Stand Up India scheme was launched on April 5th, 2016 by Hon’ble Prime Minister of India to help SC, ST and women entrepreneurs in setting up of new businesses and obtaining a loan from banks for the same. Stand Up India scheme is a part of the Startup India Action Plan 2016 for promoting startups and new businesses in India. Through the Stand Up India scheme, the Government envisions the creation of opportunities to make job seekers become job creators. The scheme is applicable for all scheduled commercial bank branches in India.The objective of the Stand-Up India scheme is to facilitate bank loans between 10 lakh and 1 Crore to at least one Scheduled Caste (SC) or Scheduled Tribe (ST) borrower and at least one woman borrower per bank branch for setting up a Greenfield Project. This enterprise may be in manufacturing, services or the trading sector.
Details
A scheme by Ministry of Finance for financing SC/ST and/or Women Entrepreneurs by facilitating bank loans for setting up a greenfield project enterprise in manufacturing, services, trading sector and activities allied to agriculture. The objective of this scheme is to facilitate bank loans between Rs. 10 lakh and Rs. 1 Crore to at least one Scheduled Caste (SC) or Scheduled Tribe (ST) borrower and at least one woman borrower per bank branch for setting up a greenfield enterprise. In case of non-individual enterprises, at least 51% of the shareholding and controlling stake should be held by either an SC/ST or Woman entrepreneur.
Amount of Loan
A bank loan of Rs.10 lakhs to Rs.100 lakhs is provided can be provided as a composite loan (working capital or term loan) to eligible borrowers. Composite loan of upto 75% of the project cost inclusive of term loan and working capital can be provided under the Stand Up India scheme. Further, the stipulation of the loan being expected to cover 75% of the project cost would not apply if the borrower’s contribution along with convergence support from any other schemes exceeds 25% of the project cost.
Margin money under this scheme can be provided in convergence with eligible Central / state schemes with providing margin money support. However, the borrower would still require to bring in minimum of 10% of the project cost as own contribution.
Benefits
- Facilitation of composite loan (inclusive of term loan and working capital) between ₹10 Lakhs and ₹100 Lakhs. Rupay debit card to be issued for convenience of the borrower.
- The web portal by SIDBI provides hand-holding support through a network of agencies engaged in training, skill development, mentoring, project report preparation, application filling, work shed / utility support services, subsidy schemes etc.
Loan Eligibility
Loan under the Stand-Up India scheme can be used for setting up of new businesses by SC, ST or women entrepreneurs in the manufacturing, trading or services sector. The following eligibility criteria must also be satisfied by the Entrepreneur to avail loan under the scheme.
- Applicant must be an SC/ST and/or woman entrepreneurs, above 18 years of age.
- Loans can be provided only for startups or new businesses in the manufacturing or services or trading sector.
- In the case of a private limited company, 51% of the shareholding and controlling stake should be held by either SC/ST and/or Women Entrepreneur.
- Applicant should not be in default to any bank/financial institution.
Repayment & Interest Rate
The loan provided under the Stand Up India scheme is sanctioned with a repayment period of upto 7 years and a moratorium of 18 months. In case of working capital limit, the limit is sanctioned as an overdraft facility and Rupay debit card can be issued for the convenience of the borrower for operating the overdraft facility. Working capital limit above 10 lakh is typically sanctioned by way of the cash credit limit.
The rate of interest must be the lowest applicable rate of the bank for that category (rating category) not exceeding the base rate of the bank + 3% + tenor premium. Loan under this scheme is provided at a very competitive rate of interest.
Collateral Security
Banks can request for collateral security or provide the loan under the CGTMSE scheme without any collateral security. The bank makes the decision on collateral security as that depends on the borrower profile.
Application Process
- The first step is to visit the official portal of StandUp India at: https://www.standupmitra.in/Login/Register
- Enter the full details of the business location.
- Select the category between SC, ST, Woman, and whether the stake held is 51% or higher.
- Select the nature of the proposed business; the loan amount desired description of the business, the details of the premises, etc.
- Populate the fields with past business experience, including tenure.
- Select the need for hand-holding is required.
- Enter all the personal details sought, which include the name of the enterprise and the constitution.
- The last step is to select the register button to complete the process.
Documents Required
- Proof of Identity: Voter’s ID Card / Passport / Driving License / PAN Card / Signature identification from present bankers of proprietor, partner of director ( if a company)
- Proof of Residence: Recent telephone bills, electricity bill, property tax receipt /Passport / voter’s ID Card of Proprietor, partner of Director (if a company)
- Proof of Business Address
- Proof that the applicant is not a defaulter in any Bank / Financial Institution
- Memorandum and articles of association of the Company / Partnership Deed of partners etc.
- Assets and liabilities statement of promoters and guarantors along with latest income tax returns.
- Rent Agreement (if business premises on rent) and clearance from pollution control board if applicable.
- SSI / MSME registration (if applicable)
- Projected balance sheets for the next two years in case of working capital limits and for the period of the loan in case of term loan.
- Photocopies of lease deeds/ title deeds of all the properties being offered as primary and collateral securities.
- Documents to establish whether the applicant belongs to SC/ST Category, wherever applicable.
- Certificate of incorporation from ROC to establish whether majority stake holding in the company is in the hands of a person who belongs to SC/ST/Woman category.
- Profile of the unit (includes names of promoters, other directors in the company, the activity being undertaken addresses of all offices and plants, shareholding pattern etc.
- Last three years balance sheets of the Associate / Group Companies (if any).
- Project report (for the proposed project if term funding is required) containing details of the machinery to be acquired, from whom to be acquired, price, names of suppliers, financial details like capacity of machines, capacity of utilization assumed, production, sales, projected profit and loss and balance sheets for the tenor of the loan, the details of labour, staff to be hired, basis of assumption of such financial details etc.
- Manufacturing process if applicable, major profile of executives in the company, any tie-ups, details about raw material used and their suppliers, details about the buyers, details about major-competitors and the company’s strength and weaknesses as compared to their competitors etc.
FAQs
What is the nature and size of the loan under the Stand-Up India Scheme?
Composite loan (inclusive of term loan and working capital) between 10 lakh and up to 100 lakh representing up to 85% of the project cost would be eligible.
How much will be the interest rate for the loan?
The rate of interest would be lowest applicable rate of the bank for that category (rating category) not to exceed (base rate (MCLR) + 3%+ tenor premium).
