Government Loans for Startups and businesses in Bhubaneswar, Odisha – Meaning, Schemes, Eligibility, Factors, Documents Required,

The Nasscom report for the year 2018 titled “Indian Start-up Ecosystem 2018- Approaching Escape Velocity,” stated that India has the third-largest number of start-ups in the world. Undoubtedly, the start-up ecosystem is growing and thriving in the country with more than 65000 start-ups registered under the Start-up India Scheme with already 100 start-ups reaching unicorn valuations and many more coming. It is important to understand that without the appropriate funding and resources required to start a business and run it in the early stages, it is just a mere idea. They need funds to maintain a strong fiscal stimulus with concessional working capital loans to ensure there is adequate liquidity available to run day-to-day business operations and fund business expansion requirements.

However, Small scale businesses and entrepreneurs in Bhubaneswar, Odisha find it hard to obtain funds from banks/financial institutions, which makes them turn to angel investors and venture capitalists, which is even harder, and even if it does, it costs them equity and ownership at the beginning itself. Realizing the importance of the start-ups and small-scale units in the economic development and employment generation in the country, the Government of India has rolled –out various policies and programs to facilitate credit facilities to start-ups and existing businesses in a rather simpler and more efficient manner.

These loan schemes in Bhubaneswar, Odisha have been introduced with the primary objective to offer financing through business loans with flexibility in collateral and lesser documentation requirements. Any start-up or entrepreneur can borrow funds in the form of a business loan through any of these schemes offered by the government which suits their business needs. Further, the Small Industries Development Bank of India (SIDBI) has started to offer funds directly to start-ups and MSME businesses rather than channelizing funds through banks or financial institutions at concessional interest rates which are way lower than those offered by banks by almost 300 basis points.

In case you are going to start your business in Bhubaneswar, Odisha anytime soon or already looking for options to fund your business, you need to take note of these business loans for your start-up as provided below.

Meaning & Definition of Start-ups in Bhubaneswar, Odisha

Under the Start-up India Scheme launched in the year 2016, a start-up in Bhubaneswar, Odisha means an entity that is-

1. An entity incorporated either as a Private Limited Company /a Partnership Firm/Limited Liability Partnership under their respective Acts under the Indian Law up to ten years from the date of incorporation/ registration.
2. The annual turnover of such an entity has not exceeded one hundred crore rupees in any of the financial years since incorporation/ registration.
3. The entity should be working towards innovation, development, or improvement of products or processes or services, or in case of a scalable business model with a higher potential to generate employment or creation of wealth or both.
4. However, such entity shall not be formed or constituted either through splitting up or reconstruction, of a business already in existence.

An entity shall cease to be a Start-up post the completion of a period of ten years from the date of its incorporation/ registration or the turnover of the entity exceeds one hundred crore rupees.

Odisha is formerly known as Orissa till 2011. It is located in the Eastern part of our country. 1st April is observed as Odisha Day. It is the 8th largest state in terms of area and the 11th largest state in terms of population. Odisha is the 3rd largest in terms of scheduled tribes, and population in India. This state shares its boundaries with West Bengal and Jharkhand in the north, Chhattisgarh in the west, Andhra Pradesh in the south, and the Bay of Bengal (2nd largest subdivision of India after the Arabian Sea) in the east. The region is also popularly known as Utkala (Ancient name), and this name also has its imprint on India’s national anthem,” Jana Gana Mana”. Demographically, various languages are spoken in this state, but amongst them, Odia is majorly spoken by the native people.
Odisha is an attractive tourist destination of various architectural wonders. Odisha is infamous for its historical heritage sites and enchanting views. From beaches to pilgrimage and monuments, Odisha offers a plethora of enthralling endeavors to travelers who visit from all over the world. There are a ton of places to attract tourists like Puri (one of the char-dhams or four holy places for Hindus), Bhubaneshwar (the temple city of India), Chilika lake in puri (India’s largest brackish water lagoon), Jaganath Temple in puri (World famous chariot festival in the month of June-July), Konark Temple (UNESCO World Heritage Site), Rourkela (steel city of Odisha) and many more.
According to the survey conducted by Forest India in 2012, Odisha comprises 31.41% of the state’s total area. Due to the favorable climate conditions, Odisha’s moist and evergreen tropical forests are suitable ecosystems for wild orchids. Odisha consists of various national parks, wildlife sanctuaries, and bio reserves such as Simlipal National Park (the highest tiger population in the state), Chandaka Elephant Sanctuary, and Bhitarkanika National Park, etc. The backbone of Odisha lies in the villages and farmers. The state government initiated various innovative schemes to increase farm productivity like the Jeebika scheme, Digital Mandi Yojana, Mobile Veterinary Unit (1st state to organize animal health camps), Biju Krushak Yojana, and many more. During the crisis times, the state government sponsored the Indian hockey team, which led to remarkable achievements for the country through their spectacular performance in the Tokyo Olympics.
Capital- Bhubaneswar

Top Business Idea in Odisha
Odisha’s main economy relies on agricultural-based products, production, and cultivation. However, by the collaborative efforts of inhabitants and government, State is transiting into business strata. Odisha is becoming the best place for entrepreneurs as the government is providing the ease of doing business and other essential facilities. The main realms in which lucrative business models can be set up are tourism, hotels, restaurants, transport, communication, insurance services, and other financial profiles. Given below is the list of feasible and profitable business ideas with less investment that can be commenced on a small scale.

Candle-making business
This is the most affordable business with mere investment; investors or entrepreneurs can initiate this business model. To fulfill the high requirement of candles in the state candle making business is a good startup idea. Moreover, there are different types of candles available such as traditional white, decorative, scented, and many other types. Even the raw materials used for the candle-making process are easily available in the market.
At the initial stage, you can start making candles at your home and sell them locally. After that, get in touch with the wholesalers, grocery stores, vendors, and many other places where the demand is high. There is already a huge market for decorative candles as a gift item. Once you have started making good connections in the local market, This small investment that you have made will gradually lead you to a massive profit.

Cashew nut processing business
The cashew nut processing business is a profitable and cost-effective business that can be initiated with a small investment. As we know, Orissa is a famous state for cashew nut production, so there is a high demand for cashew nuts in Odisha. First, let’s understand the market before starting the business. Cashew nuts need proper processing and finishing it is necessary as people do not consume raw cashew nuts. Day by day, people are getting more health-conscious, so they demand proper process cashews which contain multiple health benefits. But as per the demand for the cashew nuts, the supply of cashew nuts is not up to the mark. Therefore, before starting the business of cashew nuts, choose a preferred location where you can get raw materials. The small-scale business in providing a handsome salary.

Jute bag-making business
If you want to open a small-scale business, then preferably, a jute bag-making business is the best. Odisha is popular for jute production. Jute has significance in our daily lives, such as in the form of jute bags, chairs, tables, and many more. Hence has always been an integral part of our daily life. It can be a productive and cost-effective business if the raw materials are used effectively. From the business perspective, it requires a small investment, but you can earn a lot of money through its outcome. You can quickly start this business in Odisha as jute has been an integral part of our daily lives and is easily available all over the state.

Startup Ecosystem in Odisha
Over the past few years, several initiatives have been implemented by the Government of Odisha, and these Initiatives have majorly impacted the ease of doing business in Odisha. TheDepartment for Promotion of Industry and Internal Trade (DPIIT) has ensured that the state has a vibrant startup ex. Startup Odisha is the state’s prominent initiative to create a favorable ecosystem for the startup to aspire and flourish.
State provides the firm financial support for the investors or entrepreneurs for establishing both public and private institutions. Even the state has extended its support to the universities by conducting various training programs for the faculties to equip them in the region of entrepreneurship and innovation. The state has also planned to create an annual campaign named the startup Odisha Yatra. The main aim of this platform is to inspire and educate the students, innovators, and entrepreneurs of remote areas to realize the importance of entrepreneur goals which will be encouraging for the future of our state.
Let’s talk about the financial aid provided to the startups. The Odisha youth innovation award gives an amount of ₹ 50000/- for thinking of an innovative business idea, ₹ 1 lakh at the prototype stage, and INR 3 lakh at the scale-up stage to a large number of startups every year.

What are the government loan schemes for start-ups & existing businesses in Bhubaneswar, Odisha?

Provided below are some of the most popular and notable government schemes which facilitate finance for start-ups and new businesses in Bhubaneswar, Odisha-

i. NABARD schemes for MSMEs and start-ups in Bhubaneswar, Odisha–

National Bank for Agriculture and Rural Development NABARD is a rural developmental bank that primarily emphasizes the development of the rural sector in India through the strengthening of small-scale businesses and industries cottage industries, and other rural projects by offering concessional loans to them under various policies and programs.

These policies & programs have been aimed at augmenting capital investment, sustained income flow, and employment areas of national importance. Additionally, it has been a channel partner of the Govt. under several schemes projects with objectives such as social innovations and innovative projects related to soil & water conservation.

Some of these schemes in Bhubaneswar, Odisha include-

1. Agricultural Marketing Infrastructure Scheme;
2. Agri Clinics and Agri-Business Centres Scheme;
3. National Livestock Mission for development of Entrepreneurship and generation of Employment.
4. Dairy Entrepreneurship Development Scheme;
5. National Project on Organic Farming Scheme.

ii. Pradhan Mantri Mudra Yojana (PMMY) in Bhubaneswar, Odisha–

Pradhan Mantri Mudra Yojana is a scheme launched in the year 2015 by the Prime Minister of India under the Micro Units Development and Refinance Agency (MUDRA), an institution set up by the government with the purpose to finance business activities of the MSMEs and start-ups operating in the non-farming and non-corporate sector.

Mudra Scheme essentially offers business loans in the nature of working capital cum term loans to start-ups and existing small scale businesses up to a sum of Rs.10 Lakhs engaged in all kinds of business activities in the manufacturing, trading, and service sector.

Under the aegis of Pradhan Mantri Mudra Yojana, the MUDRA scheme offers three loan products, each of whom indicates the stage of growth and funds requirement and also affords a reference point for the next phase of graduation/growth of the respective start-up, namely as-

1. Shishu covers loans up to the maximum value of Rs 50,000,
2. Kishore covers loans up to the values between Rs 50,000 and up to Rs 5 Lakhs and
3. ‘Tarun’ covers loans up to the values between Rs5 Lakhs and up to Rs 10 Lakhs.

Any start-up or entrepreneur aged between18 to 65 years is eligible to apply for and avail of a Mudra Loan for a newly incorporated or any existing business without having to worry about the collateral or third-party security issues at a subsidized and affordable interest rate. Also, women entrepreneurs could obtain funds at discounted interest rates.The borrower start-up or existing business could apply for a Mudra Loan either through prescribed lending partners or through Small Finance Banks, Regional Rural Banks (RRBs), Micro-Finance Institutions (MFIs), and Non-Banking Financial Companies (NBFCs) either by contacting them directly or applying through the Udyami Mitra portal online.

iii. Credit Guarantee Scheme by CGTMSE in Bhubaneswar, Odisha–

The Ministry of MSME and the Small Industries Development Bank of India (SIDBI) jointly launched the Credit Guarantee Scheme (CGS) for MSMEs and start-up businesses intending to build a strong credit delivery system and facilitate a seamless flow of credit for the under-served and underprivileged and ensuring availability of finance from conventional lenders to new generation entrepreneurs.

Further, the credit guarantee scheme also aims to give reassurance of the timely loan repayments through guarantee covers to would make good the loss so incurred by the lender up to 50-85% percent of the credit facility and instead focus on the viability of the business of the start-up business while offering loan services under the scheme.

The funds offered under the Credit Guarantee Scheme are facilitated through public banks, private banks, foreign banks, and regional rural banks, who have played a significant role in offering guarantee covers to collateral and/or third-party guarantee free credit facilities extended by eligible Member Lending Institutions established under the scheme since last two decades.

Any existing or newly incorporated start-up engaged in either manufacturing or service activities could avail of funds under the Credit Guarantee Scheme. However, businesses engaged in retail trade, agricultural institutions, training facilities, or self-help groups have been expressly excluded under the scheme.

iv. Stand–Up India Scheme in Bhubaneswar, Odisha–

The Stand-up India Loan Scheme was introduced by the government of India in the year 2016 headed by the Small Industries Development Bank of India (SIDBI) with the primary objective to encourage the spirit of entrepreneurship among women and people from SC/ST backgrounds and increase their participation in the business industry.

This loan scheme ensures the facilitation of start-up loans between Rs. One Lakhs to One crore at least one Scheduled Cast (SC) or Scheduled Tribe (ST) borrower and at least one woman borrower per branch of each bank to set up a Greenfield enterprise which means first-time business venture of the beneficiary in either manufacturing or services, or in the trading sector.  However, such women entrepreneurs or SC/ST must hold at least 51% of the shareholding and controlling stake in the start-up business.

The loans so offered under the scheme are composite and include both term loans and working capital which could be up to 85% of the cost of the project for a term of seven years with a maximum moratorium period of 18 months.

v. Coir Udyami Yojana in Bhubaneswar, Odisha–

Coir Udyami Yojana is another subsidy scheme launched in the year 2014 for the purpose of encouraging ease of doing business in India. The purpose of this scheme is to offer funds to start-ups and MSMEs to set –up their coir units with project cost up to Rs 10 Lakhs including one cycle of working capital which should not be more than 25% of the cost of the project.

Under the Coir Udyami Scheme in Bhubaneswar, Odisha, the working capital portion of the loan shall not be considered for subsidy. So, if the rate of subsidy is 40% of the cost of the project, bank credit is 55% of the project cost, and the contribution of the beneficiary will be 5% of the project cost. The interest rate chargeable will be equal to the base rate and the maximum tenure of the loans shall not be more than seven years after the first moratorium. Further, the beneficiary start-up need not provide any collateral, security, or guarantor for the loans availed as the scheme is covered under Credit Guarantee Trust Fund Scheme.

Individuals (aged between 18 to 65 years of age),Non-Governmental Organisations (NGOs) or Self-Help Groups, Societies registered under the Societies Registration Act 1860, Co-operative Societies, and charitable trusts will be eligible to apply for this scheme. However, if the project has already been under subsidy of any other scheme launched either by the Central or any state government, then the cost of the project will not be eligible to avail of the Coir Udyami Yojana.

vi. Market Development Assistance Scheme in Bhubaneswar, Odisha–

The Ministry of Commerce, under the Govt. of India, launched the Market Development Assistance Scheme for start-ups and MSMEs to enhance their competitiveness and boost their marketing capabilities, and encourage businesses to access and expand their presence overseas through participation in international fairs, sales-cum-study tours, trade delegations, publicity, etc. The primary objectives of the Market Development Assistance Scheme include-

1. Encouragement to Small & Micro businesses to tap and grow in markets overseas.
2. Increasing participation of the Indian MSEs and their representatives in International Trade Fairs/ Exhibitions from Indian MSME sectors.
3. Enhance exports from start-ups and small-scale business enterprises.

Eligibility Criteria for Government Loan in Bhubaneswar, Odisha

All MSME start-ups and other related organizations in Bhubaneswar, Odisha to the MSME sector will be eligible to make an application and avail of financial assistance.

Fiscal interventions include-

1. The maximum financial support towards the participation of a start-up/MSME in an international exhibition/trade fair shall be maximum up to Rs. 30 lakh per event for other countries & Rs.40 Lakh for countries in Latin America.
2. Financial assistance would be offered between 25-95% of the Air-Fare and space rent to entrepreneurs based on the size and type of the MSME start-up enterprise. Whereas financial assistance for co-sponsorship of an event would be restricted to 40% of the net expenditure with an upper ceiling of Rs. 5 Lakh
3. The maximum amount of assistance towards costs such as airfare, space rental & shipping/ transportation charges for the General Category (except for enterprises from the North-east States/Women/or SC/ST Category)

vii. Sustainable Finance Scheme in Bhubaneswar, Odisha–

To offer finances to start-ups specifically working towards sustainable development projects which contribute to developing energy efficiency and cleaner production yet are not covered under the international or bilateral lines of credit, the Small Industries Development Bank of India (SIDBI) has introduced the Sustainable Finance Scheme for MSMEs and start-ups. All newly incorporated start-ups or existing businesses who either wish to invest in the waste management or have been already working in the field could avail funds for all the new or existing sustainable development projects related to renewable energy, green micro-finance, green buildings, eco-friendly buildings, etc

However, in the case of existing units, they shall be required to provide a track record of satisfactory past performances and sound financial position of the start-ups.

viii. Udyogini Scheme in Bhubaneswar, Odisha–

Udyogini Scheme or Udyogini Yojana was launched in the year 2014 by the Women Development Corporation under the Government of India. The primary objective of the scheme is to ensure better participation and welfare of women entrepreneurs in the Indian start-up ecosystem up to a value of Rs.3 Lakhs with a repayment tenure of 6-7 years. This scheme is eligible only for women entrepreneurs with an annual income lesser than 1.5 Lakhs. However, this annual limit of Rs. 1.5 Lakhs shall not apply in the case of widowed or disabled women.

Thus, the loans are offered at concessional interest rates or even without interest at competitive interest rates without charging any processing fee as financial assistance to them. Further, the loans do not need any collateral or guarantor for repayment purposes. Besides, the Udyogini scheme also offers financial support for skill development training programs for women.

ix. Bank Credit Facilitation Scheme in Bhubaneswar, Odisha-

The National Small Industries Corporation (NSIC) has entered several Memorandum of Understanding with various private banks/financial institutions and nationalized banks to offer necessary credit support to start-ups and MSME units with the objective to provide a seamless flow of credit, and is therefore known as the Bank Credit Facilitation Scheme.

This scheme helps MSMEs to obtain loans at competitive interest rates from the partner banks the start-up gets a favorable rating awarded by the Performance and Credit rating from the Ministry of MSMEs. The scheme also allows the MSMEs to transfer their existing bank account or create a new one in a different bank. This bank credit scheme supports MSMEs by helping them to file their loan application and submit applications to the banks.

x. Credit Linked Capital Subsidy Scheme in Bhubaneswar, Odisha-

Credit Linked Capital Subsidy Scheme is a scheme that focuses on the technological innovation & up-gradation of the MSME start-ups by way of an upfront capital subsidy of 15% to induct well-established and improved technology in the specified 51 sub-sectors and products approved by the Govt. of India. The primary objective of the scheme is to upgrade the plant & machinery either with or without business expansion to set up their facilities with appropriate eligible and proven technologies duly approved under scheme guidelines.

The scheme aims to facilitate technological up-gradation by offering subsidies to a small-scale industrial holding a valid UAM number comprising khadi, village, and coir industrial units on the institutional credit facilities availed by them for modernization of their production equipment and techniques. The beneficiaries under this scheme could avail of funds up to the maximum value of Rs. One crore. All the small-scale business start-ups registered with the Directorate of Industries who wish to upgrade their plant & machinery with new technology are eligible for this scheme.

Factors Affecting Eligibility of a Loan Applicant/Enterprise in Bhubaneswar, Odisha

Some of the key factors which affect the eligibility of the borrower start-up business in Bhubaneswar, Odisha are-

1. Age of the entrepreneur;
2. History of Repayment of Loans & financial stability of the applicant;
3. Nature and type of business
4. Applicant’s credit score or the credit rating of the business
5. Preferred Loan amount
6. Annual business turnover along with financial statements
7. Capital Invested and goods/raw materials/equipment/machinery;
8. Debts or existing loans, if any.

Documents Required for Government Loan in Bhubaneswar, Odisha

Though, the number of documents required in Bhubaneswar, Odisha for each job may vary from the other, provided below are some of the documents generally required by MSMEs or start-up businesses to avail of loan facilities-

1. Duly filled application form along with passport-sized photographs
2. KYC documents of the entrepreneur or business owner containing documents such as proof of identification, proof of address, and copy of utility bills.
3. Previous six months Bank statements
4. Copy of Business incorporation/registration Certificate
5. Copy of registered address of the business & vintage proofs
6. Business PAN card
7. Proof of person belonging to SC/ST/OBC category, where applicable
8. Any other document as required by the lender.

Conclusion of Government Loans for Startups and businesses in Bhubaneswar, Odisha

Therefore, the Government of India has launched various schemes and policies to encourage new-age entrepreneurs including women entrepreneurs and persons from the SC/ST category to ensure an increase in their participation in the making of the nation through the introduction of credit schemes at affordable cost and competitive interest rates.

If you wish to avail any of the above-mentioned schemes and programs in Bhubaneswar, Odisha always make sure to prepare a detailed business plan with a summary of potential growth and financial returns expected in near future. Submission of a clear plan with your application will create a strong impression and help you to get the best offers for your start-up venture.