How to Get Pradhan Mantri Mudra Loan for Your Business

If you are running a small business then money is very important to run this business smoothly. To fulfil your business financial needs sometimes you need to take out a loan. The government is also serious about this problem of businesses and launched an initiative named Pradhan Mantri Mudra Yojana. Scheme. Under this scheme, the government provides loans to Small and Medium Enterprises, New businesses, and Startups. In this article, we will guide you about this scheme, scheme features, eligibility, application process, and more about it.

What is a Mudra Loan?

Pradhan Mantri Mudra Yojana is a supporting resource to help small businesses and new businesses with funding needs. This plan is run by Micro Units Development and Refinance Agency Limited and this organization works under SIDBI. This plan gives loans up to 10 lakh rupees to businesses that are not corporate, not farming, and MSMEs. In 2015, Pradhan Mantri Shri Narendra Modi started this plan to help business people and money access in the country.

Benefits of PM Mudra Loan 

• You do not need to provide any collateral asset and guarantor to take a loan.
• The Processing fees and interest rates are very low from other financial schemes.
• When you apply for this scheme then your loan repayment comes with flexible tenure options.
• This scheme is very useful to support small and micro enterprises with financial help.
• This scheme contributes to entrepreneurship and financial inclusion.

How many types of Mudra Loan are there?

Pradhan Mantri Mudra Loan is distributed into three kinds of different categories and these are decided according to business growth and financial needs of the businesses. These three categories are below.

1. Shishu Loan:

Under the Pradhan Mantri Mudra Loan, the Shishu scheme provides loans up to Rs 50,000 to those facing difficulty in launching their business in the starting phase. With this financial support, these businesses can stand up and move to the next step of growth. 

2. Kishore Loan:

In the Kishore scheme, businesses can take loans from Rs. 50,000 to  Rs. 5 Lakh. This loan is ideal for existing companies who wish to borrow more money to expand.

3. Tarun Loan:

This loan category allows companies to borrow funds between Rs 5 lakh and Rs 10 lakh based on their needs. This category is suitable for companies that are currently established and have a strong reputation in the industry but wish to expand. More investment may be required to build it.

Interest Rate of PM Mudra Loan

Pradhan Mantri Mudra loan is supported by the government of India and it is provided by multiple Banks, NBFCs, and other financial bodies. In this loan scheme interest rates are different from all financial organizations. Banks and NBFCs can decide the interest rates of this loan scheme according to their policy and it also depends on other factors like the amount of loan, repayment period, business creditworthiness, etc. Below are the details of common interest rates of three types of mudra loan schemes.  

1. Shishu Loan Interest Rate:

This loan is a starting option for financing for entrepreneurs who want to start their own businesses. The interest rate under this loan varies between 8% to 12% p.a. Some Banks and NBFCs cut the process fees and other costs from the loan form.

2. Kishore loan interest rate

Under the Kishore Loan Scheme financial institutes keep the ranges of interest rates between 10% to 14% annually. Some Banks and NBFCs reduce the process fees and other charges from the loan application.

3. Tarun Loan Interest Rate:

Under the Tarun Loan Scheme businesses can take big loan amounts up to 10 lakh rupees. The interest rate is between this loan category between 12% to 16% annually. 

Eligibility for Mudra Loan

The eligibility criteria to get (PMMY) loan are given below. 

1. Applicants who are applying for the PMMY loan their age should be above 18 years and have citizenship in India.

2. If the Borrowers are engaged in activities like non-corporate, non-agricultural SMEs in manufacturing, trading, and services-related sectors they are eligible to apply.

3. Your financial profile should be clear with a good CIBIL score.

4. Before applying for a loan you should have good knowledge to operate your business with proper future planning.

5. All necessary documents for loan application are there and valid.

Eligibility criteria for Shishu, Kishore, and Tarun Loan

1. Eligibility for Shishu Loan:

To get profit from this loan businessmen must have a good business strategy and a project report, as well as the ability to repay the loan.

2. Eligibility for Kishore Loan:

To take this loan you should provide a business plan and project report. If your business comes under the GST slab then you need to provide GST details. Bank account Details and Statements of 12 months of A/c are also important for eligibility. 

3. Eligibility for Tarun Loan:

People who want to apply for this loan have a big business in the market. You need to provide a business report and a proper plan. You should provide a 12-month Bank A/c Statement. ITR details of 2 years are also required for this choice.

Documents for Mudra Loan

If you are ready to apply then you need to prepare some documents. Below are the details of some basic required documents.

1. Identity Proof: Aadhar (UIDAI), PAN Details, Passport, Driving license

2. Present Address Proof: Aadhar (UIDAI), Voter EID, Passport, Electricity and Water Bill, Rent Agreement.

3. Business Activity Proof: GST Details, MSME ID, Company Registration Certificate, Trade License

4. Requirement of a business plan or project report.

5. Copy of 12 months bank statement

6. A copy of the ITR of the last two years is required

How to Apply for Pradhan Mantri Mudra Loan?

• Go to the bank or apply online on the Mudra website

• Choose Shishu, Kishor, or Tarun loan type

• Submit the loan form and documents and keep the receipt

• The bank will check your documents

• The bank will say yes or no to a loan based on your details

• If the bank says yes, you will get money in the account 

Conclusion

Pradhan Mantri Mudra Yojana Loan is a plan to support new businesses and previous businesses. Govt. provides financial support to companies. Under this funding scheme owners of a business can get many good benefits like low interest rates, collateral-free, easy repayment, and smooth form filling. If you also have your business and need money then you should get a loan from Pradhan Mantri Mudra Yojana.

FAQ

1. Who is eligible for a Mudra loan?

Ans - Any person who is running a small or micro-enterprise business, a non-corporate firm, and a non-agriculture industry is eligible to apply under the Mudra Scheme.

2. What is the interest of Rs 50000 on the Mudra Loan?

Ans - The interest rate determined on a loan of Rs 50000 under the Pradhan Mantri Mudra Yojana depends on many factors like the personal and business profile of the applicant, But generally the interest rate of a Mudra loan is 8% to 16% per annum.

Q.3 What is a 10 lakh loan in PM Modi?

Ans - Under the Pradhan Mantri Yojana, Rs 10 lakh means the amount that is provided as a loan to businesses with large potential. Loans up to Rs 10 lakh are given to businesses that come under the Tarun Loan category.

4. Who is not eligible for a Mudra Loan?

Ans - Businessmen belonging to corporate business, farmers, etc. category are not eligible for Mudra Loan but apart from this if the financial profile of any person is present as a defaulter or the complete documents related to the application process are not available then such applicants are also not eligible for Mudra Loan.

5. Can I get a Mudra Loan for personal use?

Ans - No, Mudra loan cannot be taken for personal use because this scheme has been started by the government to provide financial assistance to such businesses that are facing financial crisis.

Also read: Apply for Instant Personal Loans in Bangalore