You can’t expect a small business to grow into the company of your dreams right away, especially when you start from scratch. You have to reach different milestones along the way to successfully develop your small business. But one thing is for sure that reaching new heights in your business requires capital, and this need can be easily fulfilled by taking a loan from a Non-banking Financial Company (NBFC).
Loans from NBFCs cater to the various needs of different types of business owners ranging from a small tea shop owner or a person who owns a handloom business in a remote village to an entrepreneur running a factory or a catering business. This also helps generate employment for locals. Moreover, small business owners have a scarcity of property to be pledged as security. This is why most brilliant business ideas cannot see the light of the day as their creators fail to seek a loan from banks.
NBFCS like Kinara Capital understand the dilemma of MSMEs and envision a financially inclusive world where every entrepreneur has equal access to capital. Kinara is an RBI-registered company that issues collateral-free business loans in just 1 day. The company has funded thousands of MSMEs across India and offers various types of NBFC Loans
Let see how:
For advancing loan applications, other organised financial institutions look at balance sheets and collateral coverage; but small businesses sometimes don’t keep balance sheets and therefore fail to qualify. Kinara Capital’s products fill this void, allowing SMEs to obtain funding in a simple, scalable, consistent, and reliable manner. Thus, it allows Kinara to meet a wide range of market requirements for SMEs.
As a small business entrepreneur, at a certain point in the lifecycle of your business, you are likely to want to expand your business activities. These activities can be related to opening a new store, shifting to a new location, procuring raw material, or adding more products to the list of your offerings. But most of the time, small business owners do not have the capital on hand to make this possible. This is when working capital loans come in handy for MSMEs. These types of NBFC loans help you optimize your business potential.
Outdated machinery can slow down the production process and hence delay the delivery of your products. Untimely delivery will lead to a bad consumer experience, which will ultimately lead to business loss. Availing of a Machinery loan from an NBFC will help support your desire to fulfil your customers’ expectations on time.
The importance of NBFC industry cannot be overstated. MSMEs have been reaping the benefits of NBFC, particularly since the acceleration of digital transformation in the country. NBFCs are bringing about a critical shift in India’s financial ecosystem by driving the financial inclusion of MSMEs. The 63 million MSMEs in the country are also referred to as the backbone of the economy as they serve as a major growth driver. However, they often fall through the cracks in terms of policy support and benefits due to various reasons. This has kept thousands of them outside the ambit of formal financing, forcing them to resort to informal lending, which can be very damaging to their finances and business health.
By extending their services to these last-mile MSMEs, NBFCs have successfully driven their financial inclusion and allowed them to access myriad benefits, as well as supported formalization.
NBFCs play a crucial role in financing MSMEs in the country. They often cater to the underbanked and unbanked segments of the MSME sector, which have gone unserviced by banks. The importance of NBFC sector is particularly evident for small businesses in rural and semi-urban areas, which lack access to formal banking. NBFCs have an extensive presence and reach in these areas, and are able to deliver NBFC loan and NBFC finance to these last-mile entities.
Given that these lenders have far more flexible lending practices, an NBFC MSME loan is often more accessible to MSMEs than one from a traditional bank. Banks often have stringent lending criteria and lengthy approval processes, which adversely impact MSMEs and keep them from accessing loans. NBFCs also leverage technology extensively, which gives them the ability to provide quicker and more straightforward loan approvals. MSMEs, which operate on limited liquidity and have access to fewer resources, often require swift access to funds to manage working capital, expand operations, or invest in new technologies. NBFCs, leveraging advanced technology and innovative credit assessment models, can speed up loan processing and disbursal, ensuring that MSMEs receive timely financial support.
The company also offers Short-term Working Capital loans and Loan Against Property for existing Kinara customers, as well as Bill Discounting Loans. Kinara’s unique HerVikas program provides discounted collateral-free loans to women entrepreneurs, with added benefits like a 60-day repayment holiday and a 50% discount on processing fees.
The documents you might be required to submit in order to avail of the loans include:
NBFCs have been leading the charge in terms of providing easy access to credit for MSMEs. They can support the growth of small businesses by offering timely and collateral-free loans, which also drives the financial inclusion of these entities. NBFCs like Kinara Capital have a keen understanding of the needs of MSMEs and have come up with tailored solutions to meet their requirements. If you are an MSME entrepreneur seeking financing for your business, Kinara can be your one-stop solution with a wide array of loan offerings from Machinery Loans and Working Capital Loans to special benefits for women-led MSMEs. Kinara has already supported thousands of MSMEs by disbursing upwards of Rs. 6,700 crores in collateral-free loans, and you can be next. So get in touch with Kinara Capital to get your growth journey started today.
1 What types of financial assistance can MSMEs expect from NBFCs?
MSMEs can expect easily accessible financial assistance from NBFCs in the form of business loans. These loans have much more flexible eligibility criteria and application processes, as well as quicker processing and disbursement.
2. What are the key benefits of borrowing from an NBFC for small businesses?
The key benefits of borrowing from NBFCs are the quick turnaround times, easy processes, simpler documentation, and in the case of NBFCs like Kinara Capital, collateral-free business loans, all of which are extremely advantageous for MSMEs.
3. How can MSMEs determine if an NBFC is the right financial partner for their scaling efforts?
MSMEs can do their due diligence about the terms and conditions offered by a lender, as well as their market reputation, online reviews, etc. to determine if it would be the right financial partner for them.
4. What are the major factors affecting MSME growth?
The major factors affecting MSME growth are access to capital, access to the right markets, compliance, and macroeconomic issues that affect supply chains.
5. Do NBFCs offer other financial services besides loans?
NBFCs are non-deposit-taking entities, so they don’t offer savings bank services. However, depending on categorization, some do offer investment options and other financial services.
