Collateral Free Financial Schemes for Indian Start Ups - To be or Not to be ..?? - Part 1 - The Journey ..

You are an Indian in India. You don’t want a job. You are educated and have a dream about starting your own business. You  run the dream in your head over and over again and the more you think about it the better it looks . You wake up next morning and you get to work with high hopes and big dreams you start  with the resources at hand . At home or after taking a small rental you take the first few steps to make the dream into reality

 You  marshal your resources – some savings, parents. Indulgent friends and put together something. You start and before you can say halleluiah you are stretched. Back to parents and family, with a little difficulty some cash for a little leeway. Doesn’t last long. You soon realize that  new businesses are a glutton. Orders can get delayed, there are quality issues, you need to advertise (you can make the world’s best mousetrap, but its no good unless you can sell it). For 1st generation entrepreneurs with not so deep pockets you realize that the money  is the Wall.  Money  makes the world go round hits you with a very real thud.

So back to … you guessed it. This time the money comes attached with all sorts of advice ( good job, start small, takes time, don’t be impatient, something will come up ). Your brain is screaming - for crying out loud - from where??!!.

Now that the bug to do your own thing has got to you and there’s no going back. And by now your initial efforts are paying off - there are new orders. Only problem, being how to execute them? So friend of a friend whose name is Shylock offers money except for the rate of interest. It’s through the roof. What are your options. And then there is repayment. Are you working for yourself or Shylock. You realize that that’s a spiral you have to break .

And then a tech savvy friend suggests angel investors, VC funds etc. And you burn the midnight oil preparing a multitude of PPTs all trying to explain your dream which is the only steadfast thing keeping you going.

And then you realize these foreign funded organizations are looking for the next big thing in the aggregator, IOT , information space , FT or which ever direction the herd is running just then. The few interested in the nuts and bolt industry – manufacturing, retail marketing , other offline ventures want you to have a turnover which kind of puts you in a Catch 22 situation . It may take you a year or two to get there and the need of the hour is the support to get there. But their goal and realities are different and they then may be friends for  another day.

There is a thought though: All the big ecommerce guys are nothing without the nuts and bolts manufacturing guys .

Along comes this uncle who spends a lot of time reading the paper and listening to the news: why don’t you approach the bank. That’s when the story starts and you tell him , they turned you down when you said you had nothing to give as collateral.

No, No, No he says. The government has schemes, almost 50 schemes under which you can get a collateral free loan , you haven’t done your homework right or you are not making the effort in the right direction . Are you sure ? He asks . Sure I’m sure. Do you know anybody who has got it, No, I don’t know anybody personally , but it’s all there in black and white and in black again. So lighting that little ray of hope you thank him …Wow you are an angel, a real lifesaver.

So back to the research. Sure there are 50 or so collateral free schemes for start ups who are in a situation similar to ours, but many are sector specific. However there are enough and more which are sector agnostic to give multiple rays of sunshine. And so beautifully drafted too. Comforting and full of hope. Take the money and live your dream.

So you google- anybody got it, share your experience- NADA.

So the maximum search results point you to SIDBI and you suit up and Go – Conversation goes like - you have manufacturing Unit , that’s great , so how many machines do you have , So you are starting your own Pvt Label Sure, why not , Big smile. So I ask – how do we proceed ?. No, no not us , we are to small a team to take up such small cases , please go to your bank . You are banking with a Public sector bank and they are mandated to help you out , They can’t say no .  

So then with High hope you go back to your Bank and specifically tell them SIDBI sent you . Sorry we are not giving under this particular scheme just now because --- , Now a days its even funnier because they are actually using the negative publicity as an excuse not to give loans – so the answer has become – You are reading the news papers every day you know the situation of the Public Sector Banks, NPA is very High we cant give any loan right now , to which you respond - But your bank was not involved in the Scam then – Response – No No sorry we cant, NPA issues you see.

Then Back to SIDBI- they refused. Get it in writing. You must be kidding. Try another bank same answer. Shame them. Are you crazy- this is India, you won’t even be able to open another account in this country. And there is nothing in writing so WHO SAID NO.

Okay Apply to Stand Up Mitra its made for companies at your stage – You will definitely get a response from there . And that’s what you do . The Portal clearly states your application will be picked up by 3 Banks and then the process will go further. You complete the application and you wait for months and no response .

So where to go?!?

#indianstartups #CGTMSE #makeinindia #firstgenerationentrepreneur #makeinindialimbo #startuplimbo #collateralfreeisajoke

To be Cont. .......

The Start Up Struggler @thestartupgirl Shruti