Micro and small businesses need some easy access to funding to grow to the next level. The Pradhan Mantri Mudra Yojana (PMMY) is a scheme that can fulfill this requirement. The term MUDRA in the PMMY scheme is an acronym for Micro Units Development and Refinance Agency. 

As its name indicates, the Pradhan Mantri Mudra Yojana offers loans for micro and small businesses to the tune of Rs. 10 lakhs. If your business is eligible for this loan, it is possible to apply for this financing online, thanks to the e-Mudra facility that makes micro financing accessible to small businesses.

Features of the e-Mudra loan

In case you are interested in availing a loan via the Pradhan Mantri Mudra Yojana, check out the main features of the loan below.

• Both new and existing micro and small businesses can avail this loan.
• The repayment tenure can be as long as 5 years.
• Startups and small businesses can borrow up to Rs. 50,000 under the Shishu Loan of the PMMY.
• Businesses can also borrow the Kishore Loan, ranging from Rs. 50,001 to Rs. 5,00,000, and use the funds to buy equipment, new machinery or raw materials.
• The Tarun Loan under the PMMY fulfills the larger needs of more established small businesses. Under this loan, you can borrow amounts from Rs. 500,001 to Rs. 10,00,000.

Documents required to avail the Mudra loan

To avail a Mudra loan under the PMMY scheme, you need to submit the following documents along with your application, depending on the loan you wish to take.

Shishu Loan:

• Proof of identity
• Proof of residence
• Applicant’s recent photograph
• Quotation of machinery or other items to be purchased with the loan
• Details of the supplier, price and other particulars of the machinery or items to be purchased 
• Proof of identity and address of the business enterprise
• Proof of category like SC/ST/OBC etc.

Kishore and Tarun Loan:

• Proof of identity
• Proof of residence
• Proof of category like SC/ST/OBC etc.
• Proof of identity and address of the business enterprise
• Statement of accounts (for the last six months)
• Previous two years balance sheets of the unit along with income tax/sales tax return
• Projected balance sheets for one year (in case of working capital) or for the period of the loan (in case of term loans)
• Sales achieved during the current financial year up to the application date
• Project report
• Recent photographs of the proprietor, partners or directors

Can you get a Mudra loan without proof of income?

So, as you can see from the list of documents required for the mudra loan as shown above, you need to provide proof of income aka sales in case you are applying for the Kishore Loan or the Tarun Loan. 

Conclusion

When you are applying for business financing, it is extremely important to keep the paperwork ready and submit the documents required correctly and completely. Any missing documents or any incorrect paperwork can delay your loan approval, or even lead to your loan application being rejected. These setbacks could delay the growth of your business. But with a little bit of foresight, you can ensure that your Mudra loan is promptly approved and disbursed.