According to recent reports, India’s MSME sector contributed to around 30% of the country’s total GDP, attesting to the growth of small businesses across the country. This report also shows that more than Rs.66,000 crore got sanctioned in August 2020 after the launch of 59-minute loan approval scheme.
Despite this massive growth and economic development, some businesses still faced issues arising because of inadequate financing. To mitigate this problem, commercial lenders introduced tailor-made MSME loan for new business. However, like all other financial products, before availing one, it’s advisable to delve deeper and understand the advantages this form of credit brings, as it allows a borrower to utilise the same properly.
What is an MSME loan?
MSME loan is a type of business loan that provides additional funding to micro, small and medium enterprises so that they can expand their business. Business expansion usually involves investing a massive amount to revamp infrastructure, hire skilled workers, procure necessary equipment, etc. Consequently, most of the business owners look for borrowing options to meet these financial requirements.
An MSME loan for business allows organisations to obtain sizeable funds without pledging any asset; this not only simplifies the application process, but also eliminates any chance of asset loss in case of a default.
Especially for people trying to establish their new businesses, this loan type comes as an ideal option to ensure that their business never runs out of working capital.
Benefits of MSME loan
There are several benefits of availing an MSME loan; its easy availability, large loan amount, borrower-friendly terms, all help in availing and repaying such a debt. Here are some more reasons that show the benefits of such a credit.
With the minimal documentation procedure, an MSME loan for new business becomes an inevitable choice for business owners. From investing in start-up projects to expanding an existing business, you can easily eliminate the lengthy application procedure of traditional loans and get instant solutions for all your financial needs. Thanks to dedicated online portals, both the application procedure and loan disbursal process have also become easier.
Flexible loan tenure
In most cases, borrowers can opt for a loan tenure that best meets their repayment capability. This enables borrowers to repay the MSME loan for new business as per their convenience.
Reduced Interest Rates
Borrowers can also benefit from a competitive MSME loan interest rate. The reduced interest rates can help to save a significant amount during repayment.
Apart from these, commercial lenders also make sure that their customers get hassle-free experience during the application procedure. With nominal document requirements and quick disbursal process, one can always rely on this option during emergency situations.
On top of that, popular financial institutions like Bajaj Finserv also provide pre-approved offers to existing customers to make financing less time-consuming and hassle-free. These offers are available on several financial products such as business loans, personal loans, credit cards, etc. You can check your pre-approved offer by submitting basic details you’re your name and contact number.
There are certain financial habits one should inculcate to manage the business growth, and it starts with choosing an ideal loan option. With these compelling benefits of an MSME loan for new business, it gets easier to achieve the long term business goals as well.