Benefits of MSME Loan & How To Apply For One?

There are 40 million-plus registered and unregistered MSMEs engaged in numerous sectors, such as manufacturing, IT, food processing, and packaging. The MSME sector is one of the significant contributors to the economy of the country. It almost contributes 40% to the country’s GDP. Acknowledging their contribution and importance for the economy, the government has started several schemes and initiatives like ‘Make In India’ as a motive to encourage more MSMEs to become an essential part of the country’s growth.

MSME loans are also a way to help small business owners financially. It is a credit facility that helps the borrowers to meet the financial business obligations and take it to another level.


Running a small business in the economic scenario of our country is quite challenging. Due to seasonality in various factors and product/service demands, there can be times when a business has surplus funds and when spending even a single penny can make a huge difference. During the latter situation, funds are required on an urgent basis or else it can hit the business hard.

Availing an SME loan is a straightforward and hassle-free task. Not a lot of time is taken in disbursing the funds, and the documents required for the loan are also minimal. The loan processing time is also fast – the application is approved, and the funds are disbursed in just three days. Besides, the borrowers get an online application where they can choose between various loan offers, apply online, and even submit the documents.

Full Control

A small owner needs to arrange for the required funds while operating the business. He needs to manage the business operations and at the same time, look for various means of arranging funds as procuring funds is not an easy task. The other sources of getting access to funds are angel investors and venture capitalists. However, in return for funds, they seek control in the company, which is not the case in business loans.

A small business owner may not want to give up control over the business. So, MSME loans are uniquely designed to meet these kinds of requirements. In addition to being an ideal source of financial assistance, they are the best option for business owners who want to avoid liquidation of business control.

Reduced Rates of Interest

In the business world, a business owner is said to be at the best better business position if he has a lot of money in hand. Thus, MSME loan schemes with competitive interest rates ensure that a borrower gets maximum profit from the financial assistance at the most competitive/affordable cost. The loans also have no prepayment charges with a low processing fee.

No Need for Collateral

To become eligible for MSME loan, the business owners don’t require to hypothecate asset or provide security. The business nature of small businesses is that business owners cannot afford to provide collateral/security.

In a nutshell, small businesses are generally not in a position to pledge their valuable resources as it may affect their business productivity as well (in case something goes wrong). Thus, collateral-free MSME loans are an ideal source of funds in case financial need does arise.

Commitment for a Short-time

MSME loans are generally availed to meet short-term requirements of a small business. The arrangement provides some amount of flexibility as well as there is no need for long-term commitment on their part. Having short-term commitment allows the borrower to manage the cash flow of the business effectively and allocate the available recourses efficiently.

The benefits of MSME loans mentioned above clearly state that it is the best loan product for small businesses. It is effortless for a small business owner to avail a loan for MSME. Just visit the website of the lender, fill the online loan application form, and upload the pictures of the required documents. The lender will contact shortly to help in the loan application further.

Rashmi Sharma

Rashmi with you to ensure you and your business future. She also emphasizes the need to adjust investment plans as your goals and needs change.