In recent times, small and medium enterprises have witnessed tremendous growth, not only economically but also in terms of competition. With more small and medium businesses bringing innovation to the tables via new strategies, many banks, NBFCs, and other such lenders, have rolled out various loan schemes to help fuel their growth.
What does the Festive Season Hold for Businesses?
Festivals bring a host of new opportunities for businesses. However, it is also when entrepreneurs can go ahead with their plans of establishing new ventures, as the festive season always has something of value to offer to small businesses.
In recent years, small businesses have stormed into various sectors, including retail, e-commerce, and hospitality. While these sectors, undoubtedly, benefit significantly from festivals, individual business owners still need to assess their impact. The following sections will tell you how festive seasons affect businesses across different sectors.
The retail sector is almost always at its peak during the festive season, owing to a rise in demand for various electronic gadgets and other products available at huge discounts. Such increased demand ramps up profits and allows small firms to boost production.
The festive season significantly impacts the e-commerce sector since it is competitive, and big and small players look to increase sales here.
So, getting financial backing helps cover expenses arising from the production process.
Hospitality is yet another sector affected profoundly by the festive season. As festivals approach, the holiday season kicks in, and hotel and restaurant businesses witness staggering growth, especially with their customer load.
So, it makes sense for entrepreneurs in the hospitality sector to get an SME loan that can support their business when they may have unimaginable customer inflow.
Benefits of Getting a Small Business Loan During the Festive Season
Small businesses can benefit significantly from getting a loan as it helps drive sales, especially during the festive season. The most apparent advantage of getting a small business loan is sales optimization. These loans provide the much-needed financial aid that SMEs seek to maximize their outreach during festivals.
Likewise, there are various other benefits of getting a small business loan during the festive season, including:
- Small business loans help SMEs expand their product lines, and seek tax exemptions and other such benefits during their tenure.
- Besides tax benefits, SMEs can also get cash benefits through the referral programs that many lenders offer during festivals.
- Small business loans available during the festive season allow owners to buy more equipment and machinery and expand their production, not to mention business assets.
- If pledging assets is troublesome, owners can get unsecured loans that don’t need any collateral and meet their short-term goals during the festive season.
- SME loans also come with a short and simple application process that involves no collateral and minimal paperwork.
Also Read: Evolution of SME Lending In India
Documents Required for Getting a Small Business Loan
Though small business loans or SME loans have a simple application process that does not involve collateral, as an owner, you must still submit a set of documents as part of the paperwork. The documents that you may need include:
- Identification proof: Voter ID, Aadhaar Card, PAN, or Driver’s License.
- Residential address proof: Voter ID, Aadhaar Card, or utility bills (electricity bill, telephone bill, etc.).
How to Get a Small Business Loan During the Festive Season?
The process for applying for a small business loan involves several steps. However, as an entrepreneur, you must consider several things before getting an SME loan during the festive season.
Business owners must first chalk out a plan covering all they hope to achieve during the festive season. The plan should have clear-cut goals incorporated into the sales strategy.
Choosing a Lender
Almost all lenders, including banks, and NBFCs, will have various schemes during festivals. The only difference is that reputed banks and financial institutions may have more stringent policies regarding these schemes. Nevertheless, entrepreneurs must choose lenders or plans keeping in mind their business objectives. Moreover, they may also need to consider other aspects, such as market risks, interest rates, and additional or hidden fees.
When applying for a small business loan, entrepreneurs should also note the documents required for processing their application. Many lenders reject loan applications due to a lack of or inefficient documentation.
Thus, you can apply for a small business loan as soon as you are ready. There are two ways to do this, including the offline and online methods.
1. The Offline Method
The offline method of getting a small business loan involves:
- Heading over to a bank, NBFC, or other lender or financial institution.
- Filling and submitting the application form required to process and disburse the loan and the necessary documents.
- Waiting for the verification and approval of the loan.
2. The Online Method
Applying for a small business loan online may entail:
- Deciding on a scheme and lender.
- Visiting the lender’s official website and choosing a loan scheme.
- Enter the credentials and submit the loan application and the required documents.
- Paying the fee required for processing and verifying the loan application.
- Waiting for the loan to be approved, processed, and disbursed.
Also Read: Udyam Registration Online For MSME’s
Applying for a small business loan may be a smart way to boost sales during the festive season. However, many business owners may also resort to other tactics, including laying out and implementing a solid action plan and offering attractive discounts through advertisements. Thus, while getting an SME loan may be one of the best ways to increase sales during the festive season, these methods should also suffice for most entrepreneurs.