GST MSME LOAN THE BEST CHOICE FOR SMALL BUSINESS OWNERS

MSMEs play an important role in augmenting the overall economic growth of the country. Whilst, promoting inclusive development MSMEs contribute towards driving the growth of various other sectors as well. In India, MSMEs constitute a wide network of around 63 million independent units. The contributions of these medium and small scale enterprises in increasing the country’s GDP can’t be underlined. By creating about 120 million job opportunities MSMEs boast of being the second largest employment generator in India. 

Thus, MSMEs are the powerful growth engines of the Indian economy. Moreover, providing them access to easy funding options for business expansion and investment can further boost their growth. However, in wake of this,  several financial institutions including banks and NBFCs have starting disbursing loans on the basis GST returns. These new term loans also referred to as GST loans have been designed to provide MSMEs quick access to finance based on GST returns. These loans address the financial needs of entrepreneurs who are only able to produce GST records as the primary tool for their business assessment.  Thereby, ditching away the need for intensive paperwork GST business loans provide borrowers quick and convenient access to capital.

However, now, the pertinent question is how important are these GST business loans and how they are catalyzing the growth of small businesses in India. To analyze its possible impacts on business here is information summed up below. 

POSSIBLE IMPACTS OF GST ON MSMES AND BUSINESS LOAN PROCEDURE

The debut of GST in the business loan scenario has simplified the funding process to a great extent. It is said to provide the right financial support to small and medium-scale enterprises. Considering GST records as the primary assessment factor this loan facility aims to provide MSMEs easier access to financing while reducing the total turnaround time. The implementation of this loan product has inevitably paved the way for the progress of SMEs and MSMEs. By meeting working capital demands appropriately the GST business loans boost the growth opportunities for small and medium businesses. Unlike, traditional loan procedures which required pledging security GST loans have extended the financing facility to business owners who aren’t able to produce collaterals. Additionally, the easier qualification requirement has provided MSMEs a major relief, allowing them to have access to credits seamlessly for conducting smoother business operations. To register your business in MSME check our guide on MSME registration process along with the benefit of MSME registration.

BENEFITS OF GST BUSINESS LOANS

The potential benefits associated with GST business loans outperform any other traditional loans. Some of the most essential benefits ones are: 

Faster approval:

One of the most important benefits of GST loans is its faster approval. GST record provides lenders a compliance check of borrower’s business. Thus, while sanctioning loans lenders feel more comfortable to lend credits. Also, the less stringent eligibility criteria cut down intermediate processing steps thereby mitigating overall turnaround time. 

Convenient Process: 

For small and medium scale businesses, one of the best parts of GST business loans is their convenience. Since these loans are sanctioned based on GST records they do not require any security to be pledged. Simply, the regularity in your tax payment reflects business profitability. Thus, due to less complexity involved GST loans allow quick disbursal. 

Realistic Assessment:

Under this product, no financial document neither the bank statement nor balance sheet is required. Assessment and loan limit is solely decided based on GST returns. This realistic data provides the lenders with a fair assumption about business credibility. It helps them keep an easy track of funds utilization, thereby reducing the overall complexity of the procedure.

Less Paperwork:

To avail unsecured business loans MSMEs need to pass a number of financial qualifications. However, when you apply for GST business loans you need not worry about this as these loans require limited documents for loan processing. Also, unsecured GST loans can be obtained conveniently without fulfilling any prerequisites.  

WHY CHOOSE FLEXILOANS FOR GST BUSINESS LOANS

There is no denying GST loans are the best choice for MSMEs to grow and sustain their business. And when these loans are obtained through FlexiLoans the process gets much enhanced. The technology-backed loan sanctioning of FlexiLoans enables lending credits faster at the most competitive interest rate. All GST compliant small and medium scale enterprises can apply for hassle-free business loans using the easy application process. The benefits of applying for a business loan with FlexiLoans include:

• Simplified product with loan capacity up to INR 1 Crore. 
• The transparent procedure with no hidden charges.
• Loan approval within 48 hours. 
• The complete online process with no paperwork. 
• Most competitive interest rate.
• Technology backed procedure enabling safe and secure transactions. 

CONCLUSION

Hence, from all of the aforementioned benefits, it can be inferred that the GST based loan facility is certainly the right means for MSMEs to secure collateral-free financing. The GST rating effectively supports the small and medium scale businesses to grow and flourish their business. Thus, being GST compliant can help businesses create long term opportunities. You can also read some of the prominent advantages and disadvantages of GST in India

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