How to Get a Mudra Loan for a Small Business in the Best Way
The Central Government’s flagship programme, the Pradhan Mantri Mudra Yojana, was introduced on April 8, 2015, and it allows non-corporate, small or microenterprises to obtain loans up to Rs. 10 lakh without putting up any security. The credits are offered as three distinct products called “Shishu,” “Kishore,” and “Tarun” and are made accessible through Mudra Loan under the PMMY plan.
According to an official study, 42.5 million applicants received loans under this programme up until 2019, and 20.6% of recipients used the money to open a new business while the remainder recipients expanded their current operations. The beneficiaries must obtain the cash through associated NBFCs since Mudra is a refinancing company and does not directly provide credit.
Financing through Mudra
Those who qualify for such small business loans and need less than Rs. 10 lakh to start micro-units would be given financing. Individual who are holding MSME Udyam Registration can easily get the loan amount under the government programmes and schemes. By keeping a solid credit score, a stellar repayment history, and not having had any loan defaults, applicants can boost their eligibility.
The qualifying requirements that company owners must adhere to before applying for a loan through Mudra are stated below.
Requirements for a Mudra loan
- The age of the potential candidate should fall between 18 and 65.
- The financing is available to individuals, business owners, MSMEs, producers, retailers, merchants, SMEs, and more.
- Since a business’s credit history is taken into account when applying for a loan, applicants should have a strong payback record to maintain a high credit score.
- People who fall under other categories, such as SC, ST, or OBC, may apply for the loan.
- The applicant’s credit record will be negatively impacted if they have ever missed a loan payment with any financial institution.
- The candidate must be an Indian citizen without a criminal history.
Identifying the Mudra category
Three main categories are used to distribute these loans:
- Shishu: Under this category, start-ups can get up to Rs. 50,000 to finance their full setup and other expenses.
- Kishore: Companies can receive up to Rs. 5 lakh in finance under this category. Business owners can submit an application under this area of the PMMY programme if they are searching for acceptable finance solutions with a reasonable interest rate to expand their small company. They can use this money to cover their working capital needs, buy cutting-edge equipment, and more.
- Tarun: This category of Mudra loans allows established businesses to borrow up to Rs. 10 lakh in order to cover a variety of operating costs.
Business owners can apply for Mudra loans under any of the aforementioned categories after determining how much operating capital their company need. If people do not meet the requirements for this programme, they can still hunt for business loans from reputable lenders like Bajaj Finserv.
Additionally, the NBFC delivers pre-approved loan offers to its current clients to streamline and ease the loan application procedure. These offers are made for a variety of financial goods, including commercial and personal loans. By providing crucial facts like your name and contact information, you may also check your pre-approved offer instantaneously.
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The Mudra Loan application process
Step 1: Before beginning the application procedure, candidates must have the necessary documentation on hand. The following documents are in the list:
- Identity documents include a PAN card, voter ID, and an Aadhaar card.
- Business records: Certificate of Business Registration
- Electricity bills, ration cards, phone bills, etc. are examples of address evidence.
- financial records Evidence of income and six-month account history
Step 2: For the Mudra loan, borrowers must go to the website of their selected lender, and
- Properly complete the application form.
- Before submitting, please sure to double-check your information.
Step 3: Following review of your application, the financial lender of your choice will get in touch with you.
- Here, the applicant must choose the amount they wish to receive.
- Pay the processing fee as well (if applicable).
A financial lender will authorise the money and transfer it right to the applicant’s account after properly validating the application. The money obtained through a Mudra loan can be used to meet any company needs. If you are not registered under MSME in order to get the loan amount then Meraprofit can help you in all types’ business law and finance related issues, as we the best business legal consultant so that you can concentrate on your business.