Breaking news: Nearly 3,16,05,581 Micro, Small and Medium Enterprises (MSMEs) were registered in India between 2020 and 2023. SMEs are mushrooming in almost all major sectors in India—agriculture, food processing, electronics, handicrafts, textiles, and pharmaceuticals. They significantly contribute to the country’s economy by creating new jobs, driving technological innovations, expanding the export market, and improving opportunities for everyone.
Even though statistics paint a rosy picture of SMEs—and it’s all true, they are not bereft of challenges. Most manage to establish a business but struggle with acquiring finances for its sustenance and expansion due to stringent eligibility criteria, lack of collaterals, and limited financial history. One of the best solutions is approaching non-banking financial institutions (NBFCs) for a collateral-free SME loan.
Upon reading this, we know your mind must be flooded with questions. You probably have specific opinions on loans already. Keep it aside for the next few minutes and take a quick masterclass on SME business loans through this blog!
What are SME loans? What are their benefits for businesses?
SME business loans help small and medium-sized local industries overcome financial hurdles, achieve sustainable growth, and continue making a progressive impact on society and the nation.
With extra funds on hand, businesses can streamline their operations and successfully implement their expansion goals, such as:
- Managing payroll, rent, and inventory purchases
- Hiring additional staff
- Opening new branches
- Entering new markets
- Investing in new technologies
- Purchasing and upgrading equipment and machinery
- Fulfilling cash flow management needs
What are the different types of SME loans and their roles?
It is always a good idea to know your options before making decisions for your business. There are various types of small business loans designed to meet specific needs:
- Working capital loans (for daily operations)
- Machinery/equipment loans (for purchasing or upgrading machinery and equipment)
- Business expansion loans (for growing existing businesses to new heights and increasing profits)
- Invoice financing (for advances on pending invoices to improve cash flow)
Other common types include term loans, trade finance, and credit line/overdraft facilities. The government of India also offers various SME business loan schemes.
What are the features of SME loans?
No collateral? Not many years into business? No problem. NBFCs such as Manba Finance offer small business loans in India and believe every business has the right to rise and thrive. That’s why they ditch the strict rules and regulations to make borrowing funds accessible to all. The attractive features of SME business loans include:
- Flexible loan amounts
- Customisable repayment tenures
- Quick loan approval and disbursal
- Affordable SME loan interest rates
- Minimal documentation requirements
- Completely collateral-free
If you choose a small business loan from Manba Finance, you can get ₹75,000 to ₹ 10 lakhs within 4 days of application at a repayment tenure of up to 48 months.
What are the SME loan eligibility criteria?
Most financial institutions offering SME loans keep easy eligibility criteria to support maximum business owners with their expansion goals.
- Type of applicant: Self-employed individuals, sole proprietors, and partnership firms
- Age of applicant: Minimum 25 years (for borrowing loan), Maximum 68 years (for full loan repayment)
- Business continuity: Minimum 3 years
- Business proof: Banking and cash flow
- Credit report: Good CIBIL score, no negative items
What is the SME loan interest rate?
When it comes to interest rates on small business loans in India, lenders typically prefer a case-by-case approach. They assess each application separately and provide individualised loan solutions with favourable interest rates.
Factors that can make you a good candidate for low interest rates include:
- Having a high credit score
- Providing all the required documentation
- Opting for lower loan amounts and shorter tenures
Apply for an SME loan for your business today
SME business loans are not as complex as you had imagined, right? Here’s a bonus tip: the key to having a seamless loan journey is finding the right financial partner. Manba Finance has helped many small business owners in India turn their visions into reality. You can be next if you take action today—apply online or contact us for further information.
