So, you have a business idea that you think is brilliant, partially because you have a knack for it and partly because you know you can see it through to make it a success. But you should know that going from idea to execution requires a lot of hard work, and there is a lot you need to understand, especially in terms of finances. The Reserve Bank of India (RBI), in a pamphlet aid for entrepreneurs released in 2013, says the best way to get capital for your small business is by getting a small business loan from a bank you trust.The good news is, the government has also set up multiple schemes through which you can access small business loans in order to help the growth of micro, small and medium enterprises (MSMEs) in the country. So, if you dont want to get a loan through a bank, you can also check the eligibility criteria for these schemes and apply for the same. Now, if youre wondering about what small business loans are and how to get one to set up your business, read on.What Are Small Business Loans?A small business loan, also known as a commercial loan, is a type of loan that can be used to finance urgent business needs, from the foundation to expansion. Depending on the amount you need, the type of loan you want, and your relationship with the lender, the loans can be secured with or without a collateral.There are many benefits to getting a small business loan. The primary one is that these loans get approved faster even though less documentation is required. The best part is, if you require a small amount of loan, you dont need to put up any assets or properties as collaterals. Even in banks, the criteria for the eligibility for these small business loans arent that difficult to meet, precisely because promoting the growth of MSMEs is something that our economy is doing actively, especially in the wake of the pandemic.Why Are These Loans Offered?Now you might wonder why the government would be interested in financing small amounts needed by small businesses. Its simple. MSMEs might be small businesses, but their cumulative impact on the economy is huge. Economists understand that an economy which supports MSMEs can deal with a plethora of issues, ranging from unemployment and poverty to income inequality. The MSME sector, especially in developing nations, can provide jobs and opportunities to prosper to millions of people by simply tapping into local or traditional talents and ingenuity.According to government data, the MSME sector in India is creates approximately 11.10 crore jobs in India, and contributes six to seven per cent of the manufacturing sector GDP and 25 per cent of the service sector GDP. With around 40 million registered and unregistered MSMEs in the country, this sector is proving to be quite the growth engine for the economywhich is why the government actively wants to support and increase their numbers. There are many unregistered MSMEs in the unorganised sector, which is another reason why the government wants to formalise them by bringing them into the financial circuit of the economy. A good way to do this is to provide capital to MSMEs.Small Business Loan Schemes By The Indian GovernmentAs mentioned before, there are many small business loan schemes which you can avail if you want to start or already run an MSME in India. The following are some government schemes you should be aware of.Pradhan Mantri MUDRA Yojana (PMMY)This scheme can be availed by non-corporate, non-agricultural MSMEs, and provides loans up to ₹10 lakh. The MUDRA scheme also defines three stages of developmentShishu, Kishore and Tarunto demarcate which level your MSME is at, and what kind of loan you need precisely. The interest rates on the loan varies according to the amount needed. The loans can be availed from commercial banks, regional rural banks, small finance banks, cooperative banks and mutual fund institutions. You can also access the loan by applying online to mudra.org.in.Credit Guarantee Fund Scheme for Micro and Small EnterprisesBoth new and existing MSMEs in the manufacturing and service sectors can apply for this type of loan. However, self-help groups and educational or training institutions cannot avail this loan. The scheme provides ₹200 lakhs worth of fund-based and non-fund-based (letters of credit or bank guarantees) loans. The best part is, these are term loans which can often be extended without any collaterals or third-party guarantees. Further, this scheme gives preference to women entrepreneurs, and is offered by scheduled commercial banks and some regional or rural banks. For more, go to cgtmse.in.National Small Industries Corporation Subsidy (NSIC)All medium and small enterprises with an Udyog Aadhar Memorandum (UAM) are eligible for a loan of up to ₹5 lakh under the Single Point Registration Scheme of the NSIC. These loans are in the form of fund-based and non-fund-based (letters of credit or bank guarantees) credit facilities. This loan can be availed from nationalised and private sector banks. For more, you can head to nsicspronline.com.Credit Linked Capital Subsidy Scheme for Technology UpgradationAll micro and small enterprises with a valid UAM number can avail this scheme, which provides a capital subsidy of 15 per cent on institutional finance of up to ₹15 lakh for approved machinery or improved technology. This scheme is clearly appropriate for MSEs that require machinery for function or expansion. The scheme can be accessed through 12 nodal banks or agencies, including SIDBI and NABARD. To avail these loans, the SME has to upload a subsidy claim application through their primary lending institutions, which can be the bank that first financed your seed capital.SIDBI Make In India Soft Loan Fund For MSMEs (SMILE)All MSMEs with a valid UAM number can access loans worth ₹25 lakh at least through this scheme. SIDBI, a government organisation, backs this loan, and it can be availed by going to sidbi.in. The loan is basically a soft loan in the form of quasi-equity and a term loan, with relatively flexible terms. Preferences are given to MSMEs under the 25 sectors highlighted by the governments Make In India programme, but other proposals can also be considered. Loans taken under this scheme, however, cannot be used for repayment of other loans.