Stand-up India and Start-up India
What is Stand-up India
The Stand-up India scheme is a government initiative launched in 2016 to promote entrepreneurship among women and entrepreneurs from SC/ST communities. The initiative aims to facilitate loans ranging from Rs 10 lakhs to Rs 1 crore for setting up greenfield enterprises in manufacturing services or trading sectors. A greenfield enterprise is a newly established business operation that starts from scratch, without using any existing infrastructure or facilities. Under this scheme, borrowers requiring hand holding for their greenfield projects can register themselves as trainee borrowers to avail various forms of support from the Lead District Manager (LDM) and linked offices of SIDBI & NABARD.
Stand-up India Scheme Highlights
| Interest Rate | Lowest applicable rate of the bank for the rating category |
| Loan Amount | Rs 10 lakh to 1 crore |
| Repayment Tenure | 7 years including a moratorium period of up to 18 months |
| Margin Money | 15% with at least 10% of the project cost as borrower’s own contribution and rest can be arranged in convergence with other Central/State schemes |
Table of Contents
Aim of the Scheme
- The scheme aims to support at least one borrower from Scheduled Caste (SC) or Scheduled Tribe (ST) category with bank loans ranging from Rs 10 lakh to 1 Rs crore.
- The project ensures that every bank branch facilitates at least one female borrower for establishing a new business in the manufacturing, services or trading sectors.
- For non-individual enterprises, it is required that a minimum of 51% ownership and controlling interest is held by an SC/ST or female entrepreneur.
Stand-up India Scheme Interest Rate
The Stand-up India scheme interest rate shall be the lowest interest rates which are offered by the bank for the particular category. However, the interest rate should not exceed the base rate MCLR + 3% and tenure premium.
Features and Benefits of Stand-up India Scheme
Some of the key features and benefits of the Stand-up India are:
- The scheme offers loans ranging from Rs 10 lakhs to 1 crore, including working capital for establishing new businesses.
- The loan is repayable in 7 years with a maximum moratorium period of 18 months.
- The Small Industries Development Bank of India (SIDBI) will spearhead the Stand-up India initiative with the participation of the Dalit Indian Chamber of Commerce Industry (DICCI) and other sector-specific institutes.
- The borrower is given a RuPay debit card for convenience and ease of operation.
- It provides an ideal platform for investors, offering expert guidance, time and legal knowledge.
- The scheme aims to remove business barriers, including legal and operational hurdles.
- The borrower can avail hand holding support through a network of agencies engaged in training, skill development, mentoring, project report preparation, application filling, workshed/ utility support services, subsidy schemes, etc.
Also Read: MSME Advantages and Disadvantages
Stand-up India Scheme Eligibility
Stated below are the eligibility criteria for availing loans under the Stand-up India Scheme:
- The applicant must be above 18 years of age.
- The entrepreneur must either be a woman or belong to the SC/ST community.
- The loan can be availed for only green field projects i.e, the first-time venture of the beneficiary in the services, agri-allied activities, manufacturing or the trading sector.
- For non-individual enterprises, SC/ST or women entrepreneurs must hold a controlling stake of 51% in the shareholding.
- The loan applicant must not be an existing defaulter to any bank or financial organisation.
Also Read: Business Loan Eligibility
Documentation for availing loan under the Stand-up India Scheme
Stand-up India Loan Application Documents
- Proof of Identity: Voter ID Card, Driving License, PAN Card, Signature identification from present bankers of the proprietor, Passport, Partner of Director
- Proof of Residence: Recent Telephone bills, property tax receipt, Passport, Voter ID card of the proprietor, partner or director
- Proof of Business Address
- Applicant should not be a defaulter in any bank or financial institution
- Memorandum and articles of association of the Company or Partnership Deed of partners, etc
- Assets and Liabilities statement of guarantors and promoters along with latest income tax returns
- If the business premises are rented, include the rent agreement and, if applicable, clearance from the pollution control board
- If applicable, SSI/MSME registration
- Projected Balance Sheets for the next 2 years in case of working capital limits and for the tenure of the loan in case of term loan.
- Photocopies of lease deeds or title deeds of all properties being offered as primary and collateral securities
- Documents to prove whether the applicant belongs to SC/ST category, if applicable
- Certification of incorporation from ROC to establish whether majority stake holding in the company is in the hands of a person who belongs to SC/ST/Women category.
Also Read: What is Udyam Registration Certificate?
For loans above Rs 25 lakhs
- Profile of the unit which includes, name of promoters, other directors in the company, the activity being undertaken addresses of all offices and plants, shareholding pattern etc.
- Last 3 year’s balance sheets of the Associate or Group Companies, if applicable
- Project report containing details of the machinery to be acquired, name of the suppliers, from whom to be acquired, price, financial details like capacity of utilisation assumed, production, capacity of machines, sales, projected profit and loss and balance sheets for the loan tenure, labour details, staff to be hired, etc.
- If applicable, include the manufacturing process, major executives, tie-ups, raw material details, suppliers, buyers, competitors and the company’s comparative strengths and weaknesses.
Challenges Regarding the Stand-up India Scheme
Some of the challenges associated with the Stand-up India Scheme:
- It limits the focus on educating people about the socio-economic aspects of Dalit and Women Entrepreneurship. Insufficient awareness might hinder the scheme’s effectiveness.
- The stipulated turnover of 25 crore is a challenge. Very few businesses led by women and SC/ST meet this criterion.
- Self-Help Groups often face issues like elite capture and local dominance. The scheme doesn’t outline measures to address these challenges.
- The banking sector’s inadequate penetration into rural areas creates a hurdle in the implementation of the scheme.
- The funding support ranging from 10 lakhs to 1 crore is considered insufficient for the manufacturing sector’s needs.
- Lack of knowledge in terms of technological knowledge and access to skilled labour among the SC/ST or Women entrepreneurs creates a gap in the further growth of their business. Bridging these gaps is essential for the success of the scheme.
What is Start-up India
Prime Minister Narendra Modi proclaimed the Start-up India campaign in 2016 to boost entrepreneurship in India. This scheme is an initiative by the Government of India that offers financing and handholding support to Startup entities for growth and expansion. It also looks upon the promotion of Startups, wealth creation and employment generation.
About the Scheme
The broad scope of Start-up India’s programs is outlined in the Action Plan and is managed by a dedicated Start-up India team which reports to the Department for Promotion of Industry and Internal Trade (DPIIT). The 19-point Action Plan works on the following forms of support for Startups and more. Some of them are:
- Enhanced infrastructure including incubation centres
- Easier IPR facilitation, including easier patent filing
- A better regulatory environment including tax benefits, easier compliance, improved of setting up a company, faster exit mechanisms, etc
- An economic stimulus in the form a Rs 10,000 crore Fund of Funds managed by SIDBI, with the goal of increasing funding opportunities
- A toll-free helpline and quick email email query resolution for startups.
Aim of the Scheme
Start-up India initiative aims to create an ecosystem that supports entrepreneurs and startups and to drive economic growth and employment. It also aims to catalyse startup culture and build a strong and inclusive ecosystem for innovation and entrepreneurship in India.
Benefits of Start-up India Registration
- Funding by banks under Government of India
- Participation in tenders introduced by Government or PSUs
- Tax exemption – Under 80 IAC and U/s 56 relief for Angel Tax Relief
- Participation under Government schemes and Startup Grand Challenges
- Easy closure, if needed – Under 90 days under insolvency and bankruptcy code 2016.
Eligibility for Companies to get Startup Recognition
As per the Startup Action Plan, the following conditions must be fulfilled in order to be eligible as Startup:
- To be registered as a private limited company, registered partnership firm or limited liability partnership.
- Has an annual turnover not exceeding Rs 100 crore for any of the financial years since incorporation/registration.
- Has not yet completed a period of 10 years from the date of incorporation/registration.
- It is not formed by splitting up or reconstructing a business already in existence.
- Applicants must be a minimum of 18 years of age and a maximum of up to 65 years.
- Applicants should not have defaulted with any financial institution in the past.
Documents Required for Start-up India Registration Certificate
- Duly filled application form with required details, such as Email ID and mobile number
- Passport-size photograph of the directors.
- Company details that include office address, nature of business, engaged in industry, sector, etc
- Certificate of Incorporation/Registration Certificate and PAN Card.
- Details of Directors and Partners such as name, Photo ID, Gender, Address, etc
- Patents and Trademark details, if any.
Also Read: Business Loan Tax Benefits
Steps for Start-up India Registration
Step 1: Incorporation of your Business : The applicant needs to incorporate his/her business as a Limited Liability Partnership, Private Limited Company or Partnership firm. The applicant further needs to follow the basic tasks for registration that include obtaining the company’s PAN, Certificate of Incorporation or Certificate of partnership registration.
Step 2: Register with Start-up India: To register as a Startup, the applicant needs to visit the official website of Startup India and fill in the application form online followed by all the required business details and finally uploading certain documents.
Step 3: Get DPIIT Recognition: After getting registered on the Start-up India website is to avail the DPIIT Recognition. For getting DPIIT recognition, log in with your registered profile credentials on the Start-up India website and click on ‘Apply for DPIIT Recognition’ option under the ‘Recognition’ tab.
On the next page, click on ‘Apply Now’. It will redirect to the National Single Window System (NSWS) website. Companies and LLPs should register on the NSWS website, add form ‘Registration as a Startup’ and fill ‘Startup Recognition Form’ to get DPIIT recognition.
Step 4: Recognition Application: On the ‘Startup Recognition Form’, you need to fill in the details such as the entity details, full office address, authorised representative details, director details, information required, startup activities and self-certification. Click on the plus sign on the right-hand side of the form and enter each section of the form. After entering all the sections of the ‘Startup Recognition Form’, accept the terms and conditions and click on the ‘Submit’ button.
Step 5: Documents for Registration:
- Incorporation/Registration Certificate of your startup
- Authorisation letter of the authorised representative of the company, LLP or partnership firm
- Proof of concept like pitch deck/website link/video
- Patents and Trademark details, if any
- List of awards or certificates of recognition, if any
- PAN Number
Step 6: Recognition Number: Once the applicant has self-certified the above-mentioned conditions and all the documents are verified by the concerned authority, a certificate of recognition will be issued. Applicants must ensure that all the authentic and valid documents shall be uploaded.
Once the applicant gets the recognition number, he/she can apply for trademarks, patents and design registration by approaching any of the facilitators issued by the Government of India.
What factors are considered by the Investors to invest in Startups?
- Scalability of a company
- Dependable and efficient team
- Complete business plan along with vision
- Risk-taking capabilities
- Value of goods and services to be sold
- Market size and nature of business
Register with OneNDF for your Dream Start-up
Now that you know how beneficial this scheme is, it must encourage you to take up on your dream business project, and what’s more, our experts at OneNDF will be on board to help you understand the distinctions of both the schemes and register for it in a streamlined and hassle-free manner. So, let us take care of the paperwork, Your Startups dreams are just around the corner!
FAQs
A Term Loan is a type of loan where a fixed amount of money is borrowed from a financial institution for a specified period, typically ranging from 1 to 10 years.
Working Capital is a financial metric that is the difference between a company’s current and current liabilities. As a financial metric, working capital helps plan for future needs and ensure the company has enough cash and cash equivalents to meet short-term challenges, such as unpaid taxes and short-term debt.
Any SC/ST or woman entrepreneur who wants to set up a Greenfield enterprise in manufacturing, services, trading or agri-allied activities can apply for a loan under the Stand-up India scheme. The enterprise should be a new one and not an existing one.
The Stand-up India Scheme involves providing financial assistance ranging from Rs 10 lakh to Rs 1 crore to the individuals from SC/ST communities or women to set up Greenfield Enterprise.
The nature of loans under the Start-up India scheme is a composite loan that includes a term loan and working capital.
The purpose of the loan in this scheme is to provide financial assistance to entrepreneurs to set up a business or to help startups come to a level where they can raise investments or loans from other sources.
Skill Upgradation & Quality Improvement and Mahala Coir Yojana (MCY) and Trade-Related Entrepreneurship Assistance and Development (TREAD) are some of the subsidy schemes for women entrepreneurs.
The loan is repayable in 7 years with a maximum moratorium period of 18 months.
A Start-up may apply for Tax exemption under Section 80 IAC of the Income Tax Act. Post getting clearance for Tax exemption, the Startup can avail tax holiday for 3 consecutive financial years out of its first ten years since incorporation.
The Startup registration cost depends on the legal entity and share capital:
- OPC Registration Service Cost: ₹22,418*
- LLP Registration Service Cost: ₹23,103*
- Private Limited Company Registration service cost: ₹22,968*
- Partnership Firm Registration Cost: ₹11,798*
*Prices above shown may vary
A Startup certificate in India is valid for up to 10 years from the date of incorporation or registration. However, the certificate is only valid if the company’s turnover does not exceed Rs 100 crore in any financial year during this period.
Yes, an entity without a PAN can be registered as a Startup. However, it is advised that a valid PAN of the entity is provided at the time of registration.