BENEFITS OF MSME LOANS

As we all know the situation due to the COVID-19 pandemic led to cash crunch in the businesses, especially MSME, or SME. Recently, the government announced a collateral-free loan of up to 3 Lakh crore to help the businesses that are dealing with the cash crunch problems. The emergency credit line guarantee scheme is announced for the MSMEs so that they can start their operations as soon as possible without any problem.

       

Let’s discuss the benefits of MSME Loans:

1.     Eligibility: Whether your company is into proprietorship, partnership, trust, a registered company, and a limited liability partnership (LLP), all are eligible for the MSME loans. Only business loans are being covered under this scheme, and if the loans is taken by the owner for his/her capacity then it will not be covered.

    

2.     Interest Rate on Loans: The MSME loans provided to the borrowers are beneficial in terms of interest rates. Moreover, the loan announced by the government for MSMEs is helpful for the borrowers because of low-interest rates. Banks and other financial institutions have kept the interest rates to a maximum of 9.25% per annum. Although, the NBFCs cannot even charge more than 14% interest rates on the loans offered to the MSMEs under this scheme.

3.     Pre-Approve Mechanism: The highlighting part about the MSME loan announced by the government is that it has a pre-approve mechanism, which means you don’t have to go to the lender to apply for the loan. If you are fulfilling the eligibility criteria for the loan scheme, then the lender will automatically offer you the loan.

There are a number of financial consultants available in the market to assist and guide you throughout the loan procedures. One such financial advisor is Consult Avenue for all your finance related help.