In India, small business owners have option to choose from a slew of business loans provided by various banks and non-banking financial companies (NBFCs). But a number of studies still suggest entrepreneurs find it difficult to avail credit on time.
The government of India has launched a number of schemes – the MUDRA loan scheme and the stand up India scheme – to make credit available easily to small businesses and start-ups. Likewise, the banks and non-banking financial companies (NBFCs)
In India, both banks and non-banking financial companies (NBFCs) provide different types of loan products to the small and medium enterprises (SME). Some of these loan products are collateral-free, whereas others require the borrower to pledge his personal or business
Most small businesses finance their temporary working capital needs through short term business loans. Unlike long term loans, short term loans need to be repaid within one year. But lenders charge a higher interest rate on short term business loans