Stand Up India: An Ultimate Funding Scheme for Entrepreneurs

Tanya Verma

05 Sep, 2019

Stand up India like numerous other scheme is an initiative by the Government of India to promote entrepreneurship development within the country. Startup India, MUDRA, NABARD, Credit Guarantee Scheme, New Gen IEDC, AIC, SMILE, etc. are just a few to name those schemes. In this blog, we are going to learn about the Stand-up India program, started in 2016.

About Stand up India Scheme

Stand up India scheme was launched by the government of India in the year 2016. This scheme caters women entrepreneurs. Additionally, this scheme also focuses on providing loans to people belonging from the SC and ST community. It is mandatory for every bank to provide loan to at least one woman entrepreneur or ST/SC borrower. The loan amount ranges minimum limit from Ten Lakh Rupees to maximum up to One Crore Rupees. The loan is given as working capital with a maximum return period of seven years.

The Objective of Stand Up India scheme

The primary objective of the Standup India scheme is to ensure encouragement of entrepreneurship among women and people belonging from the Scheduled Caste / Scheduled Tribe categories. It supports people from the specified criteria to set up their own startups outside the farming sector, by providing them with loans from various government authorized sources ranging from Rs. 10 lakhs and Rs.1 crore. It was launched on 5^th April 2016 by the honorable Prime Minister of India.

How to Apply for a Loan under Stand Up India Scheme

You can apply for getting a loan under the Stand-up India scheme in the following ways;

• Directly at any bank’s branch
• Through SIDBI’s Standup India official website^[1] portal
• Through the Lead District Manager {LDM} – A list of LDMs are available on the Standup India portal
• Or through any Common Service Centers {CSCs}

Steps to Apply for a Loan from Standup India Portal

Follow the following steps to get a loan under the Standup India scheme through the official portal;

• Step 1: Visit the Standup India official portal
• Step 2: Click on “Apply here.” The registration page will open after clicking.
• Step 3: Fill all the required data and agree with the terms and conditions by clicking on the given space
• Step 4: Click on “Register”  
• Step 5: Choose a handholding support
• Step 6: Fill the application form
• Step 7: Apply to a preferred lender

See our recommendation: Are Startups in India Eligible for Tax Benefits?.

Who is Eligible?

Under the Standup India scheme people belonging from the ST/SC category or women can take a loan for setting up a new business in the manufacturing, trading, and service-providing sector.  Furthermore, the following criterion must be met to avail loan under this scheme:

• Applicants falling under the ST/SC or women entrepreneur categories
• The person falling under any of the above criteria must be at least eighteen years old or above
• Loans are provided only to startups or new business entities in the trading, manufacturing or services sector
• In case the entity is a private limited company, then the applicant must hold 51% of the shareholding
• The applicant must not be a defaulter in relation to a bank or any financial institution

Interest Rate, Loan Repayment, and Collateral Security

The interest rate of the loan under stand-up India must be the lowest applicable rate of the bank for that category. Also, the rate of interest must not exceed the base rate + 3%+ tenor premium.

Loans under the Standup India scheme are sanctioned with a repayment period up to seven years and a moratorium of eighteen months. The limit is provided as an overdraft facility in case of working capital. Also, a Rupay debit card can be issued for the convenience of the borrower for the operating of the overdraft facility. Furthermore, the working capital limit above ten lakh rupees is sanctioned by the method of cash credit limit.

Banks can provide loan under CGTMSE Scheme without any Collateral security or can request for it in other cases. Also, decisions related to Collateral security depend on the profile of the borrower.

Documents Required

The following documents are required to apply for a loan under the Standup India scheme;

• Any of the following identity proofs:
  • Voter’s card
  • Passport
  • PAN card
  • Driving license
• Any of the following residence proofs:
  • Latest telephone
  • Electricity bill
  • Property tax receipt
• Business address proof
• Memorandum and article of association of the firm
• Rent agreement
• Photocopy of Lease deed/Title deed
• Cast certificate
• Balance sheets of the last three years
• Manufacturing process if applicable
• Certificate of incorporation of the entity
• Profile of the entity
• Any other required document

Conclusion

The Standup India Scheme was launched by our honorable Prime Minister, Mr. Narendra Modi on 5^th April 2016. This scheme was initiated to encourage entrepreneurship among women and SC/ST category people. The Standup India Scheme helps these people get loans for initiating a new business venture. It is a part of the Standup India Action Plan 2016 for the promotion of startups and new businesses in India. Government visions are creating more Job Creators than Job Seekers.

Also, Read: Startup India Registration Process – The Complete Guide.