There has been a significant rise in the number of small businesses in the country. Hence, the expansion of Small and Medium-sized Enterprises (SMEs) have contributed majorly to the growth of the Indian economy. Learn about the SME loan meaning and guide for finance markets.
A large number of entrepreneurs are coming up with innovative ideas in order to establish their own startups. Apart from an innovative idea, the other major aspect needed to successfully establish and run a business is the availability of working capital. But it has been observed that entrepreneurs find it difficult to avail credit on time. The lack of funds can affect the cashflow of the organization, thereby hampering the efficiency of the business.
With a large number of financing options available in the market, entrepreneurs get the opportunity to compare various business loan offers and settle for a deal that best suits their needs. However, entrepreneurs must remember that there are a number of factors that impact the disbursement time of small business loans. Also, the disbursement time might vary from one credit product to another. Hence, while applying for a small business loan, entrepreneurs must take all the required measures to reduce loan disbursement time.
Below are a few tips that can help the entrepreneurs reduce the disbursement time of small business loans:
Lending Institution
Entrepreneurs can avail credit from banks and other NBFCs. Unlike conventional banks, NBFCs make use of digitization and other financial technologies to accelerate the process of approval and disbursement of small business loans. Also, the disbursement time of small business loans might differ from one lender to another. Therefore, it is recommended that entrepreneurs should make the choice of financial institution wisely.
Business Loan Product
Financial institutions allow entrepreneurs to choose from a wide variety of small business loan products. However, they require more time to process and disburse conventional business loan products like term loans. Whereas, business owners can easily access credit in a short time by converting their current assets into liquid assets. Hence, entrepreneurs can reduce loan disbursement time by opting for new age loan products.
Eligibility Criteria
Financial institutions have different eligibility criteria for different credit products. Generally, lenders have stringent eligibility criteria for unsecured or collateral-free loan products. Whereas, in case of secured loans, the eligibility criteria are comparatively flexible. Entrepreneurs can avail credit on time by opting for secured business loan products.
Documentation
- With leading NBFCs, entrepreneurs can easily apply for a small business loan through a hassle-free online application process.
- The entrepreneurs can visit the official website of the financial institution, compare the available business loan products, apply for the business loan, and upload the required documents. Since the entire process is online, it is less time-consuming.
- Post verification of documents, the loan can be approved instantly and entrepreneurs can receive the loan amount within 24 hours.
Entrepreneurs can reduce small business loan disbursement time by choosing the right lending institution and business loan products. Lastly, it is advisable to read all the terms and conditions of the loan agreement carefully before availing it.