All schemes
Loan Finance

PMMY MUDRA Tarun

Expansion loan ₹5 lakh – ₹10 lakh

Maximum benefit
₹10 L
Typical processing
30–45 working days for new lender relationships; faster for existing customers
Apply on official portal

About this scheme

PMMY Tarun is the highest tier of the Mudra scheme, covering loans between Rs. 5,00,000 and Rs. 10,00,000. Designed for established micro-enterprises ready to scale — adding capacity, opening additional outlets, or making major capital purchases. Tarun loans typically require stronger credit history and documentation than Shishu or Kishore.

What you get

  • Loan amount: Rs. 5,00,000 – Rs. 10,00,000
  • Up to Rs. 10 lakh remains collateral-free via CGTMSE/CGFMU cover
  • Interest rate: 9.0%–14.0% per annum (varies by lender and risk profile)
  • Repayment tenure: up to 7 years for term loan portion
  • Working capital cash credit limit + term loan can be combined
  • Insurance of stocks and machinery typically funded by the lender
  • Top-up loans available on satisfactory repayment after 12 months

Who qualifies

Existing micro-enterprises with at least 12 months of operating history, demonstrable revenue, and a credit need between Rs. 5,00,000 and Rs. 10,00,000. Eligible entity types include proprietorship, partnership, LLP, and private limited (for genuine micro-units). The business must have a verifiable GST registration (if turnover crosses threshold) and Udyam registration. The applicant must have a clean credit history with no defaults in the past 2 years.

All industries qualify (no NIC restriction).

All business types qualify.

Available across India (central scheme).

How to apply

  1. 1Prepare detailed project report (DPR) with 3-year financial projections
  2. 2Compile last 2 years of audited financials (P&L, balance sheet) and last 2 years of ITR
  3. 3Approach lender; many require a pre-application discussion with credit officer
  4. 4Submit full application: business plan, financial statements, GST returns (12 months), bank statements (24 months), promoter KYC
  5. 5Lender conducts on-site visit, references check with suppliers/buyers, and credit appraisal
  6. 6Sanction issued; loan agreement, hypothecation deeds, and personal guarantees executed
  7. 7Disbursement typically within 30–45 working days

Key terms and conditions

  • Hypothecation of assets + personal guarantee of all partners/directors is standard
  • Interest is typically floating; some lenders offer fixed-rate options at a premium
  • Stock statement to be submitted monthly if working-capital component exists
  • Annual loan review with updated financials
  • Insurance of hypothecated assets with lender as beneficiary is mandatory

What disqualifies you

  • Crop loans excluded — Kisan Credit Card is the appropriate scheme
  • Speculative activities (commodity trading, stock market) excluded
  • CIBIL score below 700 will lead to rejection at most banks
  • Existing loan from another lender for the same purpose disqualifies
  • Promoters must have at least 25% own contribution (margin money) for term loans

Documents typically required

  • Aadhaar + PAN
  • GST registration
  • Last 2 years ITR
  • Last 12 months bank statement
  • Business projections

Frequently asked questions

Q. How is Tarun different from a regular bank business loan?
Tarun loans are covered under CGTMSE/CGFMU guarantee scheme for collateral protection, are typically processed faster, and have transparent interest rate structures. Regular business loans may require collateral above Rs. 10 lakh.
Q. Can I use Tarun to refinance my existing high-interest loan?
Refinancing is generally not the intended use. Some lenders may consider it if the existing loan is from an unorganised lender, but it requires special permission.
Q. What margin money do I need to contribute?
Typically 25% of the project cost for term loans. So for a Rs. 10 lakh asset, you contribute Rs. 2.5 lakh and the loan covers Rs. 7.5 lakh.
Q. Will my application be rejected if I have a small existing loan?
Not necessarily — the lender assesses total debt-to-income. If your existing loan is serviced cleanly, Tarun can still be sanctioned.

The content above is compiled from public information published by the scheme authority. Eligibility, benefits, and procedures are subject to change. Confirm details directly with the official portal before applying. BharatSeal does not process scheme applications.