Mudra Loan for Startups 2026: Up to ₹20 Lakhs for New Business

The Mudra Loan for Startups, offered under the Pradhan Mantri Mudra Yojana (PMMY), provides financial assistance of up to ₹20 Lakhs to new entrepreneurs. It supports small businesses engaged in manufacturing, trading, and service sectors, including activities allied to agriculture, helping them establish and expand their ventures with ease.

The Startup MUDRA Loan helps you access financial support for your small business. This mudra loan for new business is designed for non-farm enterprises involved in manufacturing, trading, or service activities, including allied sectors such as dairy, poultry, and beekeeping.

Here are some key features and benefits:

Wide Sector Coverage

You can apply if you are a trader, shopkeeper, vendor, transport operator, small manufacturer, artisan, or engaged in other non-farm activities.

Loan Amount up to ₹20 Lakhs

You can get funding based on your business needs under 4 categories — Shishu, Kishore, Tarun, and Tarun Plus.

Available Across India

Whether you operate in an urban or rural area, you can apply for a mudra loan for startup business through approved lending institutions.

No Collateral Needed

You don’t have to pledge any collateral, which makes it easier for you to start your venture.

Affordable Interest Rates

MUDRA loans are designed to be convenient for the budding entrepreneurs in India, which is why the interest rates are affordable. This makes the repayment manageable for startups.

Multiple Lending Options

You can apply through public or private sector banks, cooperative banks, regional rural banks, NBFCs, MFIs, or small finance banks.

Simple Application Process

You can complete your application online via the Udyamimitra portal with basic documents and details.

Transparent Process

There are no agents or intermediaries involved in getting a mudra loan for startups, ensuring a fair and direct process

The interest rate for a Startup Mudra Loan is not fixed under the Pradhan Mantri Mudra Yojana (PMMY). It is determined by the Member Lending Institutions (MLIs), such as banks, NBFCs, and MFIs, based on Reserve Bank of India (RBI) guidelines.

While rates vary by lender, borrower profile, loan amount, and business requirements, Mudra Loan interest rates are commonly offered from around 8%–12% p.a. by many banks. Actual rates may be higher or lower depending on the lending institution and the applicant's creditworthiness.

Each lender sets its own rate depending on factors like your credit score, loan amount, and repayment capacity. This ensures flexibility while keeping rates competitive for micro and small enterprises.

The Mudra loan eligibility for startups includes the following criteria:

• You must be a citizen of India

• You must have a satisfactory credit history with no record of loan defaults

• Individuals, proprietorships, partnership firms, private and public limited companies, and other micro or small enterprises are eligible to apply

You might need the following documents to apply for the Pradhan Mantri Mudra Yojana startup loan:

Under the Pradhan Mantri Mudra Yojana (PMMY), you can access startup funding through 2 main modes:

• Micro Credit Scheme

Offers loans up to ₹1 Lakh through Micro Finance Institutions. Individuals, Joint Liability Groups, and Self-Help Groups can avail of these loans for small-scale business activities.

• Refinancing for Banks and NBFCs

Enables banks, regional rural banks, small finance banks, and NBFCs to finance loans under the Shishu, Kishore, and Tarun categories for micro and small enterprises.

You can easily apply for a Mudra Loan for Startups online by selecting the right category based on your business needs.

You can follow the below steps to apply for the Mudra Yojana for startups:

1. Visit the official Mudra website at https://www.Mudra.org.in/.

2. Navigate to the loan categories available under the scheme, such as Shishu, Kishor, Tarun, or Tarun Plus, and choose the one that best suits your funding needs.

3. Download the relevant application form and fill in the required details accurately.

4. Gather the necessary documents, such as identity proof, address proof, business proof, and any other documents required by the lender.

5. Submit the completed application form and supporting documents to a participating bank, NBFC, MFI, or other eligible lending institution.

6. The lender will review your application, verify the submitted details, and assess your eligibility.

7. If approved, the loan amount will be sanctioned and disbursed according to the lender's policies.

You can also explore funding opportunities through the Udyami Mitra portal (https://www.udyamimitra.in/), which helps applicants connect with participating lenders under the Mudra scheme.

If you are not eligible for a Mudra Loan under PMMY or require a higher loan amount, you can explore other business loan options available on Bajaj Markets.

Yes, first-time entrepreneurs can be among the primary beneficiaries of the Pradhan Mantri Mudra Yojana (PMMY). The scheme is designed to support eligible micro and small business owners, including individuals starting a new business venture. While prior business experience is generally not mandatory, lenders may assess factors such as the viability of the business idea, repayment capacity, and the documents submitted with the application.

Benefits for first-time entrepreneurs:

• Access to collateral-free funding, subject to lender approval

• Suitable for starting or expanding small business activities

• Available through banks, NBFCs, MFIs, and other participating lenders

• No prior business experience is typically required

• A well-defined business plan may improve the chances of approval

• Loans are available under different categories based on funding requirements and business stage

The Startup MUDRA Loan under the Pradhan Mantri Mudra Yojana (PMMY) gives you access to affordable funding for your small business. With flexible categories, minimal documentation, and collateral-free credit of up to ₹20 Lakhs, it supports you in starting or expanding your venture across manufacturing, trading, or service sectors.

If your business needs a larger credit limit or quicker access to funds than what the MUDRA scheme offers, you can apply for a business loan. These loans come with competitive interest rates, flexible repayment options, and simple online applications, helping you manage working capital, purchase equipment, or expand operations efficiently.