In a developing country like India, Micro, Small and Medium Enterprises (MSME) contribute to one-third of the total GDP of the Economy. Hence the government has brought many measures to support MSME growth, of which MSME loans for new business.
Are one among them. Medium to small businesses needs a steady flow of funds to keep the momentum running. Every small business requires financial assistance at some point or the other, which is why lenders have understood this and brought up msme loan for new business to benefit small and medium enterprises. The extra funding is required for several reasons like expanding their offices, increasing staffing for purchasing pieces of equipment, R&D etc. But why are MSME loans perfect finance for small businesses? Let’s explore
Reasons Why MSME Loans Are Perfect Finance For Small Business
MSME loans for new businesses are tailored for supporting micro, small and medium enterprises. These loans are becoming the preferred choice of many entrepreneurs who are expanding their businesses. So here are some reasons why these loans are perfect for your small business.
- It Does Not Require Collateral
MSME loans are unsecured; hence you don’t have to keep your company or loan as collateral to avail these loans. It is because these loans are made so that the small companies cannot keep their assets as collateral which will affect company productivity. Hence MSME loans are perfect for small businesses as they are tailored for them.
- Affordable Interest Rates
MSME loans have affordable interest rates. The lenders offer reduced interest rates compared to other loans.
- Flexible Payment Tenures
The convenience flexible payment tenures bring to a borrower is unmeasurable. Flexible payment tenures help borrowers manage their debt efficiently. A comfortable repayment tenure offered by MSME loans helps one plan finances smartly. You can also avail the loans for shorter terms, making it easier for one to repay earlier when sufficient funds are obtained. You can avail of attractive repayment tenures that range from 12 to 60 months and opt for pre-closure of loans without additional charges when finances improve considerably.
MSME loans are usually granted for pressing business needs, and hence lenders sanction speedy approval of small business loans. The amount starts reflecting on your account within a day or two. Yi can also gain online access using the Fullerton Instaloan app that let you see your loan details and statements on the go,
- Retain Your Company Shares
Businesses usually look for capital from capitalists or angel funders for financial solutions that will, in turn, result in shared control of the assets. With MSME loans, one can repay once the business is back on track with the profits while you have complete control of your business shares.
Documents Required to Avail MSME Loans for Business
Applying for MSME loans is more straightforward and hassle-free and requires very little documentation. Documentation is even more straightforward with the Fullerton Instaloan app, where one can track their loan status from time to time too. So, there are few mandatory essential documents like:
- Pan card of the applicant
- Address proof of both the business and the applicant
- Income tax statements along with form 16
- Bank statements for proof of income
- The company’s income tax returns paid in the past two years and audited financial statements that show a profit for the same duration.
While applying for an MSME, understanding your requirements thoroughly and accurately will help you opt for the right provider and the right kind of loan. It will also ensure that your finances are taken care of in the long run. Access out tools like a business loan eligibility calculator to understand it. (Calculate your business loan eligibility)
You can calculate and plan tour business loan EMIs with the help of the Business loan EMI calculator to understand your monthly obligations and decide on the loan amount and tenure. Fullerton India is here to serve you with the best financial solutions. You can always get in touch with our team through phone, chat or email. We offer non-collateral loans for businesses up to 50 lakhs. For loans above 50 lakhs, we offer loans against property.