The KSIDC Seed Funding Loan Scheme is designed to support early-stage innovative start-ups and ventures in Kerala by offering soft-loan financing to help them take off. The aim is to promote job-creation, innovation, and commercial viability of new business ideas.

Key Features & Benefits for Entrepreneurs

• Loan Amount: Up to ₹25 lakh, or up to 90% of the initial project cost, whichever is lower.

• Nature of Assistance: Soft loan (early stage). Treated more gently than standard term loans.

• Interest Rate: Around 6.50% (defined as the bank rate at time of sanction) for the seed loan.

• Repayment Period: Up to 3 years for the seed loan portion.

• Conversion Option: In many cases, the loan can be converted into equity in the company (subject to conditions) if the venture progresses.

• Growth Path: After successful product development/market-entry, the same venture may become eligible for scale-up funding under a separate KSIDC scheme (e.g., up to ~₹1 crore, 80% of project cost) for scaling operations.

Eligibility & What You Need

As an entrepreneur preparing to apply, you need to check and prepare the following:

• Stage of Venture: Ideally you are at the innovative idea / early‐product / start‐up stage with plan for commercialization.

• Company Structure: Venture may be a company (e.g., private limited) or entity that can receive loan/equity. The exact legal form should be clear.

• Business Plan / Project Report: A clear plan showing what the funds will be used for (development, prototyping, commercialization) is required.

• Promoter Credibility: Documents such as KYC, credit report of promoters, existing business track (if any) may be required.

• Conversion Clause: If you accept the seed funding, understand that KSIDC may require conversion of loan to equity within a defined period if the venture progresses.

What the Funds Can Be Used For

The seed funding is primarily aimed at early costs like:

• Product development, prototyping, commercialization efforts

• Research & development of innovative technology or business model

• Initial infrastructure or setup costs for a new venture (especially in tech/innovation sectors)

Because this is early stage, the focus is innovation, market entry, viability, not simply standard business expansion.

Why This Scheme Matters for You

• It gives you capital support at an early stage with concessional terms (soft loan) which many start-ups struggle to access.

• It helps you move from idea → prototype → market entry with reduced financial burden.

• It positions your venture for further growth and scale-up support (if successful) from KSIDC and ecosystem stakeholders.

• It signals credibility for your venture: receiving recognised support from KSIDC can help in attracting customers, partners, or further investment.

Important Considerations for Applicants

• This is not a general loan scheme for every business — it’s tailored for innovative start-ups with strong potential. Make sure your venture meets the innovation/viability requirement.

• The maximum amount (₹25 lakh) is a ceiling; actual sanctioned amount may be lower depending on project size and evaluation.

• Even though interest is concessional (~6.5%), repayment is still required and you should have a viable plan to generate revenue.

• Understand the conversion clause: If you do not convert the loan to equity (or meet conditions), you may be required to repay the loan with interest.

• Because it’s early stage, risk is higher: you’ll need to show promising potential, not just a business plan.

• Use this as a launch pad, not the entire funding strategy. Early funding must be supplemented by your own investment, revenue generation, or further funding rounds.