SMEs In India: How Do Short Term Loans Help You Advance

When you’re an SME, running a successful business depends largely on your access to cash. This not only helps cover day-to-day operating costs, but is also immensely beneficial in your expansion and growth plans.

Unfortunately for SMEs in India, most lenders require documentation and a lot of verification before they sanction a loan. And then again, it doesn’t happen quickly enough, and the loan amount isn’t as much as you’d like it to be. When you need access to quick cash, you need a financer who can keep pace with your growth and business plans, and fast-track your loan application.

Have you considered a short-term SME loan? It is quick, convenient and comes with a host of advantages that other outside investment options don’t offer.

  1. Increase In Working Capital

Money coming in from sales often gets put back into the business as investment towards daily inventory purchase, paying overheads, rent, salaries, etc.

Even if a business has expansion plans, not always having additional capital puts those on a backburner. There are enough fires to fight daily. Taking a short-term SME loan eases the pressure off working capital considerably. With the additional capital, a business can consider purchasing more inventory to increase its output and, consequently, its reach. New or extra machinery can also be added to the business immediately opening up the operations to greater output.

  1. No Profit Sharing

When a bank rejects an SME’s loan application, many entrepreneurs turn to raising funds through equity. This is not always an appropriate decision, since it means the business has to share its profits with the investors. If that wasn’t bad enough, entrepreneurs often have to comply with the stakeholder’s say in the operations of the business. A lender has no stake in your business and once you make your last payment, the relationship is over.

  1. Acquisition And Takeovers

Now that your business is successful and you are on your way to achieve more, have you given any thought to buying another business? It could be in the same business space as your enterprise or it could simply be a way for you to diversify.

You don’t need to invest your hard working capital for this. You can apply for and avail of a short term loan to acquire a new business. Many lenders consider this as part of normal growth for SMEs and are willing to finance this move. The newly acquired business is an excellent way to widen your reach and expand to new geographies and new customers. As with any debt, there are a few risks, but with the right planning, a short term loan can be to your advantage.

The lending and borrowing market today has many players who will back an enterprise that shows determination and has clear expansion and growth plans. A short term loan has a simple application process, offers quick approval and disbursal, and often there are no prepayment charges either. The clincher in favour of a short term loan is that these SME loans are more often than not collateral free loans.

Bring your expansion plans to life. Opt for a short-term business loan today.