Small business owners looking to secure funding for their ventures can find a good option in e-Mudra loans, a government initiative introduced by the Ministry of Finance to provide financial assistance to small businesses in India.
E-Mudra loan fall under the Pradhan Mantri Mudra Yojana (PMMY) scheme and are offered by various public and private sector banks, including State Bank of India, HDFC Bank, ICICI Bank, and Punjab National Bank. E-Mudra loans can be applied in three categories – Shishu, Kishore, and Tarun. Shishu is for small businesses that are in their initial stages, Kishore is for those that are expanding, and Tarun is for established businesses that require larger funding. Here are some smart ways to apply for e-Mudra loans and secure funding fast.
1. Know the Eligibility Criteria
The eligibility criteria for e-Mudra loans differ according to the category of loan you are applying for. For Shishu loans, businesses should have a maximum limit of up to INR 50,000, while Kishore and Tarun loans can be availed for amounts ranging from INR 50,000 up to INR 10 lakh, and INR 10 lakh up to INR 10 crores, respectively. Small businesses, traders, manufacturers, retailers, and other entities that meet the eligibility criteria can apply for e-Mudra loans.
2. Gather the Required Documents
To apply for e-Mudra loans, businesses are required to provide several documents, including their business registration certificate, identity proof and address proof of the proprietor/partners/directors, latest income tax returns, bank statements, etc. Make sure to have all the required documents ready before applying for the loan.
3. Evaluate the Interest Rates and Terms of Repayment
It is important to evaluate the interest rates and terms of repayment offered by the bank before applying for e-Mudra loans. While the interest rates for e-Mudra loans are generally lower than those offered by traditional banks and financial institutions, they can vary according to the category of loan and the bank you choose. Additionally, the terms of repayment can also differ according to the bank and the loan category, so it is important to compare the different options before applying for the loan.
4. Choose the Right Bank
Different banks have different interest rates, repayment periods, and eligibility criteria for e-Mudra loans, so it is important to choose the right bank that suits your business requirements. Conduct thorough research and gather information on interest rates, loan tenure, repayment terms, and any hidden costs before deciding on a bank.
5. Apply Through the Online Portal
Most banks offer an online portal for e-Mudra loan applications. Applying through the online portal can save time and effort as the application process is simpler, faster, and more secure. Moreover, online applications can be completed at any time and from anywhere, making the process more convenient for small business owners.
6. Keep Track of the Application Status
Once you have submitted your e-Mudra loan application, it is important to keep track of the application status regularly. Many banks offer an online portal where you can check the status of your application. Following up on the status of the application can also help to speed up the process and secure funding faster.