🌱 Udyam Desk
Collateral-Free Business Loans 2026: All Government Schemes and Bank Routes in One Place
Government routes to a business loan without collateral or guarantor — a comparison of MUDRA, CGTMSE, Vishwakarma, Bhabishyat Credit Card and Stand-Up India, with eligibility and which scheme suits whom — complete guide.
“I have no land or house to pledge as collateral, so I won’t get a business loan” — this assumption no longer holds today. Multiple schemes of the central and state governments give small business loans without collateral or a guarantor. Which scheme is for whom, up to how much, and on what conditions — all in one place.
Comparison of all schemes — in one table
| Scheme | Loan limit | Collateral | Special benefit | Who it is for |
|---|---|---|---|---|
| MUDRA (PM MUDRA) | ₹50 thousand–₹20 lakh* | None | 4 categories, all banks | Any non-farm small business |
| PM Vishwakarma | ₹3 lakh | None | ₹15 thousand toolkit + stipend, 5% interest | 18 traditional craft trades |
| CGTMSE guarantee | Up to ₹5 crore | None (guarantee cover) | Government guarantee to the bank, so loans are easier | MSMEs registered under Udyam |
| Bhabishyat Credit Card (WB) | ₹5 lakh | None (state guarantor) | ~4% interest + 10% margin money | Entrepreneurs in West Bengal |
| Karma Sathi (WB) | ₹2 lakh | None | 15% subsidy (up to ₹25 thousand) | Unemployed youth of the state |
| PMEGP | ₹50 lakh (manufacturing) | Own 5–10% share required | 15–35% subsidy | New micro units |
| Stand-Up India | ₹10 lakh–₹1 crore | Depends on project | Bank loan for large projects | SC/ST and women entrepreneurs |
*The Tarun Plus category (₹10–20 lakh) is only for entrepreneurs who have successfully repaid a previous Tarun loan.
3 questions for choosing the right scheme
- How much money do you need? — ₹50 thousand–₹5 lakh → MUDRA/Bhabishyat Card; below ₹2 lakh in the state, Karma Sathi; above ₹10 lakh → PMEGP or Stand-Up India
- Is your trade a craft (one of the 18 listed)? — If yes, Vishwakarma is the most rewarding (toolkit + 5% interest)
- Centre or state? — No two similar subsidies on one project; but across different projects (e.g., MUDRA and later the Bhabishyat Card) it is possible
Preparation before applying — the thing that decides whether you get the loan
- A one-page project report — the business, market, costs, income, EMI calculations
- Udyam registration — free, and the first condition of almost every scheme
- Keep your bank account active — regular transactions are the best proof of repayment capacity
- Check your CIBIL report — clear any defaults first; if you have no score, start with a small loan
Where to apply
- The bank branch where you hold your account — the easiest start
- jansamarth.in — the government’s loan-discovery portal; it shows matching schemes and banks based on your needs
- District MSME office (state schemes) and DIC (PMEGP)
Related guides: MUDRA Loan, PMEGP, PM Vishwakarma, Bhabishyat Credit Card and the Udyam Portal.
❓ Frequently asked questions
Can you really get a business loan without collateral?
Yes. MUDRA loans, PM Vishwakarma loans, CGTMSE-guaranteed loans and West Bengal's Bhabishyat Credit Card — none of these require asset collateral. The conditions are that the project must be realistic and you must demonstrate repayment capacity.
How do I figure out which scheme is right for me?
Look at the size of the project — up to ₹5 lakh, MUDRA; if you practise a listed craft, Vishwakarma; ₹2–5 lakh in West Bengal, the Bhabishyat Card; for bigger projects (up to ₹50 lakh), PMEGP subsidy; and for large projects by SC/ST and women entrepreneurs, Stand-Up India.
What should I do if my CIBIL score is low?
Start with a MUDRA Shishu category loan or Vishwakarma — in these, the emphasis is more on the project. Build your score by repaying a small loan on time, then apply for a bigger loan.