A small business owner often faces a liquidity crunch like situation while running his business. The situation of inefficient funds is inevitable, and no matter how the business owner plans for it, the situation is more likely to affect the business.This situation is something to be worried off. But the business owner can prepare for it in advance.
Every business owner puts in his efforts during the regular course of business. But the financial resources may restrict him to take advantage of the available opportunities. It is when he may feel liking availing a business loan. In these situations, the business owner cannot sit idle and let the competitors take a competitive advantage over him.
If the business owner has emergency funds or personal funds at disposal, he certainly can explore the options for his business. But if there are no such options, he can avail an MSME loan in India from the various loan lenders operating in the market.
Business loans are of various types. But the major two aresecured and unsecured business loans. Various financial institutions in India offer these two options. The loans so availed can be used for multiple reasons, such as for purchasing machinery or raw material, payment to suppliers, etc. MSME loans help the business owner get access to immediate funds in the situations of a cash crisis.
How have NBFCsbecome Best Option for Business Loans?
With the rapid integration of technology in the financial services sector, many FinTech Companies have emerged in the last decade. These companies have become the most sought-after choice of business owners looking for funding for the business. These FinTech Companies are specialised NBFCs and Online Lending Companies. They are technology-enabled platforms wherein the applicant can fill the loan application online. He can also submit the documents online.
Also, their eligibility criteria are very easy to meet. The NBFCs approve the application and disburse the loan amount within a few days. To be eligible for an NBFC business loan, the business should have filed an ITR of Rs. 1.5 lakhs in the previous year. The maximum amount that a business owner can avail from an NBFC is Rs. 5 lakh; their loan products are specially designed for small business owners. The loan amount can be repaid in a flexible repayment tenure, ranging from 12 months to 24 months.
In addition, the NBFCs are not only dependent on the credit score of the applicant. They have their independent credit evaluation process, where they assess the eligibility of the borrower holistically. This approach enables more SMEs to have access to formal credit. The NBFCs also offer loans for business at basic eligibility criteria. They only require the business to be at least two years old with an annual turnover of more than Rs. 5 lakh.
All these factors make NBFCs one of the best business loan lenders in India. From the online loan application to disbursal within a few working days, they are indeed the fastest lenders in the market.
