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The Changing Ecosystem of MSMEs with Online Lending Platforms

Clix March 30, 2021

 

Over the last few years, business lending has witnessed a paradigm shift. Although the use of technology has been existent in the financial sector for several years, its speed of adoption has increased a lot over the last decade. The use of the internet has become prevalent in every lending transaction being conducted these days. Availability of smart devices, increased internet connectivity, and cheap internet accessibility have made crucial contributions towards transforming the traditional lending sector.

The use of the internet has set its foothold in the financial industry and has caused a significant shift from the traditional ways of lending. MSMEs (Micro, Small, and Medium Enterprises) are increasingly approaching online lending platforms to ease their business loan application and approval process. Simultaneously, the Indian government is also encouraging digital infrastructure, due to which more and more MSMEs are adapting online lending platforms.

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Evaluating the Potential of Online Lending for MSMEs

Online lending facility has created great alternatives for loans being offered through traditional lenders. Whether you want to apply for a business loan, calculate your EMIs, make your repayments, or make a query, you can do all this and much more through the online platform only.
The entire loan application, approval, and disbursement procedure is conducted online. As a result, these online lending platforms are proving to be a boon for MSMEs that faced challenges in getting a business loan from a traditional bank.

These days, MSMEs are facing different challenges that may hinder their growth, including lack of skilled labor, low capacity of production, competition from multi-national companies, difficult credit from banks, etc. So, businesses are looking for lenders who can listen to them and help them address these issues by providing them easy capital. An online lending platform makes things easier for MSMEs and resolve their tribulations with easy and timely credit. One such platform is Clix Capital that offers simple, easily accessible, and time-saving money lending services to MSMEs in varied industries.

Factors that are driving the Trend towards Online Lending Platforms

India’s loan infrastructure is rapidly shifting towards online lending system, and with easy availability of internet at affordable prices, there’s no looking back. Furthermore, traditional lending to businesses has a number of pain-points, as a result of which businesses are looking for alternative lending mediums. With the help of the internet, online lending platforms have been successful in addressing several challenges, including the following:

    • Lengthy loan processing time
    • Lack of transparency
    • Collateral requirements
    • Hefty documentation requirements
    • Hard to fulfil eligibility conditions

As compared to traditional lenders, online lenders have shorter loan approval time. Manual filling of forms is replaced with online data capture, thereby making the process extremely efficient and fast for both borrowers and the lenders. With credit data available digitally these days, the lenders can get a better insight into the applicant’s borrowing history and creditworthiness. While conventional lenders are still struggling to offer consumer-oriented lending solutions, online lenders like Clix Capital can stay ahead by providing flexible loan solutions with fast access.

What to Expect from Online Lending Platforms?

Online lending platforms strive to make your business loan application, approval, and disbursal processes as fast and easy as possible. They have simpler eligibility conditions and minimal documentation requirements to make finance easily accessible to you. When you apply for a business loan from an online lender, you can expect the following:

Ample Loan Amount: At an online lender like Clix Capital, you can get an ample loan amount of ₹ 5 to 50 lakhs, which you can apply depending on your business need.

Freedom of Use: Whether you want to buy inventory, expand your office location, buy a new commercial property, or purchase machinery or equipment, you are free to use the loan amount the way you want.

Flexible Repayment Tenure: Clix Capital has flexible repayment tenure from 12 to 36 months (12 to 48 months for self-employed professionals).

No Collateral: Many online lenders like Clix Capital offer collateral-free business loans so that you can concentrate on your business without worrying about your asset.

Simple Eligibility Conditions: With an aim to make business loan easily available, online lenders keep their eligibility conditions as simple as possible. For instance, Clix Capital’s eligibility conditions are as simple as the following:

    • Minimum 21 years of age at the time of loan application
    • Maximum 65 years of age at the time of loan term end
    • Any of the following types of business:
    • Proprietorship
    • Private limited company
    • A partnership firm in services, trading, or manufacturing
    • Closely-held non-listed company
    • Minimum turnover of ₹ 1 crore
    • Minimum 3 years of business history in the current work area
    • The majority of business routed via banking system, reporting audited financial statement for the last 2 years, or capturing turnover in the last year through GST returns

 

Minimal Documentation Requirements: These are the only documents you need to provide while applying for Clix Capital’s business loan:

    • Completed loan application form
    • Passport size photograph
    • Identity Proof, which may be your Aadhaar Card, PAN card, or government ID if you are a government employee
    • Address Proof, which can be your Aadhaar Card, passport, driving license, voter ID card, or utility bills for the last 2 months
    • Proof of Ownership
    • Financial Documents, which include the following:
    • PAN Card for a firm, company, or individual
    • GSTIN
    • 6-months bank statement
    • Copy of the most recent Income Tax Return form
    • Computation of income, audited balance sheet, and profit & loss account for the last 2 years
    • Proof of continuity of the business of 3 years, which can be your sales tax certificate, establishment, ITR, or trade license

 

All in all, the online lending platform has overturned the lending sector. The use of the internet is leveraged like never before. More importance is being given to simple, digitized, and modern steps. While traditional lending enterprises are suffering from reduced customer base, online lending platforms are gaining huge popularity among borrowers. With Indian government’s initiatives like Atmanirbhar Bharat and Digital India, the country has witnessed several small companies that need money to grow. Online lending platforms play a crucial role in fostering this ecosystem and bridging the gap with simpler, innovative, and easily accessible business loans.

If you are a small business owner in India and looking for funds to grow or expand your business, then take advantage of Clix Capital’s online loan application and approval process that you can complete within a matter of minutes. Just click on the Apply Now button and you are good to go with your loan application process.

For any queries, find us on Facebook, Instagram, LinkedIn, Twitter, or WhatsApp

You can also reach out to us at hello@clix.capital or call us at 1800 200 9898

 

 

 

 

 

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