Stand up india know the features and benefits of this unique scheme

The Stand Up India scheme, launched by the Prime Minister back in 5th April 2016, aims to provide financial advances to women and SC/ST entrepreneurs to help them initiate greenfield projects. The scheme will facilitate such loans to one women and one SC/ST individual per bank branch of a financial institution.

Under this scheme, beneficiaries can avail loans ranging from Rs. 10 Lakh and Rs. 1 Crore. The borrower should be a first-time business entrepreneur to avail and utilise the scheme.

What are the features of this scheme?

  1. Eligibility

Applicants have to be 18 years or above. Non-individual enterprises can also utilise such loans provided that at least 51% share of the company is owned by a woman or an SC/ST person.

  1. Loan size

The scheme will provide up to 75% of the project capital including working capital and term loan. But this contribution is subject to certain specific terms. Borrowers can refer to other State or Central financing schemes for the 25% remainder. However, the beneficiary has to contribute a minimum of 10% of the total loan sum.

  1. Rate of interest

Stand Up India will charge only the lowest possible rate of interest to the borrowers.

  1. Repayment tenor

Borrowers will have to repay the loan within 7 years with a maximum moratorium period of 18 months.

  1. Collateral

Financial institutions may require collateral from the borrowers or a guarantee from the Credit Guarantee Fund Scheme for Stand-Up India Loans (CGFSIL).

What are the documents required to avail this scheme?

Beneficiaries have to provide the following documents to avail loans under the Stand Up India scheme:

  • Proof identity – PAN, Driving License, Passport, Voter ID, etc.

  • Proof of address – Latest utility bill, Voter ID, Passport, property tax invoice, etc.

  • Business proof – Partnership Deed, Memorandum and Articles of Association, SSI/MSME registration, RoC certificate, etc.

  • Financial statements – Latest income tax returns, balance sheet, etc.

  • SC/ST certificate.

  • Collateral Documents – Title deed, lease deed, etc. of the asset.

Entrepreneurs can opt for an unsecured business loan in case they don’t have any collateral to pledge.

Financial institutions may also require additional documents depending on location and other factors for this scheme.

How to apply for Standup India Scheme?

Beneficiaries can apply for loans under this scheme in the following ways:

  • From the official website of Stand Up India.

  • Directly from a lender branch.

  • Via the Lead District Manager (LDM).

An LDM, posted in each district, will monitor the loan process and address any issues arising with the beneficiary or lender.

Applicants are divided into two groups:

  1. Ready borrower

One who does not need any assistance to avail a loan. The borrower will receive an application number with which he/she can track their application and disbursal status.

  1. Trainee borrower

One who requires assistance to avail a loan. The LDM and Stand-Up India Connect Centres (SDCC) of SIDBI and NBARAD will provide the necessary guidance to a borrower in any of the following ways:

  • Skilling

  • Financial training

  • Detailed project planning

  • Margin money

  • Mentoring

  • Utility connections

  • Work shed

All the assistance mentioned above will be carried out by Vocational Training Centres, Financial Literary Centres, Rural Self Employment Training Institutes, District Industries Centres, etc.

It is vital for a first-time business owner to know how to set up their trading business, or their services or manufacturing business.

The LDM will monitor and assist the beneficiary in both availing the funds as well as to utilise the loan amount comprehensively. Once completed, a beneficiary will receive the loan application from the official portal.

What are the benefits of this scheme?

The Stand Up India scheme provides the following benefits:

  1. Income tax benefits

Beneficiaries receive 100% income tax exemptions for 3 years. They will also enjoy tax benefits if they invest their capital gains in a Government-notified scheme within 6 months. Borrowers will also enjoy tax benefits on investments above the fair market value.

  1. Discounts on patents

The scheme provides up to 80% discount on patent application along with rebate on charges.

  1. Research parks and incubators

The Government will establish 7 research parks and 35 incubators across the country to help beneficiaries with their start-ups.

All in all, the Stand Up India scheme has come up as one of the easiest ways for entrepreneurs to finance their growing business.

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