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Types Of Sme Loans Offered To Businesses

By Author: Aishwarya Mahurkar
Total Articles: 291

SME finance is the funding of small and medium sized enterprises and business for a variety of needs. Most small and medium sized enterprises are not able to afford the finances they require to expand or improve their businesses. There are a variety of SME loans which financial institutions offer to help such businesses grow:


Property term loans


This type of an SME loan in India is ideal for businesses which require extra capital for their expansion and working capital requirements. Working capital is the everyday requirements that every business requires to run. For every business to succeed, they must always strive to do better and expand. Hence business owners must take advantage of this loan and use it to invest in assets that will help the enterprise flourish. This loan offers up to 20 crores to the borrower and has a flexible repayment period of 8 to 15 years. The minimum documentation required makes it the ideal SME loan when needing to purchase property.


Plant and machinery loans


Every business with a manufacturing unit requires a certain amount of plan and machinery to function. When an enterprise expands, they have to increase the amount of plants and machineries to increase the production. A plant and machinery loan allows a business to purchase the machinery which is extremely expensive. The loan offers businesses up to 10 crores for tenure of 6 years. The financial institution keeps the plant or machinery as security until the loan has been repaid.


Medical equipment loans


Medical equipment is extremely expensive and most small and medium enterprises cannot afford to purchase it. It is crucial for any medical business to always own the latest medical equipment to ensure their growth and success in the field. This type of SME loans offers a credit of up to 10 crores for a tenure of 6 years. The financial institution owns the medical equipment purchased until the enterprise has repaid the loan.


Business loans


This is a short term SME loan which can be used by a business for a variety of purposes. Financial institutions offer business loans for a tenure of 5 years at a maximum amount of 35 lakhs. Unlike the other SME loans in India, this loan is unsecured. However, a business must never use such a loan to repay debts. Such a loan must only be used to help the business grow.


There are a variety of SME loans offered by financial institutions for specific purposes. Every business must plan in advance their reasons for applying for such a loan as well as how they plan on spending the money in the best manner possible.

Author Bio :

The author is a seasoned writer on finance topics and she articulates aspects that are important to people availing the SME loan in India facility. She writes about a variety of topics covering the home loan documents, rates & business loans that help to make the best decision.

Total Views: 75Word Count: 487See All articles From Author

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