Every small or medium-sized business needs additional funds at some point or the other. Most of them require financial assistance from an external source during the business growth and expansion phase.
Small businesses may need money to upgrade equipment, purchase inventory, improve infrastructure, hire staff, or meet everyday operating expenses. These days, many NBFCs offer MSME loans for small and medium-sized businesses looking for funds to finance their growth.
There are several benefits of availing small business loans from NBFCs. Let’s check out these benefits before proceeding with the MSME loan apply online.
Benefits Of Msme Loans
1. Online Accessibility
Availability of an MSME loan has become relatively more straightforward now than ever. At present, prospective borrowers do not need to visit the lender’s office even once to apply for a loan.
With websites and apps that most lenders offer, applicants can apply for a loan online from the comfort and privacy of their home or office. They can even scan and upload their documents online, making the loan process extremely easy and fast for borrowers and lenders.
2. Easy Eligibility Conditions
Intending to make MSME loans available to all, lenders have eased their eligibility conditions that most borrowers can fulfil readily. Most of these conditions are related to the borrower’s age, income, business vintage and experience, turnover, and profit. Business owners running their business successfully for the last few years can quickly apply for MSME loan, provided that they fulfil other business loan requirements as well.
3. Minimal and Paperless Documentation
NBFCs have minimal documentation requirements that applicants can fulfil from their smartphone or PC. Minimal documentation saves borrowers from hefty paperwork.
The documents required only involve identity proof, address proof, bank statements, income statements, proof of continuation, and a few others.
If these documents are ready, the applicants can scan and upload them via the lender’s website or app and wait for confirmation. Once verified, the applicant gets an approval within minutes.
4. No Collateral Requirement
Any company does not need to provide collateral, security, or guarantor to be eligible for an MSME loan. Since small and medium-sized businesses have limited assets, they do not want to risk them by pledging them as collateral. Therefore, MSME loan apply online proves to be of great help for small businesses with limited assets.
5.No End-Use Restrictions
Small business loans do not have any end-use restrictions. Borrowers can use their loan amount for any business-related purpose, be it to purchase inventory, upgrade machinery or equipment, invest in marketing, hire skilled staff, expand the workplace, or build working capital.
6. Ample Loan Amount
NBFCs offer generous loans to small businesses looking for funds to finance their growth or expansion. Borrowers have to calculate their planned expenses and apply for a loan amount suitable to their requirements. Although most lenders have a minimum and maximum loan amount to offer, it may differ depending on the borrower’s eligibility, documents, credit score, repayment capacity, and loan term.
7. Competitive Interest Rates
In today’s competitive environment, the more funds are on hand, the better positioned the business owner is to take risks and grow. With competitive interest rates, MSME loans ensure minimum expenditure on loan repayment. The remaining amount is available to meet other business needs.
8. Flexible Repayment
MSME loans do not have fixed repayment terms within which borrowers have to repay their borrowed amount. Most lenders have flexible repayment tenures with varying EMIs. The borrowers can use a business loan EMI calculator to find a loan term with the EMI amount suitable to their repayment capacity. Knowing EMIs beforehand makes repayment easily manageable, thereby reducing any chances of default.
Conclusion
MSME loans have significant benefits that small and medium-sized businesses can avail themselves of. These include fast processing, easy availability, online access, and no collateral requirement, which meet small business requirements at any stage.
Any company that fulfils the lender’s business loan requirements can apply for an MSME loan and support their business growth without worrying about the finances.
