How to Raise Funds for Startup Business in India:
A Complete 2026 Guide
Discover the best government schemes, grants, and funding options for Indian startups in 2026. Learn eligibility, documents, and how to secure capital for your business growth.
What is Startup Funding?
Startup funding refers to the capital raised by early-stage businesses to launch, scale, or sustain operations. In India, startups can access funds through government schemes, venture capital, angel investors, bank loans, and grants. With the Indian startup ecosystem valued at over $350 billion in 2026, securing the right funding is critical for growth and innovation.
The Indian government has launched multiple initiatives to support startups, including the Startup India program, which offers tax benefits, funding support, and easier compliance. Additionally, schemes like the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) and the Fund of Funds for Startups (FFS) provide financial backing with minimal collateral.
Raising funds is not just about money—it’s about validating your business model, gaining mentorship, and accessing networks. Whether you’re a tech startup, a social enterprise, or a manufacturing MSME, understanding the funding landscape is the first step toward success.
This guide covers the top funding options available in 2026, eligibility criteria, required documents, and how Info Tree Services can simplify the process for you.
Why Startup Funding Matters
Startup funding is the backbone of business growth, enabling innovation, hiring, and market expansion.
- Access to capital accelerates product development and market entry.
- Government schemes offer low-interest loans, grants, and tax exemptions.
- Funding validates your business model and attracts investors.
- Startups with funding are 3x more likely to scale successfully.
- Schemes like Startup India provide mentorship and networking opportunities.
- Collateral-free loans under CGTMSE reduce financial risk for founders.
Types of Startup Funding
Government Grants & Subsidies
Government grants are non-repayable funds provided to startups for innovation, R&D, and social impact. Schemes like the Atal Innovation Mission (AIM) and Biotechnology Ignition Grant (BIG) offer grants up to ₹50 lakh for eligible startups. These funds are ideal for early-stage businesses with high-growth potential but limited revenue.
Bank Loans & Credit Guarantee Schemes
Banks and financial institutions offer loans under government-backed schemes like CGTMSE, which provides collateral-free credit up to ₹5 crore. The Pradhan Mantri Mudra Yojana (PMMY) offers loans up to ₹10 lakh for micro-enterprises. These loans are suitable for startups with a clear revenue model and repayment capacity.
Venture Capital & Angel Investors
Venture capital (VC) and angel investors provide equity-based funding in exchange for ownership stakes. India’s VC ecosystem is booming, with funds like Sequoia Capital, Accel Partners, and Indian Angel Network actively investing in startups. This option is best for high-growth startups with scalable business models.
Crowdfunding & Incubators
Crowdfunding platforms like Ketto and Wishberry allow startups to raise small amounts from a large number of people. Incubators like T-Hub and IIM Ahmedabad’s CIIE provide seed funding, mentorship, and workspace. These options are ideal for startups in niche markets or social enterprises.
Top Government Schemes for Startups in 2026
Startup India Seed Fund Scheme (SISFS)
- •Provides seed funding up to ₹50 lakh per startup.
- •Supports proof-of-concept, prototype development, and product trials.
- •Eligible startups must be recognized by DPIIT and less than 2 years old.
- •No collateral or equity dilution required.
Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE)
- •Offers collateral-free loans up to ₹5 crore for startups and MSMEs.
- •Guarantee cover up to 85% of the loan amount.
- •Eligible businesses must be registered under Udyam or Startup India.
- •Reduces financial risk for lenders and borrowers.
Pradhan Mantri Mudra Yojana (PMMY)
- •Provides loans up to ₹10 lakh under three categories: Shishu (₹50,000), Kishor (₹5 lakh), and Tarun (₹10 lakh).
- •No collateral required for loans up to ₹10 lakh.
- •Eligible for micro-enterprises, startups, and small businesses.
- •Loans can be used for working capital, equipment purchase, or expansion.
Fund of Funds for Startups (FFS)
- •Managed by SIDBI, this scheme invests in SEBI-registered Alternative Investment Funds (AIFs).
- •AIFs then invest in startups, providing equity-based funding.
- •Startups must be recognized by DPIIT and less than 10 years old.
- •No direct application—startups must approach AIFs for funding.
Eligibility Criteria for Startup Funding
Individual / Startup
- •Must be a registered business entity (Private Limited, LLP, or Partnership).
- •Startup must be recognized by DPIIT (Department for Promotion of Industry and Internal Trade).
- •Business should be less than 10 years old (5 years for some schemes).
- •Annual turnover should not exceed ₹100 crore in any financial year.
MSME / Organisation
- •Must be registered under Udyam or MSME Act.
- •Business should be engaged in manufacturing, services, or trading.
- •For bank loans, a viable business plan and repayment capacity are required.
- •For grants, startups must demonstrate innovation or social impact.
Documents Required for Funding Applications
Standard documents required for most startup funding applications:
How Info Tree Services Helps You Secure Funding
Info Tree Services provides end-to-end support for startup funding applications, ensuring you get the right scheme at the right time.
- Identify the best funding scheme based on your business stage and sector.
- Prepare Detailed Project Reports (DPRs) and financial projections.
- Assist with DPIIT recognition and Udyam/MSME registration.
- End-to-end application support, including documentation and submission.
- Liaison with banks, government agencies, and investors for faster approvals.
Common Myths About Startup Funding
Who Can Apply for Startup Funding?
- Early-stage startups recognized by DPIIT.
- MSMEs registered under Udyam or MSME Act.
- Social enterprises and NGOs with innovative solutions.
- Tech startups in AI, biotech, fintech, and clean energy.
- Manufacturing and service-based businesses with scalable models.
- Women entrepreneurs and SC/ST/OBC founders (special schemes available).
Complete Documents Checklist for Startup Funding
Use this checklist before submitting your funding application:
- •Aadhaar card of founders/directors
- •PAN card of founders/directors
- •Passport-sized photographs
- •Certificate of Incorporation (for Private Limited/LLP)
- •Partnership Deed (for Partnership firms)
- •Udyam/MSME registration certificate
- •GST registration certificate
- •Detailed Project Report (DPR) with financial projections
- •Business plan with market analysis
- •Proof of concept or prototype (if applicable)
- •Bank account statements (6-12 months)
- •Audited financial statements (if applicable)
- •Cash flow projections for 3-5 years
- •Income tax returns (last 2 years)
- •DPIIT recognition certificate (for Startup India schemes)
- •Patent or trademark certificates (if applicable)
- •Lease agreement or property documents (for collateral-based loans)
- •Aadhaar card of founders/directors
- •PAN card of founders/directors
- •Passport-sized photographs
- •Certificate of Incorporation (for Private Limited/LLP)
- •Partnership Deed (for Partnership firms)
- •Udyam/MSME registration certificate
- •GST registration certificate
- •Detailed Project Report (DPR) with financial projections
- •Business plan with market analysis
- •Proof of concept or prototype (if applicable)
- •Bank account statements (6-12 months)
- •Audited financial statements (if applicable)
- •Cash flow projections for 3-5 years
- •Income tax returns (last 2 years)
- •DPIIT recognition certificate (for Startup India schemes)
- •Patent or trademark certificates (if applicable)
- •Lease agreement or property documents (for collateral-based loans)
How Info Tree Fits Into Your Funding Journey
From eligibility check to disbursement—Info Tree handles every step of your funding journey:
- Free eligibility assessment and scheme mapping for your startup.
- DPR preparation and financial projections tailored to your business.
- Assistance with DPIIT recognition and Udyam/MSME registration.
- Application filing and follow-up with banks/government agencies.
- Post-approval support, including compliance and disbursement tracking.
Conclusion: Secure Your Startup Funding Today
Startup funding is within reach for every entrepreneur in India.
- Government schemes offer grants, loans, and equity funding with minimal collateral.
- Eligibility is broader than you think—early-stage startups can apply too.
- The right documentation and expert guidance can fast-track your approval.
Who should act and why?
- If you’re a startup founder struggling to raise capital, now is the time to explore government schemes.
- If you’re an MSME looking to scale, collateral-free loans can fuel your growth.
- If you’re a social entrepreneur, grants can help you make a bigger impact.
How Info Tree can help you get started:
- Book a free consultation to assess your funding eligibility.
- Get end-to-end support for DPR preparation and application filing.
- We stay with you until the funds hit your account—no hidden fees, no delays.