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Learn about MUDRA Loans for Startups, including their key features, eligibility criteria, required documents, and benefits for new entrepreneurs.
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. It is designed for non-farm enterprises involved in manufacturing, trading, or service-related activities, including allied sectors such as dairy, poultry, and beekeeping.
Here are some key features and benefits:
You can apply if you are a trader, shopkeeper, vendor, transport operator, small manufacturer, artisan, or engaged in other non-farm activities.
You can get funding based on your business needs under 4 categories — Shishu, Kishore, Tarun, and Tarun Plus.
Whether you operate in an urban or rural area, you can apply for a mudra loan for startup business through approved lending institutions.
You don’t have to pledge any collateral, which makes it easier for you to start your venture.
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.
You can apply through public or private sector banks, cooperative banks, regional rural banks, NBFCs, MFIs, or small finance banks.
You can complete your application online via the Udyamimitra portal with basic documents and details.
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.
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 eligibility criteria required for getting a MUDRA loan is as follows:
You must be a citizen of India
You must be between 18 to 65 years of age
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:
Loan Category |
Document Type |
Description / Purpose |
Shishu Loan (Up to ₹50,000) |
Proof of Identity |
Self-attested copy of Voter ID, Driving Licence, PAN Card, Aadhaar Card, Passport, or any Government-issued photo ID. |
Proof of Residence |
Recent telephone or electricity bill, property tax receipt (not older than 2 months), Voter ID, Aadhaar Card, Passport, or attested bank statement. |
|
Photographs |
Two recent passport-size colour photographs (not older than 6 months). |
|
Quotation of Machinery/Items |
Supplier details, name of machinery/items, and price quotation for purchase. |
|
Business Proof |
Licences, registration certificates, or other documents showing ownership and address of the business. |
|
Kishore, Tarun, and Tarun Plus Loans (Above ₹50,000 to ₹20 Lakhs) |
Proof of Identity |
Self-attested copy of Voter ID, Driving Licence, PAN Card, Aadhaar Card, or Passport. |
Proof of Residence |
Recent utility bill, property tax receipt, Voter ID, Aadhaar Card, or Passport of Proprietor/Partners/Directors. |
|
Photographs |
Two recent passport-size colour photographs (not older than 6 months). |
|
Business Proof |
Licences or registration certificates showing ownership and address of the business. |
|
Bank Statement |
Statement of accounts from the existing banker for the last six months (if applicable). |
|
Financial Statements |
Last two years’ balance sheets with income/sales tax returns (for loans above ₹2 Lakhs). |
|
Projected Balance Sheets |
For one year (working capital) or full loan period (term loan). |
|
Project Report |
Details of technical and economic viability of the proposed business activity. |
|
Legal Documents |
Memorandum and Articles of Association or Partnership Deed, as applicable. |
|
Asset & Liability Statement |
Required if no third-party guarantee is provided; helps assess net worth of borrower/partners. |
Under the Pradhan Mantri MUDRA Yojana (PMMY), you can access startup funding through 2 main modes:
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.
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:
Visit the official MUDRA loan website https://www.mudra.org.in/
Scroll down to the separate sections dedicated to the 3 categories, Shishu, Kishore, and Tarun. Click on the category you want to apply through
Download the application form from the website and fill in all the required details
Once you have filled in the application form, upload all the necessary documents as per the instructions given on the website
After submitting the application and documents, the bank will verify the same
Once your application is approved, the bank will authorise the loan amount and transfer it to your bank account
Apart from the official website, you can also visit https://udyamimitra.in/ to apply for the MUDRA loans.
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 consider 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.
The interest rate for a Startup MUDRA Loan is decided by individual banks or financial institutions as per RBI guidelines. There is no fixed rate under the PMMY scheme, and rates may vary depending on the lender’s policies and your credit profile.
The maximum loan amount for a MUDRA Startup Loan is up to ₹10 lakhs. However, the loan amount may vary depending on the scheme, lender, and the borrower's eligibility criteria, such as credit score, business plan, and financial history. Checking with the specific lender for accurate and up-to-date information is recommended.
While GST registration is not mandatory for MUDRA Startup Loans, some lenders may require it as part of their loan eligibility criteria. Therefore, checking with the specific lender for accurate and up-to-date information regarding the required documents and eligibility criteria for obtaining a MUDRA loan for your startup is recommended.
There is no separate subsidy offered under the MUDRA Loan for Startups scheme. However, if your project is linked to a government scheme offering capital or interest subsidies, you may be eligible for benefits through that linked initiative.
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