If you’re running a non-farm or non-corporate organization and looking to get some financial help to get things done, a Mudra loan might just be your best bet. However, before you can even apply for a Mudra loan, you must first establish eligibility, through a wide range of parameters. After the eligibility check comes the procurement of the documents and once you have organized all the relevant documents, depending on the type of mudra loan you are looking for, you can apply hassle-free with some banking service providers.
What is the Mudra loan and how is it separated?
For the uninitiated, Mudra Loan or rather the flagship program of PMMY aims to make affordable business loans available to small and micro businesses. The main objective of this financial support is to ensure that these smaller and unrecognized facilities can quickly enter the formal economic sector.
Coming to advertisements, as an eligible candidate or business owner, you can acquire up to 10 lakh INR with a mudra loan. But then, Mudra Loan is further differentiated into three loan variants, depending on the nature of the business.
First, we have the Shishu loan, targeting micro-units and characterized by a maximum loan limit of INR 50,000. Next comes the Kishore loan which has a credit limit capped at 5 lakh INR.
Finally, there is the Tarun loan with a maximum lending capacity of 10 lakh INR, and an extended phase concerning documents and reports on the state of the company.
Detailed guide to completing a Mudra loan application
If you want to apply for a Mudra loan, you must first connect with a relevant banking institution and get a form to continue. You have to fill in all the fields, but the trickiest part is when the associated documents have to be attached.
Once you have completed the Pradhan Mantri mudra yojana application form, you must complete it with 2 passport-size images followed by the corresponding proof of identity and address. In addition, you must attach the “proof of income”, dating from at least 6 months.
the List of Mudra loan documents also includes income tax returns, including computer and sales tax returns, followed by audited balance statements for the past three years, the project sheet extrapolated over at least two years, and proof of the existence of the business. For the last part, you need to share the property details, registration certificate, rental agreement, deep partnership, title deeds, rental deeds and any other documents you may have on hand to show the existence of the business.
Are there other aspects to cover?
Depending on the nature of the business loans covered by the PMMY scheme, you may be required to provide additional documentation including proof of business continuity, business references, etc. Moreover, if you are looking for a rural credit or group of loans for the restoration of a specific type of establishment, you may even need to provide proof of the period and even one year bank statements.
More accommodating business loan options available from private and public financial institutions. Photo courtesy of: Pixabay
In conclusion
Applying for a Mudra loan is not as difficult as it seems for some. However, you must first establish your eligibility before proceeding with the application. Additionally, if you are unable to secure financing under the PMMY scheme, you can even research other more accommodating business loan options available from private and public financial institutions.
