MUDRA Loans are micro loans made available through the Pradhan Mantri Mudra Yojana (PMMY) to the MSME sector to relieve them of the difficulties associated with a liquidity crisis. By connecting with various lender partners across the country, these loans are easily and quickly available and widely accessible.
The loans provided under this plan can be classified into three types based on the phase of a company’s development and the amount of loan required by the borrower. The maximum loan amount available under the PMMY is Rs. 10,00,000, which you can apply for through the Tarun Scheme.
Like any other business loan, the Mudra loan requires the borrower to provide a project report at the time of application. The project report is essential to process the application and sanction the loan.
The following section discusses the specifics of the project report required for a Mudra Loan.
What exactly is a project report?
As previously stated, Mudra Loans, like any other business loan, require a project report to be submitted when applying for a loan in the Kishor or Tarun category. However, Shishu loans are the most easily accessible loans for small business owners, and debtors are usually not required to show project documents.
A project report is a document that contains information about the business. It also includes a comprehensive cost-benefit analysis of the proposed expenditure for which the business loan is being sought. In addition, it gives the report’s readers a detailed picture of the cost of the project, scope of activities (proposed and existing), existing debt (if any), revenue projections, and so on.
The project report should be complete and contain valid data to be readily accepted and approved for loan sanctioning under PMMY.
Eligibility for Mudra Loans
The government of India created mudra Loans in accordance with the PMMY plan to help small business owners meet their economical requirements and operating expenses through simple funding alternatives.
- Anyone who is the registered proprietor or leader of a small business can apply for a Mudra Loan.
- For Mudra Loans, the owner must at least be eighteen years old, with the highest age restriction of sixty-five years.
- The loan amount cannot exceed ten lakh rupees. It should not be a small/micro business related to farming.
Where do you get your Mudra loan?
You are required to contact the bank of your choice in your area and not the government. MUDRA [Micro Units Development & Refinance Agency Ltd is merely a lending institution].
How much money will be made available through the Mudra scheme?
Your company’s funding needs determine the loan amount.
MUDRA divides the loan scheme into three categories based on the amount of funding required and the stage of the business.
- Shishu: loans up to 50,000/-
- Kishor: loans over 50,000/- and up to 5 lakhs
- Tarun: Covers loans ranging from 5 lakh to 10 lakh.
If the business unit is already in existence or has a shop/building for carrying out the anticipated business at the time of application, the chances of receiving a mudra loan improve.
What documents must be presented to obtain a Mudra Loan?
The following documents are required to apply for a Mudra Loan:
- Mudra Loan Application
- A one-page application for a loan through the Shishu plan
- A three-page loan application under the Kishor and Tarun Scheme
- Identity proof — a self-certified copy of a voter’s ID card, a driving license, a PAN card, an Aadhaar card, or a passport.
- Proof of Residence – A recent telephone bill, an electricity bill, a property tax receipt (no more than two months old), a voter’s ID card, an Aadhaar card, and the passport of the proprietor/partners/directors.
- Proof of SC/ST/OBC/Minority status.
- Proof of Business Enterprise Identity/Address -Copies of applicable licenses/registration certificates/other documents about the business unit’s ownership, identity, and address.
- The applicant must not be a defaulter in any bank or financial institution.
- Account statement (for the previous six months) from the current banker, if any.
- Unit balance sheets for the previous two years, returns on income tax and sales tax, for example (Applicable for all cases from. Rs. 2 lacs and above).
- Balance sheets are projected for one year in the event of working capital constraints and the life of the loan in the case of a term loan (Applicable for all cases from Rs.2 Lacs and above).
- Sales made during the current fiscal year up to the date of application submission.
- A project report (for the proposed project) covering technical and economic viability aspects.
- Memorandum and articles of incorporation of the company/Partnership Deed, etc.
- In the absence of a third-party guarantee, the borrower’s asset and liability statement, including Directors and Partners, may be requested to determine net worth.
- Photographs of the Proprietor/Partners/Directors (two copies).
MUDRA Loan Project Report Components
Make sure to include the following critical aspects of the MUDRA loan project report model while producing your report to get your loan sanctioned:
- Goal: Emphasize your company’s goal or the vision upon which it was founded and continues to operate.
- Expertise Area: Employees’ talents or would like to have in your company.
- Budget: Investment expenses for the current project or specific financial information for an existing organization.
- Equipment Specifications: Tools, machinery, machinery, plants, parts, and other items used in the firm or unit to conduct the business.
- Commercial Details: Plans for launching a new business or expanding an existing one.
- Firm Profile: This section can include information about the company’s origins, important milestones, and achievements to date.
- Order Details: Whether any local or foreign export orders have been received, as well as the details.
- Employee Information: Information on the number of personnel and the projects they are engaged in.
- Logistics: Information on the costs of commercial and private transportation.
- Advertising and Marketing: Strategies used to promote a business or a product. Aside from this, you must include information about the products or services used, the manufacturing processes employed, third-party information, and the land or commercial space, which should be followed by the project report’s conclusion for the MUDRA financing.
By following the MUDRA loan project report rules, you can obtain funded and begin your entrepreneurial adventure.