MSMEs in India is only second to China in terms of numbers. As of 2019, more than 63 million MSMEsare functional. Of the several initiatives that have been launched, an MSME loan forms the crux, ensuring easy financial assistance to start as well as expand or develop an MSME business venture.
From expanding to upgrading, every business requires funds to move forward in their ventures. While financing with these loans is a convenient option, small or medium business owners should look to expand their firm with competitive MSME loan interest rates so that they can repay it easily.
This can be done in several ways, the primary being that of diversification into newer businesses or upgrading of equipment and resultantly higher production. Aspiring entrepreneurs must understand the nuances of an SME/MSME loan to understand the advantages that can be availed.
Several financial institutions like Bajaj Finserv proved this collateral-free loan to aid start-ups. This company also assure of fast and hassle-free approvals.
• Easy accessibility: Small businesses often require financial assistance at short notice. Depending on the nature of the firm, there can be supplier demands, advance payments or simply increased projected sales demanding raised production budgets. Under such circumstances, an MSME loan is the efficient financing solution for MSMEs and come in handy due to their easy accessibility and high loan amounts going up to Rs. 30 Lakh.
• Absolute control over funds: Several investors often finance companies for their upgrade or expansion, though they seek to control the company’s policies in return as well. In the case of loans offered by NBFCs, there is absolute control over the available funds for entrepreneurs. Additionally, loan accounts can be easily controlled online.
• Economical interest rates: The loan schemes offered by NBFCs and other financial institutions have very convenient rates of interest. These MSME loan interest rates are economical and with proper business planning, they can easily repay them back in a short tenor.
• Collateral free financing solution: One of the best features of business loans for small or medium enterprises is the lack of collateral and approval within 24 hours. Business owners considering how to easily get a collateral-free business loan can simply avail of these schemes without any hassle. Not putting up production equipment as security ensures continued production even in the event of a downturn.
• Short term financial product: Mostly serving short term financial requirements, these loans have a short tenor of 12 to 60 months. As a result, the business establishment can easily clear the loan in a short time. The result of such an MSME loan with short tenor is that entrepreneurs can borrow the financial aid easily as well as clear their debts fast; thereby leave the financial and mental pressure behind.
While financial assistance has previously always come with restraints, under the schemes launched by NBFCs, these have become exceptional lucrative for both establishment and expansion. Entrepreneurs can avail of these loans to ensure the continued and bettered functioning of their ventures.