msme

What is an MSME Loan, and What Can it be Used For?

MSME stands for Micro, Small, and Medium Enterprises, and MSME loans can be said to be the form of loans that allows individuals, MSMEs and startups to get a loan for their financial needs. Most businesses avail these loans to meet their working capital needs, boost their cash flow, or even expand. Therefore, several institutions have provisions for MSME loans.

While most institutions require collateral for the business to be approved, some lenders provide MSME loans without collateral. Since most customers avail of loans to facilitate their businesses and boost their capital, the MSME loans without collateral are preferred because they provide affordable interest rates that make the payment cycle easier. Furthermore, these loans are usually short term loans that have to be repaid within 12 months. However, depending on the business needs, the loan repayment tenure can extend up to five years. The MSME loan procedure is relatively simple, and the eligibility depends on the applicant’s profile, repayment ability, financial stability and creditworthiness. 

The MSME sector is crucial to the country’s economy and employs a significant portion of the population. Therefore, it is essential to provide all necessary support to advance these businesses and provide assistance whenever required. The MSME loan procedures are in place to allow these businesses to flourish and grow without much hindrance. In a broader sense, these loans allow the companies to operate without the fear of bankruptcy. These loans can be used to consolidate debts, make business expansions, invest in new markets, and manage stocks.

Must Read: When Should We Take SMEs/MSMEs loan- [September 2021]

Take MSME Loans To Finance Your Small Business

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Small and medium sized firms contribute almost 38 percent of our GDP. Do you realise their huge potential?  So if you are planning to start a small business, do not get discouraged.

But you need to have your finances in place. How will you fund your business? Taking an msme loan can be a good idea.

Benefits Of Taking MSME Loan

  • Low interest rates

Micro, small, and medium enterprises registered with the government of India can apply for MSME loans. You will have to pay a significantly low interest compared to other loans. You can use the money saved on some other fruitful investment.

  • Income Tax Benefits

An  MSME loan will reduce the taxable income of your company. Hence, you can save a lot on your tax payments. Isn’t that great?

  • Full Control Of The Business

When you approach an investor, they will ask for a share in your business. However, taking an MSME loan will give you full control of your business. It is crucial as an entrepreneur to take your business decisions independently. MSME loans will guarantee that.

  • Different Options To Choose From

You can get different types of MSME loans in the market. You can opt for one depending on your needs and risk taking capacity. Loans are available to start a business, expand it, or to buy equipment.

Fullerton India offers MSME loan for new business. Your application will get approved within a couple of days. Moreover, you will get super low interest rates.

So, why are you waiting? Visit the Fullerton India website now and start planning to boost your new business.

Must Read: Here’s How to get MSME business loan approval in 59 minutes?