How to Get Startup Loan for New Business in India (2025)

Starting a new business in India? The biggest hurdle most aspiring entrepreneurs face is funding. A startup loan for a new business can help you turn your idea into a thriving venture. In 2025, the Indian government and financial institutions are offering numerous loan schemes with low interest rates, minimal paperwork, and fast approval. Let’s walk you through the entire process in a simple, step-by-step manner.

What is a Startup Loan for a New Business?

A startup loan is a type of business loan offered to new or early-stage businesses to help them with:

• Working capital
• Equipment purchase
• Marketing and operations
• Hiring staff
• Technology and infrastructure setup

📌 Note: Most startup loans in India are collateral-free, especially those backed by the government or MSME programs.

Top Startup Loan Schemes in India (2025)

📌 Tip: MUDRA and Stand-Up India are the most popular for first-time entrepreneurs.

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Step-by-Step Process to Get a Startup Loan

Step 1: Create a Solid Business Plan

• Include market research, competition, revenue model, and break-even point.
• Highlight how your digital skills will grow the business.

Step 2: Register Your Business

• Sole proprietorship, partnership, LLP, or Pvt Ltd company.
• Apply for GST registration, PAN, and UDYAM (MSME) certificate.

Step 3: Check Eligibility & Loan Options

• Use online tools from banks and NBFCs to check your loan eligibility.
• Choose government-backed schemes if you want lower interest and collateral-free loans.

Step 4: Prepare Required Documents

• ID & address proof
• Business registration certificate
• PAN card
• Bank statements (6–12 months)
• Financial projections
• Proof of digital marketing presence (if available)

Step 5: Apply Online or Visit a Branch

• Apply via official government portals like udyamregistration.gov.in or lender websites.
• You can also apply through the Startup India portal.

Step 6: Await Sanction & Disbursal

• A loan is usually approved within 7–15 working days.
• Funds are disbursed directly to your business account.

Documents Required for Startup Loan

• Aadhar Card / PAN Card
• Business Incorporation Certificate
• Bank Statements (6-12 months)
• Income Tax Returns (if applicable)
• Project Report / Business Plan
• Address proof of business
• UDYAM MSME registration
• Proof of investment (if any)

Eligibility Criteria

• Age: 21–60 years
• Indian citizen
• Businesses should be newly registered or operational for less than 5 years
• Must not have defaulted on loans
• Businesses should be profit-generating (or with a clear growth roadmap)
• Must demonstrate basic digital skills (website, social media, e-commerce, etc.)

Best Banks & NBFCs Offering Startup Loans in 2025

• SBI Start-Up Loan
• HDFC Business Growth Loan
• ICICI Bank MSME Loan
• Axis Bank Mudra Loan
• Bajaj Finserv Startup Finance
• Lendingkart
• FlexiLoans

📌 Tip: Compare processing fees, prepayment charges, and customer reviews before choosing a lender.

ALSO READ | How to get a Business Loan: Eligibility, Documents, Interest Rate Calculator & More

Government Support & Subsidy Programs

• Startup India Action Plan
• MSME UDYAM Registration Benefits
• Technology and Innovation Funding (TIF)
• Digital India Startup Hub
• National Small Industries Corporation (NSIC) support

📢 These programs offer subsidies, credit guarantees, training in digital skills, and networking.

ALSO READ | What is Startup India? Know All About the Initiative for Indian Startups

Common Mistakes to Avoid

• Submitting incomplete documents
• Ignoring credit score
• Not customising the business plan
• Applying for the wrong loan category
• Skipping professional help (CA/financial advisors)

Tips to Improve Loan Approval Chances

• Maintain a CIBIL score of 700+
• Show a clear repayment capacity
• Invest some personal capital first
• Build digital presence (Google listing, Instagram, etc.)
• Apply during the financial year’s first quarter
• Choose the right scheme based on your business model

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Conclusion

Getting a startup loan for a new business in India (2025) is easier than ever, thanks to digital platforms, government schemes, and rising awareness. By preparing your documents well, registering your business properly, and showcasing a realistic growth plan, you can secure the funding you need. Don’t let a lack of money stop your dreams—smart planning + right knowledge = successful startup funding.

Frequently Asked Questions (FAQs)