Around 55-60 million MSMEs are currently operating in India. This sector is a significant contributor to the GDP as well as national employment.
Roughly 40% of this sector avail business loans from informal sources rather than formal ones. This scenario is set to change with the emergence of digital lending processes.
It is estimated that by the year 2023, MSMEs will borrow around Rs.6-7 lakh crore per year. This will register a growth between 10 and 15 fold compared to the current status.
The unprecedented demand that has been noted in recent times is primarily due to the influx of digital platforms. These have made the entire loan application process smooth and hassle-free.
However, the benefits of business loans are also responsible for their demand. These make it a preferred option of borrowing among business-owners.
Benefits of a business loan
No end-use restriction
This loan can be utilised to fulfil any purpose related to your business. You can start a business with it or re-invest it in your current one.
Business loans are disbursed quickly compared to other forms of credit. Once you complete the application process and successfully meet the eligibility criteria, this loan is disbursed within 24 hours.
A significant benefit of business loan is that it does not require any collateral. This means you will not have to mortgage your business or personal assets to avail this credit.
Moreover, it eliminates the requirement for value appraisal of a property. Thus, it shortens the loan approval process.
This financial product offers flexibility in terms of the tenor. Thus, repayment becomes easy and affordable. The repayment tenor here is between 12-60 months.
The business loan documents that you have to submit are –
Apart from documents, you should be aware of other information you need to apply for a business loan.
Why is the importance of business loan?
Apart from its benefits, the importance of business loans has also played a role in increasing its demand. The MSME sector in India is considered as the backbone of the national economy. This sector contributes around 24.63% to the services GDP and 6.11% to the manufacturing GDP. Moreover, it contributes 33.4% to India’s manufacturing output.
In addition to this, this sector employs around 120 million India population. Therefore, the significance of the MSME sector in India is unprecedented. On the other hand, these MSME units depend largely on MSME loans to either start their operations or keep their business financially healthy.
Therefore, the rapid growth of this sector is also responsible for the increase of business loan requirement India.
Reputed financial institutions of the country like Bajaj Finserv offers Business Loans at favourable terms. You can avail a loan up to Rs.30 lakh at a competitive interest rate and flexible tenor.
Furthermore, the company also provides pre-approved offers that make the loan application process hassle-free and time-saving. This offer is also available on financial products like business loans, personal loans, etc. You can check your pre-approved offers by submitting your basic details.
Business loans provide the necessary financial backing to either set-up a business or support an existing one. Additionally, its features and benefits have made it a popular choice of credit among businessmen. Thus, an unprecedented rise in demand of business loans has been noted in recent times.