business Loan for more flexibility.

Apply now for a Business Loan.

FAQs

Q.1. Can existing businesses avail Stand-Up India loans?

A. No. Only greenfield enterprises are eligible under the scheme.

Q.2. What is a greenfield enterprise in the context of the scheme?

A. A greenfield enterprise is a new business that has not received finance previously.

Q.3. Is collateral mandatory for all Stand-Up India loans?

A. Collateral may be required depending on bank policy and credit risk.

Q.4. Can I avail benefits from Stand-Up India and other government schemes simultaneously?

A. Yes. Applicants may receive benefits from multiple schemes if eligibility is met.

Q.5. How long does loan sanction and disbursal take under the Stand-Up Scheme?

A. Loan sanction can take weeks depending on project complexity and documentation.

Disclaimer:

The content presented on this page, including images and factual information, is intended solely as a summary derived from publicly available sources. GHFL/GFL (“Company”) does not claim ownership of such information, nor does it represent that the Companies have exclusive knowledge of the same. While efforts are made to ensure accuracy, there may be inadvertent errors, omissions, or delays in updating the content. Users are strongly encouraged to independently verify all information and seek expert advice where necessary. Any decisions made based on this content are solely at the discretion and responsibility of the user. Godrej Capital and its affiliates assume no responsibility for any loss or damage that may result from the use of or reliance on the information provided herein.