Starting a business in India requires capital, and while traditional banks offer funding options, many early-stage startups find it challenging to secure loans due to limited financial history or collateral. This is where Non-Banking Financial Companies (NBFCs) and government-backed schemes step in to support entrepreneurs. In this blog, we will explore the top NBFCs that provide startup financing and government initiatives such as the Seed Fund Scheme to help businesses grow.
Top NBFCs for Early-Stage Startups in India
1. Fullerton India
Fullerton India provides unsecured business loans to startups, making it an attractive option for entrepreneurs who lack collateral. Key features include:
- Quick loan processing
- Repayment tenure of up to 48 months
- Loan amounts up to ₹50 lakhs
- Competitive interest rates
2. IDFC FIRST Bank
IDFC FIRST Bank offers customized financial solutions to startups, including business loans and working capital financing. Notable benefits include:
- Zero balance startup current accounts for the first three years
- Secured credit cards for startups
- Free and unlimited IMPS/NEFT/RTGS transactions
3. GetVantage
GetVantage is a revenue-based financing NBFC that allows startups to raise capital without equity dilution. Instead of fixed EMIs, businesses repay the loan through a percentage of their future revenue. This model is beneficial for startups with fluctuating income.
4. Shriram Finance
Shriram Finance is known for financing small businesses, including MSMEs and startups. It offers:
- Business expansion loans
- Commercial vehicle financing
- Competitive interest rates and flexible repayment options
5. SIDBI (Small Industries Development Bank of India)
SIDBI is not an NBFC but plays a crucial role in funding MSMEs and startups. It provides refinancing options to NBFCs that further lend to startups and small businesses.
Government-Backed Schemes for Startup Funding
Apart from NBFCs, the Indian government has launched various funding initiatives to boost startups. One of the most notable ones is the Startup India Seed Fund Scheme (SISFS).
Startup India Seed Fund Scheme (SISFS)
The SISFS is designed to provide financial assistance to startups at the idea stage, helping them develop prototypes and scale their business.
Key Features:
- Funding up to ₹50 lakhs for eligible startups
- Grants for prototype development and market entry
- No collateral or repayment obligations for grants
- Eligibility: Startups recognized by DPIIT and less than two years old
- More details: Startup India
Other Government Loan Schemes for Startups
- Credit Guarantee Scheme for Startups (CGSS) – Provides credit guarantees for loans taken by DPIIT-recognized startups. More details: CGSS
- Pradhan Mantri Mudra Yojana (PMMY) – Offers microfinance loans up to ₹10 lakhs under categories like Shishu, Kishor, and Tarun. More details: MUDRA
- Stand-Up India Scheme – Provides funding support to SC/ST and women entrepreneurs for setting up greenfield businesses. More details: Stand-Up India
Final Thoughts
For startups in India, funding is no longer an obstacle, thanks to various NBFCs and government-backed schemes. Entrepreneurs should evaluate each option based on their business needs, financial status, and repayment capacity before applying. Whether through revenue-based financing, unsecured loans, or government grants, startups can find multiple avenues to fuel their growth and success.
