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Benefits of an SME Loan


by Mahindra Finance


June 29, 2023


3 mins read

Small businesses require funding at various stages – while getting off the ground, managing operations, maintaining inventory, upgrading equipment, and even recovering from losses. When running a Small and Medium-sized Enterprise (SME), it is imperative to optimise available resources in the best possible way. Sometimes, however, this still may not be enough to keep things running smoothly.

In such a scenario, some extra cash flow can go a long way. While there are several ways to fund your business, a small business loan or SME loan, can be the ideal solution to help steer things in a new direction.

There are many tangible benefits to taking such a loan. Here below, we list some of the most important ones.

Easy & Quick

With the world going digital, business loans have become much easier to access. In fact, today, many banks and lending institutions offer such loans without collateral. This makes it easier for small businesses to sustain their ventures. Further, the online application process for availing this facility is simple – with minimal steps and documentation.

Flexible Repayments

Nowadays, SME loans come with flexible repayment options. Banks and lending institutions usually understand the complexities attached to running a small business. As such, they offer flexible terms and conditions. They may allow an increase or decrease in EMI based on the financial condition of the company, and also allow bullet payments for periodic payment.

Low Rates & Charges

The interest rates for SME loans tend to be lower, especially in the case of government-backed schemes. Such loans are typically designed for public welfare. Overall, several factors are taken into account before disbursing the loan. These aspects include credentials of the borrower, tenure of the loan, business model and balance sheet of the company. Once approved, there are nominal one-time costs attached to the loan, such as processing fees.

Business Development

The required cash flow can help grow and expand your business. With stronger finance, manpower, technology and equipment, you have all the tools necessary to take your vessel to the next level.

Tax Benefits

Lastly, and quite importantly, you receive tax benefits under the Income Tax Act, wherein a part of the profit used for repaying the loan amount is exempt from tax.

Nowadays, especially for small establishments, business loans have become the order of the day. Along with all the unique benefits and features offered, they are also increasingly easy to take and repay.

If you are a growing Micro, Small & Medium Enterprise (MSME), it would be handy to know that you can always count on an MSME loan for your business needs. And, for the best loan rates, you should check out the Mahindra Finance SME loan plan.

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