Small and medium-scale enterprises find it very challenging against the MNCs and other powerhouse competitors, especially when it comes to financial backing. However, there are many different financial and non-financial institutions present in the market to provide these small businesses with much-needed capital as well as credit loans. Earlier, all these businesses had to rely only on banks or the informal source of capital in order to get a business loan, but the scenario has changed a lot in the past few years.

If you talk about the condition in the lending sector about 5-10 years back, an SME had only two options in order to get a business loan. The first option obviously was banks, which required a lot of documentation and paperwork. When banks didn’t approve their loan application, the only option left to them was the informal sector.

Getting a loan from this sector was easy, but it came with a lot of consequences. Since it was not regulated, the interest rates used to be almost double the market rates and instead of boosting the small businesses, these loans actually buried all these budding businesses under the weight of the heavy interest rates. This is where Non-Banking Financial companies, along with the other borrowing options, have come as a blessing for all the SMEs, allowing them to grow and flourish without any hassle.

instant business loan

Currently, there are a plethora of options that one can go for in order to get an MSME loan approved. Apart from the traditional banks, there are many different options like credit cards, online lenders, venture capital investors, and the Non-Banking Financial Companies (NBFCs). All these sources have different conditions and advantages as well as limitations.

However, when it comes to small businesses, recent trends have seen a heavy shift towards the NBFCs. NBFCs have managed to attract small businesses from different sectors across the country with its flexible and customer-friendly policies. Some of the popular advantages of getting a business loan from an NBFC are as follows:

Collateral-free Business Loan

When small businesses lookout for a business loan, they either don’t have an asset to offer as collateral against the loan amount or they are not sure of whether to risk that particular personal or business asset. Banks generally have this prerequisite of a collateral asset in order to approve any business loan.

However, Non-Banking Financial Companies, on the other hand, are very flexible and will approve your business loan even without a collateral asset, i.e., they offer unsecured business loans. This is a significant relief to all the budding small and medium-scale businesses.

Minimal Eligibility Criteria & Documentation

The business loan eligibility criteria to get a business loan approved from any NBFC is very standard and doesn’t require a lot of running around from one place to another. The documents needed to get your application verified is also pretty minimal, making the entire process a lot easier and smoother in comparison to that of banks.

All-online Process

We all know how troublesome it is to get even a simple job done in any bank, and when it comes to getting a business loan, the entire process becomes very hectic and time-taking. But with NBFCs, you can just do your research online, visit the website of your desired lender, fill in the application form online, and upload all the required documents. What makes it even better is the fact that the verification process doesn’t take a lot of time; your documents get verified within 3-4 hours.

How To Get A Business Loan?

Instant Disbursement of Fund

Once your business loan gets approved, the amount gets credited in your bank account within a few working days, so that you can use this amount to work as soon as possible. This is very beneficial, especially when a business is looking for instant financial support.

No Prepayment Charges

Another great advantage with these non-banking financial companies is that you don’t have to pay any extra charges if you want to pay back your loan before the maturity period after the payment of 6 EMIs. On the other hand, banks might ask for a penalty if you look to pay back your loan amount in advance.

Apart from the aforementioned advantages, there are a number of other benefits that the small businesses get from getting a business loan with NBFCs. Their customer-friendly policies have been very instrumental in helping the SMEs grow from strength to strength in recent years.

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