Table of Contents
A trend set by the young generation today is a boom in youth entrepreneurs. There are many college graduates in India looking to set up their own business ventures. While some of these people have a source of capital like family income or funds sourced from relatives and friends, many don’t have this luxury. Therefore, they turn to finding a business loan on degree certificate which obtained after their college graduation.
What is a business loan on degree certificate?
A business loan obtained on the basis of your degree certificate is called a business on degree certificate. If you have a degree certificate from the approved list of colleges specified by the financial institution, you will be eligible for a startup business loan provided you fulfill other business loan eligibility criteria.
Features of a business loan on degree certificate
Have a look at features of a business loan product that can be applied to using a degree certificate:
- Business loans are provided for the purposes of starting a business including purchasing land and other equipment.
- These are usually in the category of small business loans/startup loans is granted for a tenure of up to 5 years
- Most lenders will ask for collateral as security against the loan amount
- Lenders will also ask for a business model and plan to be prepared which are to be submitted along with the application.
Eligibility criteria and documents required
The eligibility criteria for graduates looking for business loan are as follows:
- The applicant must be at least 18 years of age.
- The applicant must be an Indian citizen.
- The applicant must have completed graduation in any stream.
- The applicant must be a graduate and must have a business plan and a business model in place before applying for the loan.
Documents required for this loan application will be:
- Aadhaar card
- PAN card
- Bank statement for the past 12 months
- Class 10 or equivalent certificate
- Class 12 or equivalent certificate
- Degree certificate
- Business plan
Who provides a business loan on degree certificate?
This loan product is not marketed much. Therefore, you will have to contact a bank or a lender directly to know if they have such a business loan product. Most lenders will be able to sanction a business loan product under the startup loan category. Therefore, if you are planning to apply with leading banks you must contact them to inquire about their startup loan products.
You can also look at government loan schemes that extend startup loan. Have a look at the government schemes that offers startup business loan for graduates:
The Pradhan Mantri Mudra Yojana (PMMY) scheme is popularly known as Mudra loan and offers short term loans for startup businesses. The loan scheme is divided into three categories namely Shishu, Kishor and Tarun. These categories signify the requirement of credit facility and the stage of growth development of the borrowing business unit.
Graduates looking for business loans can apply for PMMY scheme under the Shishu category. The scheme extends loan funding of up to ₹50,000 and caters to business owners whose needs are limited. This is an effective financing scheme for startups and entrepreneurs, who are just kick starting their businesses. This is a government startup business loan without collateral that is offered at low interest rates.
Credit Guarantee Fund Trust for Micro and Small Enterprises or CGTMSE scheme is an initiative by the Government of India to help MSMEs and new entrepreneurs avail collateral-free loans for setting up new enterprises.
CGTMSE provides a guarantee cover to loans taken by MSMEs from financial institutions. This means that if you default on your loan, the government will help you pay a major part of your loan repayment amount. Under this scheme, the government will provide guarantee covers for loan amounts up to ₹500 lakh.
Stand-Up India scheme
Stand-Up India is a startup business loan for women by Government of India. The scheme provides financial assistance to SC/ST and women entrepreneurs for setting up greenfield businesses involved in manufacturing, services, trading or agri-allied activities.
This startup business loan by Indian government offers term loans and working capital loans between ₹10 lakh to ₹1 crore. This is an unsecured business loan for startups that can finance up to 75% of the project cost.
Coir Udyami Yojana
This is a credit linked subsidy scheme for setting up of coir units introduced by the Government of India. The maximum cost of the project must be ₹10 Lakh plus working capital, which shall not exceed 25% of the project cost. Banks will lend up to 55% of the project cost and 40% of the project costs will be subsidised. Visit: www.coirservices.gov.in to apply for the scheme.
A business loan on degree certificate can be obtained from top lenders and other financial institutions. If you are looking for a startup business loan, visit Tata nexarc. At Tata nexarc, we have partnered with leading lenders in India and offer unsecured business loans starting from ₹3 Lakh at low interest rates. With Business Loans through Tata nexarc there’s minimum documentation, quick loan disbursal, and you can check your eligibility in just 5 minutes.