Planning to have a startup and looking for funds for the same? Are you an entrepreneur with restricted capital who wishes to expand his business in the near future? Or you are a person owning a small business with no strong financial support or monetary backup? Well then, mudra loan for startup might be the solution for your business and might as well help your startup reach greater heights in the future. And therefore, Coffeemug.ai is the best platform where you will find expert advice on how to get mudra loan and its eligibility.
Does government give any loan for new business?
The Indian government is one of the progressives in the world with respect to policy framing, providing loans and reliable fund schemes for startups in the country. Therefore, the startup loan from government helps the entrepreneurs with capital raising for their startups. Further, the central government loan scheme for new business has come up with “Pradhan Mantri Mudra Yojana” in the year 2015. Under this scheme, the government provides financial assistance or loans to small businesses or start ups through Micro Units Development and Refinance Agency or Mudra, a non-banking financial company (NBFC).
Pradhan Mantri MUDRA Yojana (PMMY)
The Prime Minister on April 8, 2015 introduced the startup yojana. This Modi loan scheme for startup business targets providing loans to the non-farm small or micro enterprises and non-corporates to a maximum amount of 10 lakhs. These loans are categorised as MUDRA Loans under PMMY and are provided by RRBs, Cooperative Banks, NBFCs, commercial banks, small finance banks and MFIs. The concerned person applying for loan can talk to any of the leading institutions that are mentioned above or can apply for loan through an online portal.
Types of Mudra Loans Under PMMY
- Shishu:
Shishu Mudra Loans offer a loan amount of Rs. 50,000. This type of loan is given to entrepreneurs who are at the starting stage of their business. The government aims at giving this type of Mudra Loan for nurturing the country’s ecosystem of establishing businesses.
- Kishore:
For a startup requiring capital beyond Rs.50000 as an initial investment amount or for expansion plans, the Pradhan Mantri Mudra Yojana offers you loans from Rs. 50,000 to Rs. 5 lakhs under the Kishore scheme.
- Tarun:
This type of Mudra Loan provides you a loan amount between Rs. 5 lakhs to Rs. 10 lakhs. Tarun Mudra Loans are opted by people at a more advanced stage resulting in the diversification and growth of the start up.
Who can apply?
Businesses that can apply for loan under PM yojana for startup loan include:
- People involved in producing and selling food items such as confectioners, food stalls, sweet stores, caterers etc.
- People in textile business including handloom, powerloom, traditional printing and embroidery work, zardozi, khadi, apparel design etc.
- People running small businesses such as gyms, beauty parlour, boutiques, tailoring stores, repair shops, medicine shops etc.
- Small traders and shopkeepers
- Agriculture related businesses such as poultry, livestock rearing, agro-industries, food processing, fisheries and different types of auxiliary services.
Process of availing loan under PMMY:
The complete process of getting a loan under start-up yojana is available on the official government website and on other official websites of NBFCs, MFIs and other supporting banks. Mudra Loan can be availed through the following steps:
- You will first have to visit the official website that is https://www.mudra.org.in/.
- Then download the application form and fill it with accurate details such as address, full name, number, KYC and other important details.
- Later, Id proofs, credibility document, previous loan records, a determined business plan, company’s balance sheet (for Kishor and Tarun Loan) and future growth plans (for Kishor and Tarun Loan) are a few other Mudra Loan documents that have to be submitted with the application form.
- Further, several other additional loan procedures stated by the bank need to be completed. (This step will differ from bank to bank).
- The concerned bank will then verify the submitted documents.
- Finally, after the verification of the documents, the bank will credit the loan amount to the borrower’s account.
Benefits of Mudra Loans for start up:
Mudra Loans come with several benefits for the borrower, few of which are mentioned below:
- To avail mudra schemes, the borrower need not involve third party security.
- The interest rate of Mudra loans is affordable for people from diverse backgrounds and different economic strata with only one objective of setting up their own business. Per month the interest rate will not exceed 1%.
- Withdrawal of promised amount is quite easy with the help of Mudra Loan Card. The borrower need not visit the bank physically for withdrawal.
Professional Loans from the Government:
Further, the Government of India has widened its loan criteria and has decided to provide loans for professionals such as Architects, Doctors, Chartered Accountants, etc. To get loan for professionals from government, professionals can refer to personalized credit offerings that will help them start or expand their practice.
Get loan guidance from coffeemug.ai
If you are running a small business or planning to initiate a new start up, then coffeemug.ai is an online portal that will guide you to get the best mudra loan. This portal offers you perfect guidance in regard to which mudra loan to opt for according to the business plan, meeting the eligibility criteria and how to go about applying for the loan.
FAQ
Q. Can I get Mudra loan for startup?
A. Startups and entrepreneurs can apply to banks, NBFCs, or MFIs for Mudra loans, select the category that best suits their needs, adheres to the terms and conditions, and get the funded money.
Q. Who is eligible for Mudra?
A. Anyone who owns or manages a small business is eligible to apply for a Mudra loan.
Q. Which bank is best for the Mudra loan?
A. Some of the best banks for Mudra loans are Oriental Bank of Commerce, ICICI Bank, Kotak Mahindra Bank, Standard Chartered Bank, Indian Bank, and more.
Q. How can I get a loan from the Modi scheme?
A. Commercial banks, RRBs, Small Finance Banks, MFIs, and NBFCs provide these loans. The borrower can go to any of the above-mentioned lending institutions or apply online at www.udyamimitra.in.
