A not-so-recent government scheme gaining prominence is the Pradhan Mantri Mudra Yojana(PMMY). Launched in 2015, this scheme, under the purview of the Micro Units Development and Refinance Agency (MUDRA) lets lenders provide loans up to Rs. 10 lakhs to Micro, Small, and Medium Enterprises (MSMEs).
A noteworthy point here is that the lending institution does not require securities or collaterals to grant the MUDRA loan. Small manufacturing business owners, fruit and vegetable sellers, artisans, shopkeepers, and entrepreneurs practising agricultural activities can avail of this loan.
The three loan types under the PMMY scheme, named- Shishu, Kishore, and Tarun, allow entrepreneurs to borrow funds according to their business stages.
Furthermore, under PMMY, there are no minimum loan amount criteria, and the repayment tenure comes with flexible EMI options and a lower business loan interest rate. However, the funds must be utilised only towards the expansion and growth of the enterprise.
Additional Read: How to Get a Small Business Loan from the Government
MUDRA loans can be applied through online and offline methods. Here, we list both the options for your convenience:
- You need to download the application form from the official websites of lending institutions that are eligible to offer this business loan as directed by RBI.
- Next, fill the fields with details as needed in the application form.
- Submit the form with the required authentic documents for references.
- A representative from the lending institution contacts you to further the formalities for the application.
- Once your application is processed and verified with the supporting documents, the loan stands approved, and the lender starts disbursing funds.
Alternatively, borrowers can also apply online through the Udyamimitra portal at www.udyamimitra.in to avail for a PMMY business loan.
- Visit the nearest and desired MUDRA loan provider, either a commercial or private lending institution.
- Propose your business plan to the representatives in a self-written style.
- Submit the loan application form available at the lending institution after duly filling it.
- Along with the application, furnish the required documentation for verifying details.
- Complete all the formalities and procedures requested by the lender.
- Upon successful verification, the loan shall be approved, and the funds will be disbursed to the mentioned account within specified working days.
Documents required for MUDRA loan application
- Self-written Business Plan
- Duly filled Application form
- Two passport-sized photographs taken recently
- Proof of Identity- Passport, Voter’s ID, Driving License, Aadhar Card
- Proof of Age- Birth certificate, 10th or 12th pass certificate
- Proof of Address
- Proof of Business address and identity
- Six-months’ bank statement
- Documents in case of SC/ST applicants or other special categories
You will need a business loan calculator to determine the amount of finance needed for your business. Applicants can choose between the following three products under the umbrella of MUDRA:
- Sishu: For enterprises setting up their operations – the loan amount covers up to Rs. 50, 000.
- Kishore: For established enterprises seeking additional funding – the loan amount covers up to Rs. 5 lakhs.
- Tarun: For well-established businesses meeting specific business loan eligibility – the loan amount covers up to Rs. 10 lakhs.
Additional Read: Best Way to Get an MSME Business Loan
Are you looking for more options for business finance? If so, turn to Tata Capital – One of India’s most trusted lending institutions. We offer loans for small, medium and large businesses at attractive interest rates, flexible repayment terms and minimal paperwork.
Before reaching out to us, you can also check your potential EMI options using the business loan EMI calculatoron our website. To know more,get in touch with us today!