Facilitating the Process of Availing Finance for SMEs
The relevance of Small and Medium Enterprises (SMEs) in any economy is very vital as they form a major chunk of the the economic activity. They play a key role in industrialization of a developing country like India. They have unique advantages due to their size, their comparatively high labor-capital ratio, focus on relatively smaller markets and need for lower investments. They ensure a more equitable distribution of national income, facilitate an effective mobilization of resources of capital and skills and stimulate the growth of industrial entrepreneurship.
Innumerous but significant initiatives are required in India for ensuring prompt supply of financial resources to SMEs, such as adequate credit delivery to SMEs, better risk management, technological up gradation of Banks (especially in rural and semi-urban areas), change in attitude of financiers and so on.
This would certainly involve education and upliftment of the SMEs.
Two most important things for SMEs is to be aware of financing facilities for their business. It includes:
-Highlight your own financing requirements for business; and
-Be aware of financier’s requirements
Whenever any business has financing requirements, it should be well communicated to the existing financial institution/advisor. In case of absence of proximity to any financial institution, one can ask for references from their business associates. It is important to note that requirements should be clearly communicated in terms of amount, tenor, mode of repayment, end use and means to repay the same. This would also help the financial institution to provide the best suited option for the business.
Typically, any financial institution would look at strengths and composition of the management of the company, legality of the business, positive outlook of industry in which the business operates, acceptable financial conditions (including present position of revenues and capital structure as well as projection), collateral value (if applicable), quality and strengths of business plans, clean track records of repayments for any earlier borrowings by the company or promoter group.
A financier should not only provide finance for the business but should also timely educate the small business owners and help them grow. A financier-borrower relationship can start with a small financial assistance and gradually when mutual trust is established, finance facility can also grow with business. Fruits of patience would surely be awarded in future.
Likewise Religare group also believes in maximizing customer returns. As businesses grow, so do their needs. We at Religare Lending Business understand the SME needs and have tailor-made offerings and processes to facilitate customer growth. Whether it is for new plant & machinery, equipment or inventory purchase, working capital or business expansion, SME Loans from Religare lending business provides the finance to businesses and help them gain uninterrupted growth.
We understand this in a very simple equation. We exist for and because of our trusting customers and that in their growth is our growth. Hence our entire focus is to help guide our customers to the next level through our sector expertise, specialized products, simplified processes and documentation, doorstep service delivery and keep our customers at the centre of our universe.
The author of the article is Associate Vice President, Product & Strategy - SMEs, Religare Finvest Limited.
To gather more information on various business application for SMEs, get in touch with the experts at IndiaMART Knowledge Services. Do drop in a comment to this post to let us know what else would you want us to share about!
The relevance of Small and Medium Enterprises (SMEs) in any economy is very vital as they form a major chunk of the the economic activity. They play a key role in industrialization of a developing country like India. They have unique advantages due to their size, their comparatively high labor-capital ratio, focus on relatively smaller markets and need for lower investments. They ensure a more equitable distribution of national income, facilitate an effective mobilization of resources of capital and skills and stimulate the growth of industrial entrepreneurship.
Innumerous but significant initiatives are required in India for ensuring prompt supply of financial resources to SMEs, such as adequate credit delivery to SMEs, better risk management, technological up gradation of Banks (especially in rural and semi-urban areas), change in attitude of financiers and so on.
This would certainly involve education and upliftment of the SMEs.
Two most important things for SMEs is to be aware of financing facilities for their business. It includes:
-Highlight your own financing requirements for business; and
-Be aware of financier’s requirements
Whenever any business has financing requirements, it should be well communicated to the existing financial institution/advisor. In case of absence of proximity to any financial institution, one can ask for references from their business associates. It is important to note that requirements should be clearly communicated in terms of amount, tenor, mode of repayment, end use and means to repay the same. This would also help the financial institution to provide the best suited option for the business.
Typically, any financial institution would look at strengths and composition of the management of the company, legality of the business, positive outlook of industry in which the business operates, acceptable financial conditions (including present position of revenues and capital structure as well as projection), collateral value (if applicable), quality and strengths of business plans, clean track records of repayments for any earlier borrowings by the company or promoter group.
A financier should not only provide finance for the business but should also timely educate the small business owners and help them grow. A financier-borrower relationship can start with a small financial assistance and gradually when mutual trust is established, finance facility can also grow with business. Fruits of patience would surely be awarded in future.
Likewise Religare group also believes in maximizing customer returns. As businesses grow, so do their needs. We at Religare Lending Business understand the SME needs and have tailor-made offerings and processes to facilitate customer growth. Whether it is for new plant & machinery, equipment or inventory purchase, working capital or business expansion, SME Loans from Religare lending business provides the finance to businesses and help them gain uninterrupted growth.
We understand this in a very simple equation. We exist for and because of our trusting customers and that in their growth is our growth. Hence our entire focus is to help guide our customers to the next level through our sector expertise, specialized products, simplified processes and documentation, doorstep service delivery and keep our customers at the centre of our universe.
The author of the article is Associate Vice President, Product & Strategy - SMEs, Religare Finvest Limited.
To gather more information on various business application for SMEs, get in touch with the experts at IndiaMART Knowledge Services. Do drop in a comment to this post to let us know what else would you want us to share about!
Looking for financing options for SMEs is a very tough task! Thank you for helping out!!
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