How a Mudra Loan Can Help Your Business Grow Compared to a Business Loan
Learn about eligibility, benefits, and how Bajaj Finserv Business Loan offers flexible funding up to Rs 80 lakh.
Discover how a Mudra loan can boost your business growth and how it compares to a business loan. Learn about eligibility, benefits, and how Bajaj Finserv Business Loan offers flexible funding up to Rs 80 lakh.
Every entrepreneur dreams of taking their business to the next level. Whether it is upgrading equipment, hiring skilled staff, or expanding into new markets, growth requires resources. That is where the right financing can make all the difference. In India, two popular options Mudra loans and business loans offer entrepreneurs much-needed financial support.
Choosing between a Mudra loan and a business loan depends on the size of your business, your funding needs, and your goals. Each has its unique features and benefits, and understanding how they work can help you make an informed decision. Let us dive into what each offers and how they can drive your business forward.
All about Mudra loans
Mudra loans, introduced under the Pradhan Mantri Mudra Yojana (PMMY), are designed to support micro and small businesses. They are especially helpful for first-time entrepreneurs or small-scale enterprises in the trading, manufacturing, and service sectors. With a loan amount capped at Rs. 10 lakh, Mudra loans are ideal for those looking to fund smaller expenses like purchasing raw materials or machinery, upgrading shop infrastructure, or meeting operational costs. One of the standout features of a Mudra loan is that it does not require collateral. This is a big advantage for small businesses that might not have assets to pledge.
Mudra loans are categorised into 3 schemes:
• Shishu
• Kishor
• Tarun
Each scheme caters to businesses at different stages of growth. While Mudra loans are excellent for micro-level businesses, they have limitations. For instance, the maximum loan amount is Rs. 10 lakh, which might not be enough for larger projects. If your funding needs exceed this, or you are planning a major expansion, a business loan might be a better fit.
Exploring business loans
Business loans, on the other hand, offer a more versatile solution and can fund both medium and large-scale needs. Whether you are planning to expand your operations, invest in cutting-edge machinery, or enter a new market, a business loan provides the flexibility and funding to turn those plans into reality.
Trusted lenders like Bajaj Finance offer loans ranging from Rs. 2 lakh up to Rs. 80 lakh, giving you the freedom to address larger expenses. Unlike Mudra loans, they come with longer repayment tenures of up to 8 years, making it easier to manage repayments without straining your cash flow. This is a collateral-free business loan, so you do not have to worry about pledging assets to secure funding. Another advantage of Bajaj Finserv Business Loan is the quick disbursal process, making it a viable option when you need urgent financial support to seize a business opportunity or tackle unexpected expenses.
Choosing between Mudra loans and business loans
When deciding between a Mudra loan and a business loan, it is important to assess your specific needs. Here is a breakdown of what each loan option offers:
Mudra Loan
- Ideal for businesses just starting or managing daily operations
- Get funds up to Rs. 10 lakh
- Loans are processed with minimal documentation and typically faster approval
- Repayment tenures are generally up to 5 years, which works well for smaller, day-to-day expenses
Business Loan
- Suitable for businesses looking to scale up, expand, or undertake larger projects
- Larger loan amounts can be sanctioned
- Repayment options usually range from 12 months to 96 months, offering flexibility for bigger financing needs
- Lenders like Bajaj Finance transfer funds within 48 hours of approval
While Mudra loans are perfect for micro and small businesses taking their first steps, a business loan can empower you to scale your operations from day one and achieve ambitious goals. If you are ready to take the next step, consider applying for a Bajaj Finserv Business Loan and set your business on the path to success!
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