At present to every financial condition, the loan is the best solution. But, is it okay to take any type of loan offered by the banks?
In the present situation, starting or growing any business, whether it is small or big requires a big amount that cannot be arranged from a person’s savings. So, banks offer different loan schemes to help these businessmen grow without any difficulty. But, taking business loans under government schemes like MSME loans is found to be more beneficial for people struggling financially.
MSME loan scheme is considered to be the only solution to get out of financial conditions easily and here is why.
Offers Loan To Enterprises Of All Sizes
Under the MSME loan scheme, the government offers loans to all sizes of businesses like Micro, small, medium, etc. Depending on the size and turnover of the business, the loan limit is there. The loan amount can vary from as small as Rs 50,000 to Rs 5 crores, depending on the size and repayment ability.
But, as per the guidelines given by RBI, banks can offer MSME loans to businesses up to 10 lakh without the need for collateral, which can further be increased up to 25 lakhs depending on the financial position and track record.
Collateral Free Loans
While struggling to start a business or aiming to begin a source of income from a small business, MSME loans are there for your backing. Loans under the MSME scheme are offered to individuals without the need of depositing any collateral or security to the bank.
The sole aim of these loans is to assist the small businesses to start or boost productivity and hence this is the reason why the loan is devoid of any collateral submission. So, while facing problems with arranging funds, you can easily get a loan from the bank with no extra paperwork.
Flexibility
The MSME loan is more like the personal loans that are taken for a short period. The scheme is planned to help individuals to gain an upper hand while facing problems with funds. And as there is no long-term commitment, an individual can maintain the cash flow to import the available resources in time. Hence, this is a highly flexible loan scheme offered to small businessmen, which can be availed by doing MSME registration online.
Minimal Interest Rates
While facing financial problems in business, or running short of the balance to grow the business, no one wants to pay heavy interest rates to the bank. Hence, MSME loans are offered to these businessmen at low-interest rates to fulfill the scarcity of funds.
The interest rates offered are minimum, but that may get reduced more if the track record is good and credit score is better. There are some other factors as well that play a crucial role in bringing the interest rate down for an MSME loan.
Accessibility Of The Loan
Unlike other loan schemes by private and public banks, availing benefits of MSME loans is quick and hassle-free. To get the loan amount sanctioned, the time required is lesser than other loan schemes. There are a few banks that pass the MSME loan within 24 hours of applying for it. Moreover, the paperwork is also very minimal and doesn’t require multiple rounds to the bank. You can also avail of the online facility for MSME loans, where you access the loan details and account statement.
Multiple Banks Offer MSME Loan
MSME loan is a scheme, but the loan is offered by the physical banks out there. But, if you insist on getting the loan from any particular bank, then don’t worry, your bank is also on the list offering MSME loans. All the major banks in India like SBI, PNB, Andhra Bank, etc, are the lenders of MSME loans. But, the interest rate may vary between different banks. So, you can compare the interest rate of different banks, and apply for an MSME loan from the bank of your choice.
CONCLUSION
Fund problem is faced by many small or medium enterprises out there. But, the introduction of MSME loans has become an ideal solution for people struggling to arrange funds. So, if you are also facing the issue of money, then MSME loans are the only and best solution available now.
