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In 2022, 107 Indian startups achieved the status of Unicorn Start-Ups. Over the past few years, with the phenomenal growth in startups, the Government of India has introduced a few important initiatives to make it easier to conduct business. One such very popular scheme is the MUDRA loan for startups.

 

Proposed in 2015-16 by the then Finance Minister Shri Arun Jaitley, the Micro Units Development Refinance Agency was introduced by Prime Minister Shri Narendra Modi on April 8, 2015. 

 

A big help for budding entrepreneurs, a Mudra loan for business startups is a great way of fundraising.

Features of a Startup Mudra loan

The loan scheme was launched to assist micro and small enterprises financially. The features of the Mudra scheme for startups are:

  • You must be between 18 to 65 years of age to avail of a loan for your startup

  • This is an easy loan for traders, shopkeepers, vendors etc. and can be used for various needs

  • You can also take a loan for transport vehicles

  • There is no need for any collateral/ third-party security

  • Entrepreneurs from urban as well as rural areas can benefit from these services

Documents Required to Apply for Mudra Loan for Startups

To apply for Mudra Loan for startup businesses, you need certain documents. Here is the list of the documents required to apply for the Pradhan Mantri Mudra Yojana Loan for startups.

  • Identity Proof - PAN Card or Aadhaar Card or Passport

  • Latest passport-size photographs

  • Documents of the loan taken (if any)

  • Credibility Documents include Educational documents and past bank account statements

  • Well-Explained business plan

  • Balance Sheet of your business (Only for Kishore and Tarun loans)

  • Plan of Future Growth (Only for Kishore and Tarun loans)

How to Apply for Mudra Loan for Startups

Applying for the Mudra scheme for a startup is a simple and straightforward process. To get started, you first need to determine the category that your startup falls under. Then, ensure you understand your business requirements and match them with the criteria mentioned for each loan category.

Once you have identified the appropriate category, you can follow these steps to apply for the Mudra Yojana for startups:

  • Step 1: Visit the official Mudra loan website

  • Step 2: Download the Mudra loan application form from the website and fill in all the required details

  • Step 3: Once you have filled in the application form, upload all the necessary documents as per the instructions given on the website

  • Step 4: 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

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Modes of Funding Provided by Pradhan Mantri Mudra Yojana for Startup Funding

If you're starting a new business and need funding, you may want to consider the Pradhan Mantri Mudra Yojana, which provides Mudra loans for startup businesses in India. There are 2 modes of funding available through the program.

 

The first is the Micro Credit Scheme, which offers loans up to ₹1 Lakh through Micro Finance Institutions. Individuals, Joint Liability Groups, and Self-Help Groups can obtain these loans. This is a great option for small businesses that need a modest amount of funding to get started.

 

The second mode of funding is refinancing for banks and NBFCs. This is available for Kishore, Tarun, and Shishu loans and can be accessed through regional rural banks, commercial banks, small finance banks, and NBFCs. Refinancing can be a helpful option for businesses that must finance crucial activities.

FAQs for Mudra Loan for Startups

What is the interest rate of a MUDRA loan for a startup?

If you want a MUDRA loan for your startup, it's important to note that the interest rate may vary depending on the scheme, lender, and your profile. So checking with your specific lender for the most accurate and up-to-date information is recommended.

 

What is the maximum amount you can get for a Mudra Startup Loan?

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.

Is GST mandatory for a Mudra startup loan?

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.

 

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