Home Business Why Taking an MSME Finance Makes More Sense than Liquidating Your Savings

Setting up a business, even if it is a small or medium scale one is an expensive affair. Though you might have the best business plan and strategy laid out, convincing investors to put their money in your business can be very challenging. Most entrepreneurs, thus, end up self-financing their business in the initial days.

The most common source of self-financing is using your savings. However, it has its own set of limitations.

Limitations of financing your business with your savings

  • You will have a limited amount of savings in your fund
  • You may need to compromise on corpus for your future financial goals
  • You may be unable to fund for your emergencies since money is invested in the business
  • After you liquidate your savings, rebuilding them again would take time
  • You might have to break investments or keep collateral

Looking at these aspects, as an entrepreneur or Micro, Small and Medium Enterprise (MSME) business owner, how can you fund your business? One of the leading ways of doing so is availing an MSME loan. An MSME loan could help you fund your micro, small and medium scale business in a short duration. The process is fast and easy with minimum documentation and flexi loan terms. Through MSME loans you can finance your business idea on convenient terms without digging into your hard-earned savings.

Benefits of MSME loans

Let’s look into the reasons why taking an MSME finance makes more sense than liquidating your savings.

Avail a loan without a collateral

While you are still struggling to finance your business, looking for a collateral is an extra burden. Thankfully, you can avail an MSME loan without a collateral. This way, you need not pledge your personal assets to take a loan. Without a collateral, the loan process is quick and you can finance your business in a short time. You can apply for a collateral-free MSME loan with Bajaj Finserv with a loan limit as high as up to Rs. 30 lakh.

Choose from pre-approved offers

Various banks and financial institutions provide pre-approved offers, which make the process of availing a loan easier and faster. Bajaj Finserv brings you pre-approved offers for personal loans, home loans, business loans and a host of other financial products. Not only does this simplify the process of availing financing, but also helps you save on time. All you have to do is share a few basic details and check out your pre-approved offer.

Easy eligibility

Once you fulfill the MSME loan eligibility, you can avail the MSME loan hassle-free.  The loans have easy eligibility criteria, where you can apply for the loan with very few documents. To avail these loans you have to be between 25 to 55 years of age. Your business should have the average vintage of 3 years to ensure its credibility to repay the loan back. You also have to show your income tax returns for at least a year.

Get attractive interest rates on the loan

MSME has a significant role to play in the country’s development. To encourage the setting up of MSMEs, loans are offered at attractive interest rates. Moreover, the government through its schemes like Mudra loans offers easy and convenient loans at low-interest rates. MSME loan interest rates are generally much lower than other personal loans to encourage small-scale entrepreneurs.

Repay as per your convenience with flexible tenure

It takes a while for businesses to generate profit. Until then, it is difficult to repay the loan amount in a short time. MSME loans offer flexible tenures. These vary from 12 months to 60 months. You can choose the tenure according to your repayment capacity. It provides you with ample time and then you can repay the amount accordingly.

To sum up

Your savings are the best backup that could be used for emergencies or when you need it the most. As for your business needs, looking at its various benefits, MSME loans can be a dependable option. You can avail them from your nearest bank or from lenders like Bajaj Finserv, who offer attractive pre-approved loans with minimum documentation and at attractive interest rates.