5 Common Financing Mistakes MSMEs Fall Victims To
A major part of India’s economic growth depends on the contribution of the Small and
Medium enterprises. Although their products and services are greatly valued by certain
sections of the society, many SMEs fail to find a ground in the long run. This happens
mostly because of the lack of adequate research and planning by entrepreneurs
about the potential possibilities and associated risks related to the
particular niche of business operations. Such SMEs and MSMEs face challenges due to
inaccurate assessments of their working capital requirements, and even if they
do, they are unable to find proper MSME financing options for
business expansion.
At this new age, innovative financing solutions are coming up with
the advent of latest technology trends. Despite such improved availability of SME finance, many businesses are still
suffering. Let us look at some common financing mistakes made by SMEs which
mostly relate to estimating the correct amount of business loan required,
assessing the full financing cost, wasting time on getting business
loans approved and the opportunity costs.
Deficit in research and planning
Planning for a sought-after business is great responsibility. Unfortunately,
some business owners tend to get over involved with daily business operations
and troubleshooting, and in the process they fail to look at the bigger picture. They are not
able to foresee the amount of cash they would require for their business growth. All of a sudden,
they are caught up in a cash crunch, and hence, they are unable to meet their
working capital needs. To combat the issues stemming from the right inflow of cash at the
right time, online lenders like TAB Capital have come to the forefront. While
traditional lenders mandate stringent rules and regulations before approving business
loans, TAB Capital approves unsecured
business loans in just 2 working days!
Compelled to pay hidden charges
Sometimes SMEs and MSMEs are burdened with exorbitantly high hidden
charges, and business owners are not even aware. TAB Capital
offers MSME financing to small businesses
without charging any hidden fees on them. You can also prepay the MSME loan without any prepayment charges if you opt for an online MSME loan from TAB Capital.
Putting too much at stake as collateral
More often SMEs tend to put too many assets as collateral to secure their business loan. In the long run, they are doomed with financial fears of losing their assets. TAB Capital offers MSME loans without collateral, and many other long-term benefits.Incorrect estimation of required funds
Some business owners are sceptical about overestimating their cost
and loan requirement, for having to pay interest on excess funds. This makes them
underestimate costs and even after getting a loan, they are struck with a need
for more.
Opting for the wrong SME Financing option
Often SMEs and MSMEs turn towards borrowing money from unorganized
money lenders, and end up being in the receiving end because these loans are
not tailored to the specific needs of the SMEs. New age digital
lenders like TAB Capital over customer-friendly MSME
loans, which are customized as per your business needs.
Any delay in arrangement of funds at a given point of time can prove
catastrophic for a business. But TAB Capital’s digital lending platform eliminates the unexpected financial
bottlenecks paralyzing a business growth by quick, customer-friendly MSME financing models.
Reach out to TAB Capital
for all your financial needs!
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