If you are running a non-farming or a non-corporate organisation and looking to acquire financial assistance to make things move along swimmingly, a Mudra loan might just be your best possible bet. However, before you can even apply for a Mudra loan, you must first establish eligibility, across a wide range of parameters. Post eligibility check comes document procurement and once you have arranged all the relevant docs, depending on the type of mudra loan you are seeking, you can apply hassle-free through select banking service providers.
What is Mudra loan and how the same is segregated?
For the uninitiated, Mudra Loan or rather the PMMY flagship scheme aims at making affordable business loans available to small and micro-enterprises. The main aim of this financial backing is to ensure that these smaller and unrecognised setups can promptly enter the formal economic sector.
Coming to the commercials, as an eligible candidate or a business owner, you can acquire up to INR 10 lakh with a mudra loan. But then, Mudra Loan is further differentiated into three loan variants, depending on the nature of the business.
At first, we have the Shishu loan, targeting micro-units and characterized by the maximum lending limit of up to INR 50,000. Up next is the Kishore loan where the credit limit is capped at INR 5 lakh.
Finally, there is the Tarun loan with the maximum lending capacity of INR 10 lakh, and an extensive phase concerning documents and business status reporting.
Detailed guide to filling out 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 proceed. You need to fill in all the fields, but the tricky part comes when the associated documents are to be attached.
Once you have filled out the Pradhan Mantri mudra yojana application form, you need to supplement it with 2 passport-size images followed by the relevant identity and address proofs. Also, you need to attach the ‘Proof of Income’, going back by at least 6 months.
The Mudra loan documents list also includes tax returns, including IT and Sales Tax returns followed by audited balance statements for the past three years, project sheet extrapolated for at least two years, and the proof of Business Existence. For the last part, you must share ownership details, registration certificate, rental agreement, partnership deep, title deeds, lease deeds, and any other document that you might have handy to show the existence of the business.
Are there other aspects to cover?
Depending on the nature of the business loans, covered under the PMMY scheme, you might need to furnish some additional documents including the business continuity proof, trade references, and more. Also, if you are seeking rural credit or loan group for catering to a specific kind of establishment, you might even need to provide vintage proof and even 1-year worth of bank statements.
In conclusion
Applying for Mudra Loan isn’t as tricky as it might look to some. However, you should first establish eligibility before moving ahead with the application. Also, in case you fail to acquire financing under the PMMY scheme, you can even look for other, more accommodative business loan options, available with private and public financial institutions.