Mudra means Micro Units Development and Refinance Agency
Ltd. Mudra means Agency for Production and Refinance of Micro Units Ltd. Unveiled
in 2015 under the Pradhan Mantri Mudra Loan, it intends to provide financial support
to small, new, and emerging businesses.
Business loans are nothing but a credit product that is
issued by NBFCs and banks. It helps entrepreneurs meet their business needs,
growth plans, capital investment etc. Business people are responsible for
reimbursing interest on the loan as per the terms of the loan.
Key difference between Mudra Loan and Business Loan
Interest rates are the primary consideration a borrower
takes into account when applying for some loan.
The interest rate on Mudra loan scheme depends
on the bank from which you apply for your loan. It usually begins at 8 per
cent.
There is a booming business lending market with lots of
buyers and lots of sellers. Sellers have thus become very competitive,
especially at interest rates. NBFCs are trying to provide business loans at
very low rates to attract more and more business people possible.
Eligibility
The eligibility under Mudra loan offers loans to the
following business owners and for the following purposes:
Shopkeepers, traders, vendors, and service sector allied
business owners
Equipment for micro-units
Agri-related non-farm activities
Financing for certain commercial vehicles, tractors and
tillers
Business loans, on the other hand, are much more welcome in
this respect. The qualification requirements generally are as follows:
Business record (minimum two years)
Previous year's ITR (minimum INR 1.5 lakhs)
Minimum turnover of INR 5 lakhs
Place of business and house have to be different
Owner of business should own either a house or a business
place
Documents Required:
Do expect that Mudra bank loan would
take a lot more paperwork than a business loan. Here is a rundown of the
required documentation to get one.
Two passport size photographs
Your ID proof
Business address proof
If business premises is on rent, the agreement for the same
Your address proof
ID proof of your business establishment
SSI registration certificate
Memorandum of Association and Articles of Association
Partnership deed
If you do not want to address this exhaustive list, you can
apply for a company loan at any time. You will need minimal documentation, most
of which will include the following:
Business address proof
PAN Card
Previous two years' ITR
