Every small business needs financial assistance at some point. Most Micro, Small and Medium Enterprises (MSMEs) usually require some sort of financial assistance when they are moving up the growth curve. The money may be needed for purchasing essential equipment, upgradation of infrastructure or for meeting operating expenses. Where the money comes from is totally the discretion of the owner and his/ her priorities. Many different businesses have the option of procuring financing from various borrowing instruments.

But, when it comes to MSMEs, the preferred route taken to address financial needs is an MSME loan in India. Let us look at the factors which have made MSME loan so popular among small businesses in India.


Running a business in the Indian economic scenario can be challenging. Due to seasonality of demands and various other factors, there can be times with surplus of funds, while sometimes every penny can make a difference. When the latter situation arrives, funds will be required to be deployed on an urgent basis.

Availing MSME loan is easy and hassle free. There is not much time taken to disburse the loan amount and documentation is also minimal. The processing time is very quick; companies like Bajaj Finserv have approval times as low as hours. There is also online account access, which lets you access your account statement and loan details on the go.

Full Control

A small business will also need to address the financial requirements of the company in the course of doing business. Finance is not easy to procure, and other sources of loan such as angel investors and venture capitalists offer finance but also seek to control part of the company in return.

A small business owner may not look forward to relinquishing control of the business MSME loans are specifically designed to meet such requirements of small businesses. They are an excellent source of finance for business owners who wants to avoid liquidation of control

Reduced Interest Rates

In a business environment, the more money one has on hand, the better positioned he/ she is to take on the risks that come along the way. MSME loans, with their competitive interest rates, ensure that only the minimum amount is spent in repayment of the loan, and the rest is available for other business needs.

No Strings Attached

MSME loans do not require collateral from companies to be eligible for it. The nature of small business is such that they are ‘asset light’ and can’t afford to keep their equipment as collateral.

Small businesses cannot pledge their valuable resources to banks for cash, as this can have adverse impact on their productivity, if something goes wrong. MSME loans, thus, turn out to be an ideal source of funds when the need arises.

Short-term Commitment

MSME loans are mostly utilised for short-term requirements by small businesses. This arrangement provides a certain amount of flexibility to the borrower, as there is no long-term commitment required on his/ her part. Having a short-term commitment also allows the management room to manage the cash flow and allocate available resources efficiently.

In Conclusion

MSME loans come with great benefits for small businesses. They also give hope to those who have great business ideas and a desire to have a business of their own. At Bajaj Finserv, we not only offer MSME loan at competitive interest rate, but with a host of other value-added features like no collateral, fast processing cycle and online account access, we meet the exact needs of small businesses at any stage of their growth.

Apply for Business Loan Online Check your Business Loan Eligibility