PM Mudra Loan For Business: Our Prime Minister is a leader with a truly big heart. He always thinks about how people can earn their livelihood. Among his many intiativs, he has given special importance to small and low investment business. To encourage unemployed youth to start business with small investments. He launched the Prime Minister Mudra Business Loan, which provides the necessary capital for small enterprises through Banks. PM Mudra Loan was started on April 8, 2015.
For small business owners, taking loans from corporate company often facing very high interest rates with shorter repayment periods. The launch such of this loan, those could not start low investment business before are now able to take initiatives, small enterprises and reducing unemployment. Small scale business will be able to grow and imporve their tiny business.
Especially in the field of agriculture, there will be enough progress. There’s no shortage of small business in our country. People are starting small business to become self employer. To overcome their family’s financial challenges. From roadside tea stalls to small computer shops, everyone want eagerly to get a loan. This loan is extremely important for various non-corporate and non agricultural business and since the loan amount are smal, repayment becomes much easier for them.
The Main Goal of the Mudra Loan Business
Small and Medium Business: Small business or micro businesses such as bakeries, school stationary shops, beauty parlors, paper bag production, leather belt making, toy manufacturing and various handicrafts. Additionaly, small workships for radio, TV, refrigerator and motorcycle repairs, as well as welding are considerd highly important business. The Govt. is providing numerous loans to help the owners of these business sustain their business. It is important to remember that these small and medium business employ a huge range of people, creating jobs and their impact on employment is quite significant compared to larger industries. These business also make a reamrkable contribution to the country’s GDP.
Swa-Nirbhar Bharat: The main goal of a Swa-Nirbhar Bharat is to create global demand for locally made products from the country’s small business. To acheive this,the Govt. Mudra Loan initiative aims to boost local production and bring businessmen into the digital space.
Create Karmasansthan: Employment opportunities can arise in various places. Govt. or Private organizations,NGOs or small business and business workshop. When production increases in these sectors, it will create employment, giving many unemployed youth the opportunity to earn a livelihood through work.
Three Stages of Mudra Business Loan
Sishu Loan: Sishu Loan refers to businesses and small cottage business. Where a small loan of around ₹50,000 can be obtained. To take this Sishu Loan, you can pledge your business as collateral and get the loan from the Bank. This allows you to easily grow your business without needing any guarantor.
Kishor Loan: Under this business loan, you can borrow anywhere from ₹50,000 up to ₹5 lakhs. Suppose you have started a business, but you began it with borrowed money and your lender expects repayment. You can repay that money by taking a Kishor Business Loan from the Bank. This way, your business will run smoothly and your lender would not have any objections.
Tarun Loan: Suppose your business grows bigger, you can then take this loan, allowing you to get a Mudra Business Loan ranging from ₹5 Lakh to ₹10 lakh. With this loan, if you have hired employees for your business, you can pay their monthly salaries and cover many other necessary expenses.
Who Can Apply for a Mudra Business Loan
Small businessman or owners of medium-sized businessman can easily avail this Mudra Business Loan with no need for a gurantor, the Govt. itself acts as the gurrantor.
For new businesses, some new rules have been introduced, Mudra Business Loans have now been increased from ₹10 lakh up to ₹20 lakhs. Earlier, collateral was required, but under the new rules, no collateral is needed. There are no processing fees and no foreclosure charges either. Forclosure means that when you take a loan, you have to pledge some collateral. If you fail to pay the loan, the pledged item could be sold to recover the money. That will no longer be required.
Those who own small or medium business can apply for this loan. Similarly, owners of trade business that is with a valid trade license can also avail this Mudra business loan.
The age limit to apply is between 18 to 65 years.
The applicant should not have any defaulted loans in any bank, that is they must not have taken a loan before that remains unpaid or unsettled.
Bank will not consider such business owners eligible for a loan under any circumstances.
The business owner must always have a good credit history.
And one thing to keep in mind, when you start a business, whether small or large, you have your business idea ready or perhaps you have rented a space for it. For those places, the rental agreement and for larger projects, the project layout, must be submitted to the bank.
Which Small and Medium Business Can Avail This Loan?
Small manufacturing units that use raw materials and various tools to produce products, increase production and drive business growth. Small shops or trade business where goods are bought and sold to earn income.
Providing various services such as haircuts at salons, motorcycle repairs, mobile phone servicing, e-rickshaw manufacturing amd more. And those who provide invisible services like, digital services, banking and healthcare where, no physical pfoduct is made, yet their importance to the country is immense.
How to Apply Online and Offline?
Offline Methods
- You need to visit a Govt. or Private Bank in your area, such as SBI, HDFC, AXIS Bank etc.
- NBFCs, or Non-Banking Financial companies, operate similarly to Banks they handle business transactions, provide small lons, make investments and offer insurance and other financial services. The law for these companies was established in 1956 and has been updated up to 2013.
- You need to collect the application form for the business related loan you wish to apply for.
- Whether you run your business from home or from a shop, you need to have all the necessary documents ready to provide to the Bank whenever requested.
- If the Bank Manager believes you are the right person for the business and your documents are in order, your loan will be approved meaning you will received the funds once it is sanctioned.
Now Online Methods
- You need to apply through the Udyami Mitra Portal.
- You need to give your name, mobile number and detailed information about the business you wish to start.
- You need to scan and upload all your business related documents (KYC, PAN/AADHAR CARD) that you have.
- You should provide the name of a Bank in your area that you can visit regularly.
- Then, once you receive a reference number, keep it safely with you.
Business Mudra Loan: Interest Rates and Repayment Schedule
Compare interest rates across different Banks-
| Bank | Interest Rate (Approx) | Loan Limit | Special Features |
| SBI | 8% – 12% | ₹5 lakh to ₹10 lakhs | Easily accessible with a large number of brancehs |
| PNB | 9.40% – 10.40% | ₹5 lakh to ₹10 lakhs | There is no Processing Fees |
| BOB | 8.15% – 12% | ₹5 lakh to ₹10 lakhs | Approval within 15 minutes through a digital process. |
| Canara Bank | 9.95% – 10.95% | ₹5 lakh to ₹10 lakhs | Get opportunities for women, with loans up to ₹20 lakh without any collateral. |
| HDFC Bank | 9.99% – 12.5% | ₹5 lakh to ₹10 lakhs | Special online benefits and faster processing for the non-agricultural sector. |
| ICICI Bank | 9.96% – 28% | ₹5 lakh to ₹10 lakhs | No collateral is required, making it easy to obtain the loan. |
| AXIS Bank | 8.60% – 11.15% 11.15% – 20% | ₹5 lakh to ₹10 lakhs | It will be much easier for small businesses. |
Repaying Loans at SBI Bank – 5 to 7 years
PNB Bank – 5 to 7 years
Repaying Loans at BOB (Bank of Baroda) – 5 to 7 years
Canara Bank – 5 years
HDFC Bank – Not fixed time
ICICI Bank – Not fixed time
AXIS Bank – It depends on the loan amount you take and the applicable interest rate.
Benefits of the MUDRA Loan for Small Businesses
- You do not need to provide any mortgage.
- The loan processing is quick and hassle-free.
- Easily Approval
- A self-reliant business brings endless joy.
Must Know Tips and Precautions Before Taking a MUDRA Business Loan
- Always go to a Govt. approved Bank or apply only via the official Govt. Portal.
- Keep all your business documents ready before applying for a loan.
- Pay your instalment on time. So, you can enjoy trouble-free loans later.
If you are planning to start a business or want to expand your existing business, visit your nearest bank and talk to the manager about the Pradhan Mantri MUDRA Business Loan. Once you get this loan, it is advantages will keep benefiting you time and again. If you face any problems regarding the loan, feel free to send a message. Make your small business and grow it digitally.
Entrepreneurs can apply online or offline and enjoy secure loan benefits.
