Complete Your Dreams of Becoming An Entrepreneur with A Business Loan

The main growth factor in India’s economic engine is now entrepreneurship. It has also significantly lessened the unemployment issue.

Young professionals with innovative business ideas are now launching their ventures by first taking out a small business loan to set up their operations. Since not all start-ups can obtain seed funding from venture capital and private equity (VC/PE) investors, many of them must take out loans. Thus, they are left with only a few options, such as bootstrapping or a loan for SME working capital.

When launching a new small business or growing its current operations, many businesses encounter a similar issue. Do you understand what the issue is? The ability to access capital to carry out their plans is the solution. We’ll see how business owners can resolve this issue below. One of the biggest obstacles to a great business idea is always money. The founders have a business concept and a strategy in place; all they need now is the funding to carry out their plans. These founders can choose from a variety of MSME loan options in India.

However, to make things easier for you, we have compiled a list of some crucial financing strategies that will help you in accessing finance.

  • Flexible Tenure: Nowadays, lenders give borrowers the option of selecting the loan’s term based on their cash flows. A working capital loan is an option for borrowers looking for short-term loans. You can take out a loan with a longer term (5–10 years) if you need money for a long period.


  • Financial independence: If you approach a VC/PE investor as a start-up seeking small business loans and choose to support your idea, they will meddle in your company’s daily operations. The bank or NBFC (Non-Banking Finance Company) will, however, give you complete freedom to use it if you take out online business loans, without any interference. When it comes to them, only timely repayments are important.


  • Convenient Application Process: Nowadays, everything is done online, including the loan application and full repayment. You won’t need to frequently go to the bank’s branch. From your office, you can quickly and easily apply for an MSME loan. You can submit all the required paperwork for the loan online.


  • Low-Interest Rates: Currently, interest rates on SME working capital loans are quite low due to the presence of more lenders in the market and the government’s focus on fostering entrepreneurship. However, depending on his credit profile, the business loan  interest rate does differ from one customer to another customer (CIBIL rank).


  • No Profit Sharing Agreement: A VC/PE investor will only provide funding if he will receive a portion of your quarterly or annual profits. In contrast, when a business receives loan financing, there is no such agreement. Simply make monthly EMI payments to cover the amount you borrowed in this case. You can use one of the many EMI calculators that are available online to determine the monthly obligation you will have.


  • Unsecured Loan: An unsecured loan is one for which the borrower is not required to put up any of his assets as security to obtain the loan. Since many small businesses and start-ups typically do not have many assets at first, the best small business loans are those that do not require collateral.


  • Quick Sanction & Disbursal: The lender will review your application and decide whether to approve or reject it the same day after you submit the SME working capital loan application form online and upload the required business documents. The loan is approved and disbursed by the lender on the same day.


  • Loans with Low Credit Scores: You can also apply for a working capital loan if the creditworthiness of your company (measured by its CIBIL rank) is insufficient. Loans for people with bad credit are widely available from NBFCs. A loan can also help your credit history if you pay off all of your installments on time.


  • Make a loan application for a government program: The Indian government has introduced several loan programs to help new businesses, SMEs, MSMEs, as well as women business owners, educated youth, SC/ST individuals, Small Scale Industries (SSIs), villages, people living in rural and urban areas, etc. The MUDRA loan program under the Pradhan Mantri Mudra Yojana (PMMY), Start-up India, Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE), Stand-up India, Atal Innovation Mission, Make in India, etc. are just a few of the small business loan programs launched by the Indian government to aid new businesses.



It’s crucial to understand your company’s ability to repay before applying for an MSME loan on any lender’s website. This is because if the lender rejects your loan application due to your poor credit ranking, it will further damage your credit rating. If this occurs, your future chances of being approved for a loan will decrease even more. On the other hand, if your credit standing is excellent, you can bargain with your lender for an MSME loan for a small business interest rate that is lower.

About Maria James

Check Also

Unleashing Digital Potential: The Power Platforms Odyssey

Unleashing Digital Potential: The Power Platforms Odyssey

In the vast expanse of the digital universe, Microsoft’s Power Platforms emerge as the cosmic …

Leave a Reply

Your email address will not be published. Required fields are marked *