How do You Apply for Mudra Loan to Finance
When it comes to financing your business idea, the options can be overwhelming. The Mudra loan scheme is aimed at providing financial assistance to micro and small business enterprises. So, if you’re looking to apply for a Mudra loan to finance your business venture, here’s what you need to know.
What are Mudra Loans?
Mudra loan is a loan offered to small businesses in India to finance their business ventures. The scheme was launched by the Indian government in 2015 with the aim to provide financial assistance to micro and small business enterprises, which often face difficulties in getting loans from traditional financial institutions.
Mudra loans are categorized into three types, namely Shishu, Kishor, and Tarun. Shishu is for businesses that need a loan of up to Rs. 50,000, Kishor for businesses that need a loan between Rs. 50,000 and Rs. 5 lakhs, and Tarun for businesses that need a loan between Rs. 5 lakhs and Rs. 10 lakhs.
Mudra Loan Eligibility
For mudra loan eligibility, a business must meet the following criteria:
- The business must be a sole proprietorship, partnership, LLP, or a private limited company.
- The business should have a clean credit history and should not have defaulted on any previous loans.
- The business should be in the manufacturing, trading, or services sector.
- The business should not have an annual turnover of more than Rs. 10 crores.
- The business should be registered under MSME (Micro, Small, and Medium Enterprises) or Udyog Aadhaar Memorandum (UAM).
Mudra Loan for Women
The Mudra loan scheme has special provisions for women entrepreneurs. Women entrepreneurs can apply for a Mudra loan under any of the three categories, namely Shishu, Kishor, and Tarun. Women entrepreneurs can also avail of a special discount on the interest rate of the loan.
The government of India has launched the Annapurna Scheme, a component of the Mudra loan scheme, to help women entrepreneurs set up food catering businesses. The scheme provides a loan of up to Rs. 50,000 to women entrepreneurs to set up their food catering businesses.
Mudra Loan Application Process
The application process for a Mudra loan is straightforward, and entrepreneurs can apply through any of the following methods:
1. Online Application through Udyami Mitra Portal
Entrepreneurs can fill out an online application form for a Mudra loan on the Udyami Mitra portal. The portal helps entrepreneurs through the entire application process and offers guidance on filling up the application form.
2. Loan Application through Mudra Partner Banks
Entrepreneurs can also apply for a Mudra loan through any of the partner banks such as SBI, PNB, Canara Bank, Bank of Baroda, etc. Entrepreneurs can approach these banks with their business plan and other documents required for the loan application.
Documents Required for Mudra Loan Application
The following documents are required for the Mudra loan application:
- Identity Proof: Aadhaar Card, Voter ID, Passport, Driving License, or PAN card.
- Address Proof: Aadhaar Card, Voter ID, Passport, or Driving License.
- Business Plan.
- Bank Statement for the last six months.
- Proof of Business Registration.
- Income Tax Returns for the last two years.
- Trade License.
Conclusion
The Mudra loan scheme is a boon for small business enterprises in India. It makes financing the business ventures of micro and small businesses a lot easier. The loan offers a range of benefits tailored to meet the financial needs of these businesses. Entrepreneurs can apply for a Mudra loan online or through any of the partner banks.
The eligibility criteria and documents required for the loan application are straightforward. Women entrepreneurs also have a special provision under the scheme, which makes it an attractive financing option for women entrepreneurs. With its simple application process and attractive terms, the Mudra loan scheme is a great financing option for small businesses looking to make their mark in the Indian market.
