SME Finance – To Promote the Growth of Small and Medium Sized Enterprises
Needless to say, SMEs or small and medium sized enterprises heavily contribute in the growth of the Indian economy. These companies majorly help in generating employment opportunities, and show a lot of potential which can further promise excellent socioeconomic development throughout the country. However, hard work alone is not sufficient for successfully running the small enterprises as just like every other business, they require a continuous influx of cash. In fact, these companies have diversified needs such as stocking inventory, paying salary, buying new equipment, and maintaining cash flow, and hence, they demand proper funding at regular intervals.
While it is possible to opt for conventional methods of arranging funds, they may not be always reliable, and this is where the role of SME finance comes up. Just as its name suggests, this incredible financing solution has been designed specifically to meet the requirements of small and medium sized enterprises. Available in the form of short-term, unsecured loans, such easy to access financing tools do not require any collateral in order to raise the necessary funds. All you have to do is thoroughly scout the markets to equip yourself with a lender who can offer you low interest rates and flexible repayment terms.
How SME loans can ensure the growth of your business?
Whether it is for your working capital or for expanding your line of products, SME loan options can prove to be immensely helpful in grabbing different growth opportunities. For a better understanding, here is a list of advantages you can have by taking an SME loan.
• Quick and convenient – One of the most important benefits of these loans is that they are accompanied with an easy documentation process as only a few basic documents are required. And since the documentation procedure does not involve much time, the loan is quickly approved and funds are timely transferred in your account. In addition, if you hold multiple accounts with a bank or you are a loyal customer of a financial institution, the entire sanction process becomes easier for you.
• No need to share profit – When you approach a financial institution or a bank to take an SME loan, you have to simply pay back the loan amount with some interest. The institution does not interfere in your decision-making process or daily functioning. Hence, the ownership of your business and the right to take all the decisions remain completely with you.
• Low interest rate – In case of SME finance, the lenders usually charge affordable interest rates to enhance the business owner’s ability to repay the loan. Additionally, if you have an excellent credit score and payment history along with healthy relations with the financial institution, you can seamlessly avail low interest rates and numerous discounts and offers.
• Flexible repayment tenure – The tenure of the loan is usually decided by the lender on the basis of the total amount that you wish to generate through the loan. However, many of these short-term loans are offered for a flexible period that can range from a month to 36 months. Also, you can choose between different repayment options including weekly, monthly, and bi-monthly, depending on your own convenience level.
• Tax benefits – Taking SME loans not only assists you in growing your business, but also allows you to claim certain tax benefits. To know more about these benefits, you can simply ask your lender to provide all the information, before signing the agreement.
Clearly, you can rest assured that if SME finance is invested wisely in your business, it will only grow and yield positive results. You just have to get in touch with a dependable financial institution, and acquire every piece of detail about the loan in order to avoid any regrets later on. Also, first understand the financial requirements of your business and then look for a suitable SME financing solution.