Mining is one of the important and main sectors of economic growth. And, this is because it provides raw material to most of the industries. Since mining helps in country’s economic growth, therefore, Government is also providing support in growing mining business by offering start up business loans or the mining loans. Loans are lifeline especially for start up business.
What are Mining Loans?
A mining loan is the one which is given to manage the expenses associated with owning or operating a mining business. Mining Loan covers all the expenses for hospitalization.
Also, this loan includes cost & expenses of machines and equipment for drilling, excavating and extracting minerals from the mines. The loan is designed in a way to suit the unique needs of a mine owner or operator.
Eligibility to apply for a Mining Loan:
Before you apply for a mining loan, make sure you have a positive answer to the following questions:
- Do you have mining rights in the area where you want to start your mining business?
- Have you got mining lease, royalty sanction and environmental clearance?
- Is there already a market for what you want to mine?
- Have you planned out your market strategy?
If your answers to all the above questions are YES, then go ahead and apply for a mining loan, if
- You are an Indian Citizen
- Your age is above 21 years
- As per your documents, you are capable enough to pay back the loan.
Tenure of Mining Loan:
Mining Loan can be a short or long term, minimum 12 months & maximum 30 years. Long-term loans cover the depreciation and replacement cost of the equipment & machinery; which comes under business expenses every year in the mining business.
Mining Loan Interest Rate:
The interest rate completely depends upon your creditworthiness. If you have a high credit score, you will get a low rate of interest. However, if you have a low credit score, you will have to repay the loan at a higher rate of interest.
Documents Required for Mining Loan:
- ID Proof
- Address Proof
- ITR of last two Assessment Years
- Bank Statement of last six months
- Copy of Mining Lease
- Royalty Sanction Copy
- Copy of Environmental Clearance
- Proposed Balance Sheet for next two financial years
- Quotation of equipment & machinery
- Title Deed of the mine