What Are the DifferentTypes of SME LoansOffered in India?

What Are the DifferentTypes of SME LoansOffered in India?

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Micro, small, and medium enterprises (MSMEs) and small and medium enterprises (SMEs) contribute significantly to India’s Gross Domestic Product (GDP). They employ a high percentage of the workforce. The government understands the importance of these businesses, and therefore, offers different types of loans for their sustenance and growth.

In addition to the government, financial institutions like Mahindra Finance provide these businesses with various kinds of loans, like:

Credit and loan solutions

The funding options in credit and loan solutions are:

  • Project and equipment financing

You cantake a loan up to INR 40 crore to fund large industrial or infrastructure projects. If you want to purchase equipment, you may avail of equipment finance.

  • Corporate loans

These business loans are customized to suit the specific needs of your venture. You can borrow up to INR 25 crore to meet the financial requirements of your business.

  • Secured business loans

Such loans are available to expand your business. The loan amount depends on the value of the property. These loans have a duration of up to seven years, ensuring you can repay the borrowed amount without any financial difficulties.

  • Lease rental discounting

You may monetize your leased properties with this type of SME loan. You can seek funding up to INR 25 crore. This loan alternative has a repayment tenure of up to six years.

Liquidity solutions

The different forms of financing methods under liquidity solutions are:

  • Short-term loans

These are available for up to one year. You can borrow funds up to INR 25 crore. This facility is an ideal option to meet the short-term working capital needs of your business.

  • Bill discounting

You may reduce the cash cycle of your business by discounting bill receivables from reputed customers. You can avail of an amount up to INR 40 crore against this facility.You may utilize these funds for working capital or other business requirements.

  • Revolving short-term loans

Under this type of MSME loan, the lender sanctions a limit, and you may withdraw any amount during the year as per your requirements. You can repay each amount that you draw after two to three months. Revolving short-term loans are an excellent option to meet high inventory demands.

Government solutions

Under the MUDRA scheme, the Government of India offers three options, which includeSishu, Kishor, and Tarun, depending on the SME loan eligibility. The loan amounts under these alternatives are INR 50,000, INR 5 lakh, and INR 10 lakh, respectively. You can research the different options and choose the one that suits your needs. Check the terms and conditions, repayment tenure, and SME loan interest rates to make an informed decision.

If you are looking for a variety ofSME loanoptions, visit the Mahindra Finance website.

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