Get the Tata Capital App to apply for Loans & manage your account. Download Now

Blogs SUPPORT
Loans For You
Loans for Business
Investment
Insurance
Apply

Quick Links for loans

Quick Links for Insurance

Investment

Offers Quick Pay
Back

Equipment Finance

Avail Digital Equipment Loans
up to Rs. 1 Crore

  • Attractive ROIs
  • Customizable Loan tenure
Know More
Back

Equipment Leasing

Avail Leasing solutions
for all asset classes

  • Up to 100% financing
  • No additional collateral required
Know More
Back

New Commercial Vehicle Financing

  • First time user
  • Retail and strategic Clients
Know More
Back

Used Commercial Vehicle finance

  • Repurchase
  • Refinance
  • Top up
  • Balance Transfer
Know More
Menu  
 
Apply Now

Tata Capital > Blog > Loan for Business > What to Expect from SME/MSME Sector in 2021?

Loan for Business

What to Expect from SME/MSME Sector in 2021?

What to Expect from SME/MSME Sector in 2021?

Do you know that a whopping 99% of businesses in India fall under the MSME category? But, their contribution to the GDP is as low as 35%!

The SME/MSME sector requires crucial growth enablers to realise its true potential. And, the top contender for the same is access to finance. This is where a business loan comes into play.

To receive external finance, MSMEs face high collateral requirements, along with skyrocketing interest rates. But few moneylenders offer a special SME loan at competitive interest rates to even MSMEs with a low credit score. The idea is to enable easy credit access for MSMEs.

Let us unfold the developments and small-scale business trends 2021 holds.

MSMEs and the Union Budget 2020-2021

The union budget suggests the following for the SME/MSME sector:

  1. Amendment of Factor Regulation Act, 2011 – It will result in the extension of invoice financing to the SME/MSME sector. They can make use of the SME working capital to cover short-term expenses.
  2. It recommended invoice financing loan products that are app-based for MSMEs.
  3. The launch of NIRVIK or Niryat Rin Vikas Yojana scheme introduces the MSME sector to higher export credit disbursement. It also provides reduced premium and increased insurance cover for the SME sector in India for 2021. This will activate substantial growth opportunities.
  4. It introduces a scheme to give subordinate debt that can act as quasi-equity to support MSME entrepreneurs.
  5. Also, the setup of an investment clearance cell, revision of turnover limits for availing tax benefits, and knowledge translation cluster setup to disseminate knowledge of processes are projected to change the dynamics of this sector.

Additional reads – Know More about the New Business Loan Schemes for SMEs

The aforementioned developments hold considerable significance, given the MSME sector struggles with the following:

  • Lack of income tax norms as GST has a threshold turnover rate that most do not qualify
  • Low-to-no financial buffer
  • Poor credit history, mostly due to delayed payments to MSMEs
  • Low or no formal registration due to their size

Nonetheless, the SME/MSME sectorholds promise with the measures and attempts from the government to accelerate the supply chain finance for the MSME sector in 2021. The concept of supply chain finance relies on the credit history of large firms to offer financing solutions to SME/MSMEs. And, they can avail of easy credit from financial institutions.

Additional Read – Importance of Reviving SME and MSME Sector Post Pandemic

The bottom line

Tata Capital is here to support SME/MSMEs throughout the country with their SME loan. You can rely on us to supplement your requirement of funds with loan amounts ranging from Rs. 5 lakhs to Rs. 75 lakhs.

Our competitive business loan interest rates for SME/MSMEs start from 19%, and the repayment structure is customisable to meet your business cash flow. We value the contribution of the MSME sector in the country, and thus, our offerings are in line with the effort to bolster the small-scale industry in 2021.

Make growth a habit with Tata Capital’s SME/MSME loans and customise the loan to meet your unique business needs. Connect with us today!

Apply Now

Give Your Business the Right Boost: Apply for a Business Loan Today

Apply now
Popular Searches
business idea udyogini scheme hsn code full form low investment business ideas top 10 most successful businesses to start transport business import export business in india mineral water plant cost collateral free loans
Disclaimer

Most Viewed Blogs

Trending Blogs

Calculator

Personal Loan EMI Calculator

Personal Loan EMI Calculator
Home Loan EMI Calculator

Home Loan EMI Calculator
Business Loan EMI Calculator

Business Loan EMI Calculator
Used Car Loan EMI Calculator

Used Car Loan EMI Calculator
Two Wheeler Loan EMI Calculator

Two Wheeler Loan EMI Calculator
Loan Against Securities Calculator

Loan Against Securities Calculator
Loan Against Property Calculator

Loan Against Property Calculator
More Tools
Our Subsidiaries
Our Other Websites

Important Information

Investor Information

Visit us on:,Visit us on: www.tatacapitalmoneyfy.com,www.tatacapitalmoneyfy.com

Our Private Equity Funds

Amalgamated Companies

Top Branches
Most Important Terms & Conditions - Home Loans

Download in your preferred language

Download

Policies, Codes & Other Documents

Most Important Terms & Conditions - Home Loans

Download in your preferred language

Download

Tata Capital Solutions & Services

Uh oh, something went wrong

Please try again later.