In general, small businesses are prone to failure in their early stages. This isn’t always their fault, but in some cases, it’s unavoidable. Obtaining a business loan, particularly one for a small business in India, can be challenging. It’s not surprising that this is the case for loans for MSME when we dig a little deeper. When a small business seeks a loan from a bank or a non-bank financial institution (NBFC), it is commonly turned down. These businesses require a small loan amount, and banks and non-bank financial institutions do not believe they are profitable enough to justify the hassle and paperwork.
Because a newly formed or even an older small business lacks the collateral assets required to meet these requirements when they apply for a business loan. When it comes to lending to small businesses, it is not a no-man’s land. Many new Fintech firms, banks, NBFCs, and Business Loan Providers offer collateral-free loans for new businesses at a competitive business loan interest rate. FlexiLoans is a non-banking financial company that offers online business loan options to all SMEs and MSMEs in India. It provides collateral-free instant business loan options with competitive interest rates and terms.
Several businesses seek venture capitalists or angel investors to fund their projects when they cannot fulfil business loan eligibility criteria. It is, however, difficult to persuade these people to invest in any business venture. When you approach these venture capitalists without a complete business plan, you’re likely to be turned down. Getting in touch with a bank or a non-banking financial institution, on the other hand, is much easier. In addition, many angel investors seek a share of the company’s revenues in return for their investment. When seeking funds without taking on debt, business owners frequently lose sole ownership of the company.
How to Get a Business Loan in India
Most FinTech companies offer online applications for unsecured loans that can be completed quickly using a mobile app. Additionally, all necessary documents must be uploaded online, such as bank statements, previous loan statements, tax statements, business invoices, and KYC documents.
The paperwork needed to apply for an unsecured business loan is minimal. Borrowers must first submit scanned copies of their ID, proof of address, SPDC, and a cancelled check. To check your company’s history, some loan providers may require certification of business existence, bank account statements, and other relevant financial documents.
The online application can be used to process any business loan application quickly and easily. Assume the borrower meets all of the eligibility requirements of the business loan provider. In that case, the loan application could be processed much more quickly, and the loan amount could be approved immediately.
As a form of short-term credit, most loan providers offer unsecured business loans. The lengths of unsecured loans range from 12 to 60 months. This enables business owners to discontinue making long-term loan repayment EMI payments. Borrowers will find it easier to maintain a positive cash flow position due to the shorter loan term. Many business loan providers now offer flexible loan repayment options to make the repayment process as simple as possible.
Flexiloans offers Online Business Loans and financing options for MSMEs all over India. Here is the process you’ll need to follow to get a loan on Flexiloans :
- Complete an Application form that can usually be filled in under 5 minutes. The details, that can be filled in through the Flexiloans website or the mobile application that will be used to assess business loan eligibility for your business.
- Upload all required documents. PAN card, any address proof (rent agreement, driver’s licence, voter’s ID, ration card, Aadhaar Card, Passport), last six months current account bank statement, and Business KYC will be required (GST registration certificate, Shops and establishment certificate).
- This will be followed by a credit analysis. They will assess your company’s performance to determine how much and what interest rate you can borrow. The loan officers will work with you to fully comprehend the offer and make the best decision possible.
- Financial experts will work with you to complete the repayment process after the funds are deposited into your account. This process will be completed in under 24 hours with proper cooperation from the business owner.
You can see how advantageous an Instant Business Loan can be for your company, whether it’s a well-established or startup MSME. The interest rate on the loan amount may be higher, but the peace of mind it provides is worth it. Make certain that you weigh all of the benefits and drawbacks of a business loan and determine whether what the business loan provider is offering aligns with your business goals. Applying for a business loan in India makes sense if you are confident in your company’s progress and believe you can afford the high-interest rates.