How SME loans can benefit your business

SME business loans are committed to providing small and medium-sized enterprises (SMEs) with monetary assistance required for their successful operation. Even though these enterprises contribute up to 8% of India’s overall GDP, they often end up compromising on their growth plan and ambitions due to low funds. Most businesses try obtaining funds from formal credit channels, but many aspects discourage banks from approving loans such as improper documentation, questions regarding business profitability, short-term business cycles, and much more!

However, SME business loans have been life savers for such enterprises. These SMEs do not need to encounter a rigid tenure for a small business loan’s repayment. An elastic 12 to 24 months repayment time makes it a convenient financing option for such owners. An SME business loan can be repaid in any mode convenient to the owner, be it an electronic fund transfer or monthly EMIs on the lenders’ website. The EMI payments of SME business loans had also been cushioned with a three-month moratorium period to relieve the COVID-19 impact on businesses. Let’s see some other reasons how SME loans can benefit businesses.

Financing Flexibility

With a business loan, the SME keeps the entire control over the business. This is very important to a startup where until it has established itself in the market, there lies no problem with the decision making process. With other forms of funding such as angel investing and venture capitalism, the owner forgoes control, making decision making more complicated. There are various types of loans that can be used according to the business requirement. Invoice discounting for receivable bills, secured or unsecured business loans, funding working capital requirements with a working capital loan, taking merchant cash advances if the business has a high volume of card payments – there are many options to choose from.

Convenient Repayment

The flexible nature of SME business loans also exhibited in the repayment options. NBFCs like ftcash cooperate as they understand the difficulties involved with businesses and their loan plans are also made accordingly. They offer different repayment plans to avoid difficulties in financial management. Many financial institutions also offer different repayment options such as regular EMIs, bullet repayments and much more, making the loans quite flexible.

Low Rates of Interest

Non-banking financial business loan providers like ftcash work to provide lower interest rates. With unsecured loans, they provide interest rates as low as 1.5-2.0%. This is possible as they provide repayment options like pay as you earn. Apart from processing fees which are a one-time payment, lenders work out interest rates based on a number of factors like the loan repayment period, how viable the business model is, the credibility of the owner and the financial situation of the company.

Tax Benefits

SME business loans allow owners to benefit from tax-exempts as well. This is possible as a certain amount of profit which is used to repay the loan is the amount which is exempt from taxation.

Easy Availability

Various private lending institutions offer small business loans without collateral. This helps small business owners to relieve immediate cash flow problems. Also, EMI calculators and online business loan applications available on their websites have made the process much easier than it used to be.

ftcash is a great example of such a financial institution which aims to provide cash flow to SMEs at its core. With zero collateral requirements accompanied by hassle-free processes, minimum documentation, and flexible repayment periods, ftcash aims to help businesses get SME business loans easily and with all the assistance they require in every stage of the operation.