What is MSME Loan?
To understand what MSME loan is we must first understand what a MSME is. According to the Reserve Bank of India (RBI) the definition of MSME is as follows,
“(i) A micro enterprise is an enterprise where the investment in plant and machinery or equipment does not exceed ₹1 crore and turnover does not exceed ₹5 crore;
(ii) A small enterprise is an enterprise where the investment in plant and machinery or equipment does not exceed ₹10 crore and turnover does not exceed ₹50 crore; and
(iii) A medium enterprise is an enterprise where the investment in plant and machinery or equipment does not exceed ₹50 crore and turnover does not exceed ₹250 crore.”
As you are already aware, the full name of an MSME loan is a loan to micro, small, and medium-sized businesses. It is a facility where MSMEs, SMEs, startups, self-employed individuals, and other small to medium firms can receive a line of credit. An MSME loan is intended to cover daily business demands as well as those for business expansion. It’s a kind of unsecured loan given by banks or other financial lending institutions to help business owners achieve their objectives.
It is a loan type that aids businesses in obtaining a line of credit to meet their financial needs. It is similar to Payroll financing, which is also an unsecured loan offered by 1 Click Capital to organizations that are in need of payroll financing to pay salaries to their employees on time.
What are the benefits of applying for digital MSME loan?
Until recently, obtaining an MSME loan required a trip to the lender’s office. However, many lenders have digitized this borrowing procedure for their clients because to the banking industry’s growing adoption of technology. You can now apply for an MSME loan from the convenience of your home as a result. Applying online for a digital business loan has many advantages. Among them are:
- Paperless loan application process
You must provide the lender with a number of different paperwork in order to obtain any loan. However, one of the key advantages of digital loans is that the full application process may be completed without having to go through a time-consuming documentation process. This is so that you can submit all the necessary paperwork to the lender using the lender’s website when applying for a loan digitally. This makes it unnecessary for you to maintain a convoluted paper trail and streamlines the loan application process. If you don’t have digital copies of the necessary documents, you can also scan them and upload them in pdf or jpeg format to the lender’s website.
- Unsecured loan type
MSME loans, in contrast to typical business loans, are an unsecured type of debt. This implies that in order to get credit, you don’t have to give the lender any collateral. Because of this, MSME loans are among the easiest company loans to obtain in India. If secured MSME loans are what you’re after, numerous lenders also provide those. In order to perhaps lower the cost of getting the loan, you might offer collateral. The terms and conditions of the lender and your capacity to pay back the debt determine the best type of MSME loan for you.
- Quicker turn-around
The turnaround time is the time between submitting a loan application and having it approved. Your information must be gathered and verified by the lender throughout the earliest stages of the loan application procedure. When applying for a loan on paper, the process can take a long time. If you deliver the incorrect set of documents to the lender’s office, the turnaround time may be extended. With a digital MSME loan, however, you no longer have to be concerned about submitting the incorrect set of documents because all the necessary information is made available to you on a single page. Additionally, the digital loan application streamlines many internal procedures and makes it simple for the lender to review the data you have provided. Every minute counts when running a business. You can use the time you save on drawn-out loan application procedures elsewhere.
- Convenient loan application process
You can start your loan application procedure without physically going to the lender’s office, which is one of the main advantages of digital MSME loans. To apply for a digital business loan, all you need is a reliable internet connection and a phone. It only takes a few clicks to finish the online application procedure. In addition, unlike the paper-based loan application process, you can apply for a digital MSME loan whenever and whenever you choose.
- No physically visiting lenders office
You can start your loan application procedure without physically going to the lender’s office, which is one of the main advantages of digital MSME loans. To apply for a digital business loan, all you need is a reliable internet connection and a phone. It only takes a few clicks to finish the online application procedure. In addition, unlike the paper-based loan application process, you can apply for a digital MSME loan whenever and whenever you choose.
1 Click Capital now offers you online msme loan as well as working capital loan in Mumbai, so you can get quick access to a line of credit when in need. All this is offered at a low cost EMI with minimal documentation and zero processing fees. So visit our website: https://www.1clickcapital.com/ to know more or get in touch with our financial experts today
