Need for SME Lending & Financing
Business loans are very pertinent for a business to grow in size and reap more profits than what they are making currently. These capital investments are a significant problem for SMEs in India as they have a dearth of free cash available with them to invest, thus they look for business loans. There are several SME lending options available in the market to get a business loan approved in less time and at lucrative interest rates. Let’s look at some of these SME lending options in detail,
Best SME Lending Platforms in India
This is an application-based loan seeking platform providing a personal line of credit up to five lacs without any collateral or guarantor. This is a good SME lending option as here you can withdraw as low as INR 3,000 and as high as five lacs and the best part is you have to pay interest only on the amount borrowed. The repayment is as flexible as the platform itself with EMI options of two months to 36 months from the app itself. You can get a marriage loan, education loan, vehicle loan, travel loan, consumer durable loan and many such categories.
It is an online lending platform in the MSME space, providing them access to quick and flexible business loans helping them in their growth. This again is a collateral free loan with minimum documentation and quick disbursal. They follow a simple four steps process which is: Fill the online application, upload documents, credit analysis done by the company and disbursement. The loan amount is in the range 50,000-1 crore with a tenor of six months to a year.
An NBFC registered with the RBI, this is more of an SME lending platform which recently got an ISO certification (ISO 9001:2015). They have doorstep service with minimum documentation and customized repayment options. They have products in retail finance and supply chain finance in their portfolio with over $650 million disbursed since 2013. Their NeoCash product is for online and offline retailers in search of innovative loan products and NeoCash Express for SMEs with loan amounts between 3-8 lacs with a tenor of 500 days for SMEs with a history of two years or more.
Another viable option when it comes to SME lending, it acts as a bridge in connecting the lenders fetching higher returns and borrowers in search of short term loans. The usual time taken to get the loan approved ranges from an hour to 18 hours. There is a registration fee to be paid upfront, which is refundable if you don’t get the loan, but that is a rare occasion as there are multiple lenders registered on this peer-to-peer (P2P) lending platform. They use artificial intelligence to assess the creditworthiness of the borrower and leverage immensely on technology to reduce the processing time.
ZipLoan is another such NBFC registered with RBI in the lending space to small businesses to meet their day to day funding requirements. They generate the unique score known as ZipScore for each borrower which is a credit risk assessment tool that helps to automate credit decisions. They provide an unsecured (collateral free) loan up to five lacs in the minimum time possible (maximum three days) with no prepayment penalty. They follow a simple process of applying online with uploading basic documents, signing the loan agreement and receive funds in three days. There is an EMI calculator on their website/app for you to calculate your EMI based on the loan amount, tenor and interest rate.
There are many more such SME lending platforms/online P2P lenders in the likes of CoinTribe, Happy Loans, Lendbox, Shubh Loans which promise a unique experience of availing funds to grow their business. All these lending platforms provide a seamless experience to a borrower owing to their supreme services like lucrative interest rates, options to choose from lenders, minimum documentation, no collateral etc. Leveraging on innovation and AI-driven technology is what is driving this entire lending space in assessing the credit risk, making it a win-win situation for borrowers, lenders and the platform. Going forward, these online lenders will get more business with increasing SMEs and their expansion especially after the Make in India initiative by the government of the day. Investing in new projects, setting up a factory, starting a new business requires capital investments which can be sourced from an online lending platform like Indifi.