How An Startup Can Avail Mudra Loan
India has the largest youth population in the world, and about 35% of the total population of our country belongs to this stratum of society. With the increasing youth population, the prospects of startups in India has leapt. Currently, India has the third-largest startup ecosystem, with about 1300 new startups coming last year. The reasons for the booming Startups in India could be interest shown by investors in the ideas of the youths and the easy availability of finance for starting a new business. With the process of availing a business loan available online Mudra Loan, getting a loan has become simpler.
What is a Mudra loan?
To promote the small enterprises in India, the government of India introduced Prime Minister Mudra Yojna in the year 2015. The business loans can be availed up to Rs. 10 lakhs by non-corporate,non-farm and micro-enterprises. These loans are known as Mudra Loans.
How does the government provide funds for a mudra loan?
You can avail funds through two modes:
- Microcredit scheme: Under the micro-credit scheme, you can get a loan for starting any activity related to the business up to Rs. 1 Lakhs. The mudra loans can be availed through self- help groups or joint liability groups.
- Refinancing through other institutions: A startup can also avail funds through any banks; rural banks, small banks, commercial banks or non- banking finance institutions. The funds are allocated to these institutions under Prime Minister Mudra Yojna.
Products of Mudra loan: There are three different types of mudra loans available for a startup in India.
- Shishu-The individuals who have just started the process of setting up their business require funds for the capital, equipment, infrastructure and raw materials. These startups can avail funds up to Rs 50,000.
- Kishore– Once the process of setting the business is completed, the startups need to be expanded. They can avail mudra loans from Rs 50,000 to 5 Lakhs for their business.
- Tarun- To get funds for increasing the scale of a startup, the funds can be availed for loan amount between Rs 5 Lakhs to Rs 10 lakhs.
Process of availing a Mudra loan: You can get a mudra loan through self-help groups or any bank. The loan can also be taken online by checking the following factors:
- Category: Before applying , ensure the right loan product between Shishu, Kishore and Tarun according to the need of the funds for the business.
- Sources: You can get a mudra loan from multiple sources. To get a mudra loan at best rates, you need to check the interest rates and other charges of different banks and institutions.
- Documentation: To get a mudra loan, you would require the following documents:
- Your Id proofs
- Your previous loan records
- Documents of credibility
- A definite business plan
- Company balance sheets (for Tarun and Kishore loans)
- Future growth path (for Tarun and Kishore loans)
Thus, a mudra loan can solve the financial hurdles of startups who want to work in diverse sectors and grow their business.