Funding for startups is right now one of the sensational topics in India. It is encouraging to watch the government coming forward to support these newly developed ventures. Thus, the government funding for startups will create a favourable ecosystem to ensure a perfect ambience for the budding entrepreneurs. It will empower different ventures by spurring the desire for growth and innovation among the startups and creating a more conducive atmosphere for the implementation of projects. If a startup manages to get seed funding from the Indian government, it can go a long way in augmenting the organization’s growth and development. However, professional guidance at this juncture can really help a startup secure funding and this is where a platform such as Coffeemug.ai can be of extreme help. Being an AI-driven platform, Coffeemug.ai can connect you to mentors and professionals to guide you through the process of becoming eligible and applying for government funding.
How to get funding for startups in India from the government?
In an effort to receive government funding for startups in India, the startup needs to adhere to certain guidelines and meet the requirements mentioned under the eligibility criteria. A list of guidelines needs to be followed to meet the eligibility for applying for government funding for setting up a business. For instance, small incubators are eligible to get funds up to Rs. 5 crores, which is usually provided in several instalments. However, it is important for a startup to meet certain eligibility requirements and if a startup needs assistance to determine their eligibility then coffeemug.ai can be the right platform to provide guidance in this direction.
Eligibility For Government Funding
You must ensure that you qualify for the funding from Government for a startup before applying. These criteria are:
- You have been operating in India for 10 years, starting from your incorporation date.
- The annual turnover must not exceed Rs. 100 crore in any of the financial years.
- You are registered as a firm, LLP or a private limited company.
- You are working to improve certain processes or products and have a proper business plan for innovation. There must be a high potential for generating employment opportunities.
Funding from the government for startup
The government’s role in boosting startup funding is clearly evident from the various schemes the government is offering to the startups. These schemes include:
1. SAMRIDH Scheme: The main objective of this scheme is to promote the growth of software product companies in India. It is one of the initiatives of the central government to boost entrepreneurship in India. Under this scheme, the startup can get government funding up to Rupees Forty lakhs. However, the amount will depend upon their growth stage and definitely, the value of the business. Thus, the businesses will get acceleration for getting different connections from customers, investors and international projects.
2. Startup India Seed Fund: Under this scheme, the Government is allowing financial assistance to any startup in India at the seed stage. In short, it is popular as SISFS. The seed funding from the Government will provide appropriate support to the startups for elevating to a higher level. They can now qualify for raising funds from multiple angel investors or borrow loans from other financial institutions or banks. To become eligible for this scheme, the startup must have an innovative idea and utilise the latest technologies for the purpose of in-house research and development only. As per the guidelines, businesses can opt for funds up to a maximum amount of Rs. 10 lakhs. The Government will provide seed support only by the means of debt or convertible debentures or Government-approved grants.
3. Startup India Initiative: This flagship program of the Indian Government aims at building a strong infrastructure to promote the various startup initiatives in India. The scheme came into action in 2016 and it fulfils three main objectives of promoting the startups in India, generating more employment opportunities and aiding in the creation of substantial wealth. To become eligible for funding under this scheme, you must qualify the conditions for a startup. An eligible startup must focus on the innovation or development of a single product.
4. MUDRA Bank: The full name of this scheme is Pradhan Mantri Mudra Yojana. Under this scheme, any small business person can borrow a sum up to Rs.10 lakhs from different mutual funds, banks and financial institutions. Collateral is not essential for Small Micro enterprises.
5. Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE): This scheme covers both the new and existing businesses to obtain collateral-free loans. It is specifically for small and micro enterprises only. The Indian Government has developed such a scheme to help these organizations get funding up to Rs. 2 crores if they are involved in rendering services or manufacturing of any article or products. In the case of retail trade, the maximum amount can be Rs. 1 crore. Moreover, the Government can give a guarantee for availing of multiple credit facilities if the startup does not have any collateral security.
Importance of CoffeeMug.ai in government funding
To become aware of the latest schemes of the Indian Government and to facilitate setting up new businesses, get connected with CoffeeMug.ai. This online platform will connect you with a wide network of industry experts having profound knowledge about the government schemes for startups. The expertise of these professionals will not only guide you in knowing which scheme to apply for but it will also help you steer your startup in the right direction.
FAQs
Q. How do I get Government startup funding?
A. To get funding from the government, entrepreneurs can apply for funding under the Startup India seed fund scheme on the official webpage. The government would provide them with seed funding after confirming their application.
Q. What are the Government schemes for startups?
A. Some of the top government-sponsored schemes in India for startups and MSMEs are:
- Credit Guarantee Trust Fund for Micro & Small Enterprises (CGTSME)
- Pradhan Mantri Mudra Yojana
- Design Clinic for Design Expertise to MSMEs
- Financial Support to MSMEs in ZED Certification Scheme
- Credit Linked Capital Subsidy for Technology Upgradation (CLCSS)
Q. What Government initiatives are there to help entrepreneurs?
A. Government has launched several programs such as:
- Gram Udyog Vikas Yojna
- National SC-ST Hub
- Honey Mission Programme / Beekeeping
- Ambedkar Social Innovation & Incubation Mission
- Work-Shed Scheme for Khadi Artisans
- Pradhan Mantri Mudra Yojana (PMMY)
- Prime Minister Employment Generation Programme (PMEGP)
- PM SVANidhi
Q. How do startups get funding in India?
A. The Startup India Seed Fund Scheme and the SIDBI Fund of Funds are two lending schemes launched by the government to give collateral-free debt to budding entrepreneurs and acquire low-cost funding.
