MENU

Service Sector Business Loan

Apply NowApply Now

The service sector has seen a rise in the 21st century largely due to the growth of computers and Information Technology sector in India as well as in the world. Nowadays the growth of the digital economy has become part of everyone’s life and increase in services in the private, public and government sectors. The units catering to services sectors are micro, small, medium and large scales sectors. The services sector is mostly intangible, unlike the goods or products sector.

The service industry comprises of computer, retail, automobile, and electronics, etc. The service sector accounts for $ 1.0 billion in revenue in India according to the CIA World Fact Book and International Monetary Fund (IMF). As per the recent survey, there are 60 million small and medium scale industries in India. Over 100 million people are employed in India by the Micro enterprise’s services sector alone.

Microenterprises

The micro organizations are those that employ 10 to 15 people and which require less amount of capital usually Rupees 1 million or less. These cater largely to service and products sector or both. These consist of units which are very small such as catering, plumbing, micro engineering, electrical work, electronics, gardening, mechanics, auto repair, carpentry, etc.

To raise capital for the micro enterprises require micro-financing in early-stage startups. Nowadays the loans given to micro enterprises are tailored to suit the industry and unique for a case to case basis. The micro-financing is easy to process, made simple, quick capital disbursal and are customized to the type of industry.

Small Scale Business

Small scale units are those that require capital between Rupees 1 million and Rupees 10 million

Small scale units employ more than 20 people and usually less than 50 people.

Medium Scale Industries

Medium scale units are those that require capital usually from Rupees 10 million to Rupees 100 million and employs people from more than 50 people to less than 250 people.  

There is medium and steady growth of capital, employment, and assets. The medium scale units bridge the gap between small and large scale units.

Medium scale units employ more unskilled laborers than other industries. The medium scale units, therefore, contribute significantly to the country’s economy and also slash unemployment and raise the standard of living.

Nowadays the loans also for the medium scale units are tailored to the type of industry, however, there is a little amount of risk involved since the medium scale units are not secured.

Having said that the loans lending organizations which are government or big public sector banks have a difficult process and the business loan process is time-consuming and strenuous

The process at private and modern financial institutions such as FlexiLoans has been made easy and faster, accessible to many MSME industries. So taking service sector loans with FlexiLoans is advantageous to everyone who wants the MSME loans.

The Service Sector Business Loans from private lending institutions can be grouped as follows:

  • Run up capital loans:

The run-up capital loans also called as working capital loans are those that require immediate funds to meet the daily activities of the business. The fund from the loans can be utilized for raw material purchase, overheads such as power or salary disbursement, etc. Also, these loans are required when business types are very fluctuating such as business during particular seasons or having quarterly billing cycle or delay in customer payment and other ad hoc and external factors.

The benefits of run-up capital loans are:

  • The EMI schedule is usually between 1 year and 2 years maximum.
  • There is no security (Unsecured lending) required for lending business loans
  • The interest percentage is competitive

  • Merchant Cash Advance:

A merchant cash advance is famous for the micro, small and medium scale units, as it offers faster disbursal of cash and simple application process. With this type of lending, the aspirant receives a lump sum amount of cash in his account and is used for day to day activities and repaid daily from the revenue generated in the point of sale machines. The case amount is disbursed within 3 days and favorable to those enterprises that generate revenue on a daily basis with the help of point of sale machines.

  • Line of credit (LOC)

This is the type of lending option in which the businessman gets heavy cash credit into is account and is charged only for the amount spent from his credit account. The best example is having a credit card wherein there is credit limit and as we use the card on the point of sale machines and charged some percentage on the amount used and with the monthly limit for repayment. This type of lending is unsecured as there is a credit limit given for spending.

  • Invoice financing:

This is very largely used for the micro, small and medium scale units wherein based on the invoice raised by the business units for the services rendered to their customers. Once the invoice is cleared by the customers the business owner can repay the lump sum amount for which he got the business loans. As there is a gap between the generation of invoice and the clearance business owners rely on the loan to bridge the gap.

In this model of the invoice lending scheme, there is a percentage of the invoice amount upon clearance of the invoice; it includes some processing fee as well for the lender organization.

The Government of India with the help of the Reserve Bank of India is promoting these schemes of business loans lending in the country. They are making efforts to change the previous strenuous ways and to make it simpler, linear and easy ways to access to business loans.

However, at FlexiLoans the process is simple and you can feel free to approach us.

Documents Required for Service Sector Business Loan

  • KYC documents for self and company if available
  • Business Registration Certificate
  • Current Account statement from the bank for the minimum last 6 months

Points to remember when applying for a Service Sector Business Loan

Working capital loan eligibility criteria:

  • At least 1 year of running the business.
  • The revenue generation in a year must be not less than Rupees 2.4 million.

Why LOC is favorable for a new business?

  • No security required for the service sector loans
  • Interest is charged on the amount spent alone
  • Permits access for lending between the range of 50,000 and 10 million
  • Flexible repayment tenure up to 1 year

Invoice financing eligibility criteria

  • The business must have a minimum operational history of over 1 year.
  • The business turnover annually must be over ₹2.4 million
  • Must produce the valid invoice of the work done or the purchase order worth a minimum of one lakh

How to apply for service sector business loan

  • Fill the online form and it will not take more than 15 minutes
  • Your credit score is calculated within 1 day of submission of documents that you have uploaded in the online website.
  • After you sign the contract the loan will be disbursed within 2 days

Why FlexiLoans?

  • Ground-breaking credit solutions from 1% per month.
  • Commercial credit support centers are located in more than 100 cities.
  • Loan capacity of up to 10 million rupees.
  • Fast and easy loan processing in one click
  • We offer pioneering solutions for customized products to all our customers.
  • No worries about running around for making copies and we go green so upload documents online.
  • 100% loan offered without demanding any guarantee
  • No other hidden clause
  • Extremely secure transactions

service-sector-business-loan-in-48hrs-apply-online-flexiloans