MSME loan: An Efficient Financing Solution for MSMEs
Over the last few years, India’s Micro, Small, And Medium Enterprises (MSME) sector have played an integral role in the country’s economy.
This emerging sector has significantly revolutionized the rural industry, thus bridging the gaps between the urban economy and semi-rural/rural economy.
One of the primary reasons for such growth is the easy availability of MSME loans across the country.
Access to sufficient credit is a vital tool for driving financial growth in these small-scale businesses.
One can even avail hassle-free loans for businesses from financial institutions as alternatives of MSME loan. Such loans also come with attractive features and benefits.
Many NBFCs like Bajaj Finserv provide additional benefits like pre-approved offers with these loans.
They also provide these offers on business loans, personal loans, mortgage loans and a lot of different financial products and services.
Pre-approved offers save a lot of time by simplifying the process. Check your pre-approved offer by submitting a few pieces of necessary information online.
Policies and benefits like these are helping small-scale businesses to avail their expenditure by taking credit.
These loans are quick financial solutions tailored for this business sector. Read on for an in-depth idea on MSME loans.
Full control over a business with high financing value
MSME loans given by NBFCs don’t involve liquidation of control, unlike the funds that come from venture capitalists and angel investors. They provide credit at the cost of reduced ownership in the business.
The aspect of ownership is essential for small business owners as they have limited asset at their disposal.
NBFCs offer robust sums of up to Rs. 30 Lakh. Various cottage industries and small-scale business like candle making unit, paper plates business, spices etc. are getting immense help from such initiatives by the financial institutions.
Affordable repayment procedure
MSME loan comes with a manageable repayment procedure and attractive interest rates. Thus, the business owners don’t have to commit a significant sum each month from their working capital to repay the loan.
The affordability and flexibility of these loans can help businesses avoid financial crises.
Moreover, lenders have crafted convenient tenures for paying off the interest. A borrower has the freedom to choose flexible repayment schedules between 12 months and 60 months.
Flexibility in borrowing for meeting unpredictable business needs
A borrower can opt for a Flexi Loan facility offered by Bajaj Finserv wherein he has the freedom to take credit whenever required from the total sanctioned loan amount.
Here, he has the freedom to save on interest payments as he will be paying interest only on the utilized amount.
Flexi loans can helps reduce EMIs by up to 45% as the borrower pays only the interest in the EMI.
Collateral-free loans
Recognizing their requirements and emergencies, business loans for the small businessmen are unsecured.
The nature of this financial product is designed in such a way that they are ‘asset light’.
Therefore, debtors don’t require pledging their valuable resources and can inch towards becoming successful small business owners.
Simple eligibility criteria to increase convenience
Lastly, the MSME loan eligibility criteria are simple for faster and smoother access to credit.
A borrower needs to be between 25-55 years old and must have a business running for a minimum of 3 years. They need to show their Income Tax returns filed for at least the past one year.
With such relaxed qualities and minimum paperwork, loans for MSMEs have a short and fast processing cycle.
A debtor need to provide the following documents prior to processing and verification: –
- KYC documents and passport size photograph.
- Certificate of business existence.
- Savings account statements and relevant financial reports.
After evaluating these documents, borrowers can get the loan amount disbursed with 24 hours. Thus, the introduction of MSME loan is a big relief to all the small and medium firms, especially after the imposition of GST.
New-age lenders provide prompt, convenient and affordable credit meeting with the expenses primarily for the under served people. With such facilities and features, MSMEs in India are undergoing a stage of rapid development.
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Category: Business
