Mudra Loan Tiers Explained — Shishu, Kishor, Tarun, Tarun Plus
The Pradhan Mantri Mudra Yojana (PMMY) provides loans to non-corporate, non-farm small and micro-enterprises through four tiers. Shishu covers loans up to ₹50,000 — typically for very early-stage micro-enterprises or working capital needs. Kishor covers ₹50,001 to ₹5 lakh — suitable for established micro-enterprises looking to expand or modernise. Tarun covers ₹5 lakh to ₹10 lakh for growing small enterprises. Tarun Plus, introduced recently, extends the limit to ₹20 lakh for borrowers with a good track record under the Tarun category. Most Food & Beverage setups (cloud kitchens, bakeries, sweet shops) fall under Kishor or Tarun. Ecommerce inventory and working capital needs often fit the Kishor range. BizXPlan's reports calculate your specific Mudra loan requirement based on the gap between your total project cost and your own promoter contribution.
What Banks Actually Check in a Mudra Loan Application
Banks evaluate four key areas when reviewing a Mudra loan application. First, viability: does the business model make sense and will it generate enough revenue to repay the loan? This is where your project report is critical. Second, DSCR: is your net profit sufficient to cover the EMI? A DSCR of 1.25 or higher is typically required. Third, promoter contribution: are you personally investing 10–25% of the project cost? This demonstrates commitment and reduces bank risk. Fourth, documentation: do you have your KYC, address proof, business registration (if applicable), and FSSAI or other trade licences in order? BizXPlan directly addresses the first two criteria — viability and DSCR — with its financial projections. The report also flags if your budget-to-startup-cost ratio suggests you need a loan at all, and calculates exactly how much loan you need.
How to Format a Project Report for Mudra Loan
A project report for a Mudra loan application should cover: (1) Promoter background — who you are and any relevant experience; (2) Business description — what product or service you will sell, target customers, and USP; (3) Cost of project — equipment, civil work, security deposit, working capital, and total capital requirement; (4) Means of finance — your own contribution versus the loan amount requested; (5) Financial projections — 12-month P&L, cash flow, and break-even analysis; (6) DSCR calculation — demonstrating your ability to repay; (7) Risk analysis — key risks and how you plan to mitigate them. Sections 3–7 are generated automatically by BizXPlan. You write sections 1–2 yourself based on your actual background.
Which Business Types Qualify for Mudra Loans
Mudra loans are available to non-farm, non-corporate small businesses. This covers most Food & Beverage setups: cloud kitchens, bakeries, sweet shops, tiffin services, juice bars, fast food stalls, and coffee shops all qualify. For Ecommerce, marketplace sellers, social commerce businesses, and D2C brands running from home or a small warehouse typically qualify. The business must be Indian and the promoter must be an individual, proprietorship, or partnership firm — not a private limited company (companies can apply under separate MSME schemes). BizXPlan supports all 13 qualifying business types and tailors the financial projections, cost estimates, and loan calculations for each.