Are there different loan options for startups versus established businesses?

Yes, there are some differences in the business loan options available for startups versus established businesses:

For Startups:

• Specific government schemes like Startup India, Standup India, and MUDRA offer loans up to ₹1 crore at concessional rates.
• Some banks and Non-Banking Financial Companies (NBFCs) have specialised products for new entrepreneurs with relaxed collateral norms.
• Angel funding/Venture Capital (VC) funding is an option for innovative startups along with crowdfunding platforms.
• Accelerator and incubator programs also provide mentorship and seed funding.
• Can avail collateral-free loans under Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) scheme for new enterprises.
• Venture debt financing is available based on equity funding and cash burn.

For Established Businesses:

• Can access higher value business loans from banks against property or fixed assets.
• Unsecured loans are possible based on strong operating history and cash flows.
• Working capital loans from NBFCs are also an option.
• Asset-based lending is available through pledging accounts receivables, inventory, etc.
• Debt syndication from multiple lenders is possible for large, mature companies.
• A wider range of customised lending products based on the business lifecycle stage.

Therefore, startups have specific schemes, while established businesses can tap varied conventional financing routes.