8 Crucial Benefits of Taking an MSME Loan

India is home to more than 39K startups. The country’s micro, small, and medium enterprises (MSME) sector comprising 577 Cr companies is beating the challenges of setting up and building the consumer base. 

MSME has helped India in the last 5 years to see immense growth in startups. 

MSME currently contributes a whopping 50% of total exports and employs about 11 Crore people giving wings to entrepreneurs. 

Right from providing funding and subsidies to technical upgrades, MSME loans are designed so that every budding entrepreneur of the country can avail themselves and give a serious productivity boost to their businesses.

More than that, MSME loan actually have some economic and technological boosts for a company as well, some of which we will talk about here.


Benefits of Taking an MSME Loan

Business Accessibility

No business can start without having startup capital.

This startup capital is required to build a professional workplace, an efficient infrastructure, hire talent, and push your products/services.  

Since expanding your business is one of the most daunting tasks, startup capital is always borrowed in the form of an MSME Loan.

Most of the loan processes now are often easier than ever. Your MSME loan documents need to be correct, and you can take the loan for your business. Most importantly, these loans give you the headstart you need with starting up.


A business under your control

Businesses that have a limited starting capital often resort to investors and shareholders, who often end up asking for control over your business.

While such parties are beneficial in the long run, their heavy involvement often disrupts the company’s working environment.

It’s a no-brainer that a financial infusion could bring a company back on track and save it from liquidating its control.

Giving up on control might not be at the top of the list for any company owner. As such, MSME loans often take care of the finances and keep the control to the owner only.


Business Growth

Businesses, small or large, have extensive expenses that can’t be managed from a single source. From technology to managing the team, a business requires everything to be in check.

All this plays a vital role in the financial aspect since that’s how a company is managed. 

Cash flow in such a case is a crucial part of your business to make sure your business is doing well. With the increasing expenses and providing flawless products and services, a cash surge in an MSME loan becomes critical from time to time.


An efficient internal business infrastructure

A sound business not only has a seamless product/service but also promotes a healthy working environment.

To be able to achieve that, a well-defined infrastructure is essential. 

While it’s not easy for a business to promote an ideal environment from the very first get-go, it’s still achievable with sufficient funds.

Including amenities like employee and customer grievances, relationship managers, employee training programs won’t just save carve out your dream team but also improve their overall productivity.


Repayment Flexibility

After your MSME Loan Eligibility is cleared, you can apply for various business loans, anywhere up to ₹50 Lac or even more, depending on where you are taking the loan from.

The repayment part of this loan is something you can clear anywhere from 12 to 36 months as per the agreement between you and the platform.

This is one of the best things about a business loan because you have the freedom to choose your repayment plans and the tenure as per your projections of how your business performs.


A long term business credibility

In your sentence of running a business, you will not want just one loan for your business. 

With time, you’re going to require higher loan amounts, for which you need to have a great relationship with your vendors.

Business loans are significant to improving your business’s credibility and credit score. If you can repay one on time, chances are the next time, and your MSME loan will be sanctioned earlier than ever.

This is helpful for your business since you never know when you’ll need a massive cash inflow in the future.


Business loans are a short term commitment

For anybody taking an MSME loan, it’s pretty evident that the loan amount is for a short period. 

Since small businesses don’t have a large-scale requirement, their cash requirement is also not exponential.

This is beneficial because the borrower doesn’t have to commit to this extended repayment for a longer period. 

The control of repayments is entirely up to the borrower. This also allows the borrower to allocate this money to the business resources readily. With fast processing and multiple repayment options, MSME loans are an efficient addition to a business’s resources, especially in the starting phase.


An entire restructuring

Having a single source of debt is far better and easier than having an open loan account at multiple places. 

Since your business is a large venture, it could have multiple sources of funds that include various banks, vendors, and other parties. 

All these parties might have their terms, interests and require robust management.

However, an MSME loan can help you close all these accounts and keep your loan from just one place. 

One place means a single interest rate, a lot of money saved, and all the benefits we mentioned above, of course.



Taking up an MSME loan is a serious responsibility, and you should be aware of what you are signing before you even decide about taking up a loan.

MSME loans are crucial for a business as they provide multiple financial benefits.

Applying for a business loan is easy when you know your vendors and are comfortable with their interest rates. 

Have your lawyer look over the documentation part of the loan to make sure you aren’t missing out on any obligations.