To cater to the diverse and evolving needs of MSMEs, lenders offer a wide range of loans to these businesses. Here are a few common types of loan options available for MSMEs.
MSME Term Loan - For Long-term Business Needs
For investments aimed at the long term, such as growing a business, investing in capital projects, or acquiring land or properties, etc.
MSME Working Capital Loan - For Daily Operations
Utilised for handling everyday business expenses, like covering rent and salaries, paying utilities, purchasing inventory, and funding training expenses. Working Capital Loans include:
- Cash Credit: Secured overdraft credit facility with an approved limit; pay interest only for the amount used.
- Letter of Credit: Credit Guarantee for international transactions, secure for both buyers and sellers.
- Bill/Invoice Discounting: Obtain instant cash by converting outstanding invoices; access funds before the customer payment deadline.
- Trade Credit: Short-term funding solution for import/export companies; bridges the gap between the time of shipment and when payment is received.
- Overdraft Facility: Temporary credit option to handle immediate costs or short-term cash flow issues.
MSME Equipment Financing - For Machinery Purchase
Provides necessary financial aid to acquire machinery and equipment required for scaling businesses, facility expansion, technology upgradation, etc.
