InvestorQ : Can loans under Mudra Yojana be availed for taking commercial vehicle?
shivangi Arora made post

Can loans under Mudra Yojana be availed for taking commercial vehicle?

Manisha Mehta answered.
3 years ago

Yes, one can avail the Mudra Yojana to get a commercial vehicle loan. But first, let’s understand what the Mudra Yojana is. The Pradhan Mantri MUDRA Yojana (PMMY) is a scheme launched by the Prime Minister on April 8, 2015, for providing loans up to Rs. 10 lakh to the non-corporate, non-farm small/micro enterprises.

These loans are classified as MUDRA loans under PMMY and are sanctioned by commercial banks, small finance banks, cooperative banks, MFIs and NBFCs. The borrower can approach any of the lending institutions mentioned above or can apply online through this portal.

Under the aegis of PMMY, MUDRA has created three products namely 'Shishu', 'Kishore' and 'Tarun' to signify the stage of growth / development and funding needs of the beneficiary micro unit / entrepreneur and also provide a reference point for the next phase of growth.

These schemes cover loan amounts as below:

  1. Shishu: covering loans up to ?50,000
  2. Kishore: covering loans above ?50,000 and up to ?5,00,000
  3. Tarun: covering loans above ?5,00,000 and up to ?10,00,000

Mudra loans can be availed for the following:

- Vehicle loan: Commercial vehicle loan, car loan and two-wheeler loan

- Business Installment Loan (BIL): Loan for working capital requirement, buying plant and machinery, renovating offices etc.

- Business Loans Group Loans (BLG) and Rural Business Credit (RBC): Facilities such as drop line overdraft, overdraft facility, working capital loans, etc.

The Mudra loan is provided to individuals who need funding for their small businesses. The idea of the loan is to encourage entrepreneurs who want to develop their business activities and become employment generators.

To avail the loan, one must produce the business plan and approach a bank for application. The borrowers need to submit the proof of business enterprise, machinery quotation and name of the suppliers. The loan can be taken for buying a commercial vehicle provided it is used for your business operations exclusively. For more details, you may have to approach the bank and talk to the lender about the purpose of buying a commercial vehicle.