Do You Own A Consultancy? There's A Financial Help Just For You!
The consultancy firm is an enterprise engaged in providing its services and they fall under the MSME category which is Micro, Small, and Medium-sized enterprises (MSME). They are rapidly growing and evolving.
In the service industry, usually the payments are not advance or prompt but the consultancy firm has to render its services irrespective of the availability of funds as that how a consultancy performs.
Owing to the lack of funds in this ever-growing, demanding, and price-competitive era, it becomes difficult for a consultancy firm to operate. Funds are mandatory for the firm to conduct their daily operation, sustenance, infrastructure development and growth.
To make the provision of funds for such firms, the Government of India and RBI has designed MSME loans.
What is an MSME Loan?
MSME loan is an unsecured business loan offered to MSMEs to conduct, operate, and grow their business. It is offered by several banks and financial institutions. While, in this advanced phase, there’s also a facility to opt for an online business loan.
Primarily, to apply and avail of an MSME loan, a firm has to register itself as MSME under the MSME Act.
Benefits of MSME loans for a consultancy firm:
1. Collateral-free loan:
Government of India understands the financial needs of MSMEs and therefore through MSME loans, they guarantee a business loan without collateral, making it the most favorable business loan as then the MSME do not need to make arrangements for collateral to pledge for a business loan.
Collateral is basically an asset against which the loan is borrowed from the lender (The bank or the financial institution).
2. Online business loan:
Processing of the MSME loans online has been simplified by the financial institutions. A firm is required to upload the duly filled application form with the loan requirement documents on the online portal. And within just a few clicks, they can apply for an MSME loan.
3. Simple and quick process:
The loan documentation requirements are the bare minimum which is easy for a firm to arrange. Also, the loan processing time is minimum owing to which the funds are disbursed within a day or so to the firm making it most suitable.
4. Interest Rate:
MSME loans are available at an affordable interest rate. This factor makes the MSME loan most exciting as the firms can be more focused on growing their business.
5. Financial Assistance:
Under MSME loans, the loan amount can vary from as low as INR 5,000.00. This is the encouraging factor for consultancy firms that have less financial needs to expand their business.
6. Customized offer:
Financial institutions based on the needs of the firm and their business plan can customize the loan plan and amount.
7. Loan repayment:
The loan repayment mode is flexible and a firm can choose to repay the amount either in bi-weekly/ instalments or monthly instalments. Also, the repayment tenure ranges from 12 months to 5 years but may vary from a financial institution to another.
8. Accessibility:
MSME loan account can be easily accessible online with just a few clicks wherein a firm can easily view the account statement, details of the loan sanctioned, etc. for which they do not have to connect with their financial lender.
9. Complete ownership:
Usually, small-sized firms approach venture capitalists/investor for loan fearing the tedious bank process, etc but in this case, they do not have much control over the funds allocated to them. They have to present each business idea to investors before assigning funds and this process becomes time-consuming and also a burden.
Here comes the benefit of MSME loan where a firm has complete control over the sanctioned loan amount, with no bothering from the financial lender.
To conclude the article, MSME loans are available easily at affordable interest rates and before choosing a financial institution, a firm should compare the various parameters of the MSME loans offered by financial institutions present in the market and choose the one which is most suitable for them.
Frequently asked Questions (FAQs):
(1) Who are eligible to apply for MSME loans?
Entrepreneurs, Start-up companies, Micro, small & medium enterprises, a company (be it private limited, limited liability partnership company, partnership or proprietorship from), etc. can apply for MSME loans.
(2) Is there any maximum loan amount that can be availed under MSME loans?
Yes, a maximum of up to 1 crore can be availed under MSME loans.
(3) Is SME loan the same as MSME loans?
Yes, both are same. SME stands for Small and Medium Enterprises whereas MSME stands for Micro, Small, and Medium Enterprises.
(4) Which are the MSME business loan requirements?
A good credit score is essential along with documents like an Identity Proof, an Address Proof, Business plan, Business registration copy, Agreement copy, ITR, Bank Statement copy, and passport size photographs.
(5) How to avail business loan in Delhi?
Delhi is the most developed city in India infrastructure-wise and many institutions are willing to offer online business loans to Entrepreneurs, MSMEs, a company, etc