Small and Medium-sized Enterprises (SMEs) are the backbone of the Indian economy. Unfortunately, many of them do not know how to manage their cash flow as they suck in money and give out little to no returns. This can lead to severe losses when the client decides to pull their business away, or the bank demands for repayment of a loan, among others. Therefore, MSME businesses need to come up with strategies that will help them manage their cash flow like a boss.
If you are an entrepreneur running a small to medium enterprise (SME) business, managing your cash flow is one of your biggest headaches. As a small business owner, you have to manage all aspects of your business, from sales to marketing, from human resources to accounts receivable. However, the most important thing to remember is that you should never sacrifice your cash flows for profits.
The fact is that while this may sound contradictory, the more profitable your business is, the more cash you will be able to retain. Cash flow management is about ensuring that your business can pay its bills on time without sacrificing its core business activities.
It is well known that the Indian government has always been super active and supportive of the micro, small, and medium sector. The schemes mirror the government’s intention to make the maximum benefit available to these sectors. This is because the government has correctly understood the scope of empowerment and independence of people involved in making them self-employed.
The benefits will help the entrepreneurs if they are registered under MSME/SSI under MSME Act. MSME loan full form being the Micro, small and macro enterprises loan is also been granted to the budding entrepreneurs to build their business. To carry this agenda, the government has devised the Micro, Small, and Medium Enterprises Development Act in 2006.
The three categories are based on the magnitude of the businesses. They are micro-businesses that are no more than 10 lacs in service and 25 lacs in manufacturing industries. Small businesses are no more than two crores in service and five crores in manufacturing industries.
Medium businesses are no more than ten crores in service and ten crores in manufacturing industries. Unsecured loans also can be availed if the total investment needs around 7.5 lacs.
Business Loan Has the Following Advantages
- Easy Funding – You can avail of loans between 1 lacs to 7.5 lacs in quick time with the most competitive interest rate with the tenure of 1 to 3 years.
- Flexible repayment – One can choose the tenure between 12/18/24/36 months. With this feature’s help, a business owner can repay the loan in the short term as per his business revenue.
- Unsecured business loan – Without risking your personal or business property, one can get this type of collateral-free loans.
- Online application – It is effortless to apply for a MSME loan online. Since the loan does not need security, one can upload required documents and avail of the loan online.
Importance of MSME registration
If you wish for MSME registration, your Aadhaar card number needs to be verified, and you can get a certificate of registration. This certificate will boost your process when you are applying for a business loan. The benefits of Business loan registration are as follows.
- Loans without collaterals
The government support to avail the loan without having to keep security. You are not needed to keep your property against the loan. This collateral-free loan is undertaken by GOI (Government of India), SIDBI (Small Industries Development Bank of India), and the Ministry of Micro, Small, and Medium Enterprises.
- Subsidy on patent registration
A significant subsidy of 50% is given to registered members for their patent registration. One needs to send an application to the relevant ministry for the same.
- Overdraft facility along with interest rate exemption
Enterprises or businesses registered under MSME/SSI under the MSME Act can avail a benefit of 1% on the overdraft as part of the Credit Guarantee Trust Fund Scheme.
- Concession on electricity
By submitting the electricity bills and the application, and a copy of registration, one can avail of the concession.
- Protection against delayed payments
There is a chance of payment delays in every business. To protect MSME registered members, the government has supported them by implying compounding interest on buyers if the payment is delayed more than 45 days.
- ISO certification charges reimbursement
Owners can claim their ISO certification fees from the MSME.
- Industrial promotion subsidy eligibility
The owner can avail of industrial promotion subsidy if he is a registered MSME member.
FAQs:
- What is MSME?
MSME full form is Micro, Small, and Medium Enterprises, and it is registered under MSME act 2006. It lends money through institutions to the business aspirants.
- How to get an MSME loan in 59 minutes?
One needs to upload relevant documents such as bank statement, KYC, tax returns of last three years, GST details, educational, on the given website to avail loan in 59 minutes.
- How much can the maximum loan be availed through MSME?
One can get a maximum of 7.5 lacs in MSME loan from Ziploan within just three days if all the requirements are adequately met.
