The world of startups has been booming since 2016, and it has never been. According to 2022 reports from the Department for Promotion of Industry and Internal Trade (DPIIT), about 26 thousand startups existed. As of February 2023, the number of startups in India is 92,683. And there are 633.9 lakh MSMEs in India. 

 

Despite these statistics, have you ever realised what these businesses need to get established?

 

Well, money! 

 

Many people have started a business, but only some of these businesses last due to lack of capital. 

 

So, in today's article, you will learn how an MSME loan can reinvigorate your startup. Stay tuned! 

 

2 Effective Strategies MSME Can Adopt for Financial Growth this 2024

 

The need for capital among the MSMEs is even more noticeable from the commencement of the expansion. It all needed money. So, these two effective MSME loans can reinvigorate your startup for any financial growth. 

 

1. Introduction of Equity from Founders, External Investors, and Shareholders. 

 

In the past ten years, many new businesses have popped up in India, everywhere, from online shopping to education and payments. These businesses mainly got money from investors initially because banks wouldn't give loans to risky new companies. But when businesses grow bigger and make more money, they can finally get bank loans to expand even more without sharing the company with new investors.

 

2. Take Loans from Banks, Non-Banking Finance Institutions or other Lenders. 

 

Need money for your small business? An MSME loan is like a helping hand from banks or NBFCs. It's a loan for almost any small business, like a tiny shop, bakery, or even you, the freelancer!

 

Cover your business costs with loans from banks or other financial institutes. The bank might ask for something valuable like your house to secure a bigger loan, but usually, you don't need that.

 

The amount and interest rate depend on your business and its performance. 

 

Look into the challenges many startups and MSMEs face in finance and find the perfect way an MSME loan can reinvigorate your startup. 

 

Challenges Face by Startups and MSMEs in India to Acquire Loan

 

Are you facing issues in gaining access to the loans?

 

Have a look at the challenges many startups and MSMEs face when it comes to acquiring loans for their growth.

 

1. Credit History Challenge

 

Let me tell you, small businesses need more credit history compared to well-established companies. One main reason is that they need a proven track record, making securing funds from banks and other financial institutes hard. Moreover, money lenders see the need for more credit scores as a riskier investment.

 

2. Collateral Dilemma

 

Many small businesses struggle because they need more assets for collateral. Moreover, banks usually require loan collateral, creating a barrier for these businesses and limiting their financial potential.

 

3. Government Scheme Unawareness

 

Despite the Government's efforts to help small businesses with financing, many need to be made aware of these programs, which hinder their ability to benefit.

 

4. Interest Rate Challenge

 

Small businesses often need higher interest rates, making loan repayment difficult and restricting their investment ability. So, lenders usually consider them high-risk, making it challenging to secure initial financing.

 

5. Government and Private Initiatives

 

Recognising the many financial challenges faced by startups and MSMEs, the Indian Government and private sector have taken steps to address and ease these financial obstacles.

 

Financial Initiatives 

 

Financing your business can be challenging, so here's how an MSME loan can reinvigorate your startup. Find out! 

 

1. CGTMSE

 

Like having a safety net, this program makes it easier for banks to lend to small businesses by promising to repay most of the loan if the company can't.

2. PMMY

 

Need a loan to kickstart your business? PMMY offers up to Rs. 10 lakhs micro-loans, even without collateral. Think of it as a helping hand to get your dream off the ground!

 

3. Stand-Up India

 

This program empowers women and people from specific communities by offering loans up to Rs. 1 crore for new ventures. They even help you through the process, so you're not alone!

 

4. Beyond Government

 

There are also online lending platforms that use technology to quickly review your loan request and promptly get you the money you need!

 

Why You Should Take an MSME Loan?

 

Find out why you should take MSME loans. There are:

 

1. Keep the Reins

 

Unlike investors who want a say in things, MSME loans let you take control of the business you started. 

 

2. Better than Expensive Options

 

Forget sky-high interest rates of personal loans or maxed-out credit cards. MSME loans offer bigger bucks at friendlier costs for your business needs.

 

3. One loan, many uses

 

Need equipment, Inventory, or marketing muscle? 

 

MSME loans are flexible, allowing you to cover various expenses to fuel your growth.

 

4. Fast and easy

 

No mountains of paperwork! Get your loan approved in just a few days, not months, to grab that opportunity quickly.

 

Where You Can Use Your MSME Loans

 

Do you want to know how an MSME loan can reinvigorate your startup?

 

Find out where you can use these loans to help grow your small business in India. 

 

1. Stock Up

 

Need help keeping up with rising orders? Need more materials to make your magic happen? MSME loans can help you buy supplies without breaking the bank.

 

2. Get Bigger and Better

 

Are you dreaming of a new office, shiny equipment, or even some land for your expanding business? MSME loans can help you invest in long-term assets that fuel future growth.

 

3. Tech Time

 

Want to upgrade your website, embrace cutting-edge software, or build a killer app? MSME loans can finance those techie upgrades that take your business to the next level.

 

4. Spread the Word

 

Want everyone to know about your excellent product or service? MSME loans can cover marketing and advertising costs, letting you shout your story to the world.

 

5. Team Power

 

Need to hire talented people to take your business to the moon? MSME loans can help you build your dream team without burning a hole in your pocket.

 

Conclusion 

 

The Indian startup ecosystem thrives on resilience and resourcefulness. But like any journey, accessing finances can be a roadblock. This is where Mvikas steps in, India's first 5PL company. By streamlining procurement, logistics, and technology, Mvikas breaks down barriers for both buyers and sellers. Its wider market reach empowers small businesses across India, offering them a crucial B2B platform to grow and flourish.

 

 So, on how an MSME loan can reinvigorate your startup, Mvikas becomes the bridge between financial constraints and ambitious dreams. Facilitating more accessible access to resources and markets fuels the very engine of India's startup revolution.

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