Funding is a crucial aspect of any Business. A constant cash-flow and finance are vital for the establishment and smooth operation of any Business. But at the initial stage, almost every Business struggles to find a reliable funding source. Especially the entrepreneurs & Micro & Small Business owners face this issue. As their Business ideas are generally unique, and they have limited resources to implement these ideas, many profitable Businesses either fail to start or fails in the initial stages.
Fortunately, this scenario is changing in India, slowly albeit steadily with Small Business Loans. The government has taken numerous steps to ensure such Businesses don’t face any issues on the financial front. Such loans and credit schemes have benefited Entrepreneurs and Micro & Small Business owners in multiple ways.
But still, there are some Business owners and entrepreneurs who are in a dilemma about these loans. So I have decided to end this dilemma and help them understand the benefits of Small Business Loans.
Benefits of Small Business Loans
- Easy of availability
Numerous Banking and NBFC(Non-Banking Finance Corporations) institutes offer collateral-free Small Business Loans. This is a significant benefit as most the entrepreneurs and Micro Business owners don’t have credible collateral for standard loans.
Such collateral-free loans ensure that these Businesses do not suffocate due to the absence of funding.
Moreover, almost every process of such loans is online. So the borrower doesn’t have to waste his/her time on office visits and documentation. The EMI calculators are available online, giving borrowers a clear idea of their EMIs and terms.
- Minimal Interest Rates
Small Business loans are devised to help Businesses to grow, and hence their aim is not profit-making. Moreover, these Small Business Loans are backed by the Government, resulting in reduced Interest Rates. As most of these loans are offered by banks, their Interest rates are low compared to Private Financers.
Apart from this, the various factors like the viability of the business model, the applicant’s financial health, tenure of the loan, and credibility of the borrower are taken into account.
- Easy Repayment options
Businesses are complex, and hence some Business owners can’t meet the standard repayment schedules. So, these Small Business loans are designed keeping these facts in mind. In such loans, EMIs are flexible, and they can be adjusted as per the Business’s revenue. So when the cash-flow is good, the EMIs can be increased, and when the cash-flow is not so good, EMIs cab is reduced. This reduces a lot of burden on the borrowers and focuses on their Business without worrying about repayments.
- Drives Growth
No Business can grow without funding. Expansion, exploring new Business opportunities, hiring more workforce, and spreading the Business demands a continuous cash flow.
You can add cutting-edge machinery, latest equipment & invest in marketing processes to scale-up your Business only if you have a reliable funding source.
These Small Business Loans can be of great help in such a situation. They save your Business from cash crunch & drive your Business Growth simultaneously.
- Numerous Options
You can choose from a wide range of Government-backed Small Business Loans to expand your Business. You have multiple options like MUDRA loans, CGTMSE loans, PSB loans in 59 minutes, & SMILE loans are just some examples. All these loans have various features and are devised to help a plethora of Businesses across India.
As almost every Business is unique, so are its needs. So it’s always better to go through these loans and choose the one that best suits your financial needs and Business goals.
- Tax Benefits
Some of the loans mentioned above can also help you save some Income Tax. As per existing Income Tax laws, a portion of the profit that goes into paying such loans is exempted from Income Tax.
Final Thoughts
It doesn’t matter what Business you are involved in; Small Business Loans can prove to be of great help. They are affordable, easy to avail and flexible in repayments. As I mentioned earlier, there are a variety of options and choosing the right choice is critical.
So before you go ahead with the process, we would recommend getting an expert’s assistance for easy approval and quick disbursement of the fund. And, that’s it for today!
What type of funding are you looking for?
Comment below, and we will be happy to help!
At Probal, we help entrepreneurs and MSMEs with their financial needs as per their requirements. Talk to us for more details.
