Mudra or ‘Micro Units Development and Refinance Agency’ loan was launched on 8th April 2015 under Pradhan Mantri MUDRA Yojana (PMMY) scheme. Usually, small businesses and startups are not given loans by banks due to a lack of collateral. This problem is solved by mudra loans given by cooperative banks and non-banking financial companies.
Understanding the Scheme:
As per the funding requirement, the mudra loans can be broadly classified as:
- Shishu: With a maximum loan amount of 50000*, it is given to those who are just starting with their business.
- Kishor: With the loan amount ranging from 50000 to 5 lakh*, it is given to already started but not well-established businesses.
- Tarun: It is given to already established businesses for expansion. The loan amount ranges from 5 to 10 lakh*.
Breaking the Business Terms:
- Business Loan: A loan can be taken for a business at any stage. It may be newly initiated, not yet established or for further growth purposes.
- EMI Calculator: It is essential to know the amount to be paid as EMI for the loan. Using the business loan EMI calculator and data such as loan amount, loan tenure and the interest rate you can quickly know the due amount on the business loan.
- Business Loan Interest Rate: Depending upon the type of business and the amount of loan the business rate may vary. It can also depend on the credit history of the applicant.
General Documents
- Identity Proof – Any government issued Photo id like Driving License, Voter ID Card, PAN card.
- Address Proof- Like recent telephone/electricity bill, tax receipt or bank statement.
- 2 Recent passport- size photos.
- Identity proof and address proof of the business establishment and its rental agreement if it is rented.
- For the loan amount above 2 lakh*, the audited balance sheets, and the projected balance sheet.
- In case applicable, some specific documents like clearance certificate, Small Scale Industry (SSI) registration, company memorandum, and Article of Association for a company, partnership deed for a partnership business and SC/ST documents.
- Guarantors and Promoters must submit assets statements, liabilities statements as well as the latest income tax return
- For the Primary properties, the copies of Title deeds or lease deeds must be submitted.
Specific Documents
Apart from the relevant application forms and general documents, the following documents are required:
A.) Vehicle Loan:
- Borrower’s passport size photos – 2 photos
- Income Proof
- Recent bank statement.
- Business Installment Loan:
- Proof for the establishment
- Ownership proof of house or residence.
- Proof of business continuity
- Trade references
- Proof of qualification
- Bank statements.
B.) Business Loans:
- Age proof
- Ownership proof of house or residence.
- Continuity of business proof
- Bank statement for the past 12 months
- Income tax return documents for the most recent 2 years.
How to Apply?
- Make sure you have all the necessary documents.
- Submit your application to a lender enrolled under the Mudra scheme like Small Finance Banks, MFIs, Commercial Banks, etc. You can also apply online at the portal http://www.udyamimitra.in/
- Submit the documents.
Under this scheme, the government has sanctioned 15.56 lakh* loans amounting to Rs 7.23 lakh* crore. More than 70% of the loan takers were women and more than 50% belong to individuals who are SC, ST, or OBC. Mudra Loan scheme is very beneficial for expanding business. Another way is to availing business loan. The gratuity limit has been increased from Rs 10 lakh to Rs 30 lakh*. It aims at growth and providing better financial support and livelihood of women, weaker and backward communities of our society.