The MSME (Micro, Small and Medium Enterprises) industry makes for a huge part of our nation’s economy, and it is of great significance to ensure these businesses receive proper help. While there are specific business loans in place for the same, there are still a lot of challenges in availing them.

These include: 

List out Challenges of Availing an MSME Loan

• Trust Deficit  

Lenders have a lack of trust when it comes to MSME loans. This is because they think these businesses have a low repayment capacity. Resultantly, the rules and regulations for getting this loan are much more stringent than others, which is an obstacle in the way of MSME’s.

• Lengthy Process 

As mentioned above, the rules for SME loans are stricter. This manifests itself into the documentation process and makes it tedious for business owners. Naturally, they hesitate to think of an SME loan as an option as most business owners require funding in emergencies. 

• Costs and Collateral
  A lot of lenders make SME loans secured, meaning, they require pledging of a collateral. This is not possible for a business that is just starting out and has limited assets. While there are some lenders that offer unsecured loans, the MSME loan interest rate automatically goes higher due to the lack of collateral. This again, is not viable for many businesses.  

To steer clear of these challenges and get a business loan at competitive interest rates and flexible repayment periods, turn to Fullerton India to not sacrifice the growth of your business due to a lack of funding.

Additional Read: Top Reasons Why MSME Loan is The Perfect Options for Small Business Owners