SME Finance in today’s world is limited to successful Business enterprises with strong financial credentials. An SME is surrounded with the undeserved market and it is difficult for him to cope with this biased behavior of financial institutions.

A Government report stated, ‘SMEs are not aware of the existence of these alternative sources of finance. This is a market failure, of imperfect information, resulting in SMEs that are viable loan propositions not receiving the finance they need.’

In Today’s world, the financial service market is growing at a fast pace but it still needs to do a lot to elevate unorganized portion of the society, gearing up the market for funding to the MSME sector. Technology will play an integral part in the near future, and will push companies to evolve.

Here are some useful tips to get on your applications for funding:

Online Lending
Nowadays when you are hit with the question how to get a Business Loan and where to get a business loan, the easy solution is reaching to an online lending services platform. The process cycle is much faster and the service providers take the full responsibility of getting the loan application to the banks and financial institutions.

Factoring/Bills Discounting
Don’t want to get a business loan? Services like factoring and invoice advancing may be the substitute for fulfilling the funding requirement of small businesses. Through this process, a service provider will front you the money on invoices that have been billed out. Factoring is the sale of receivables whereas invoice discounting is borrowing where the receivable is used as collateral.

Angel Investors
Angel investors have helped to start many companies. This alternative form of investing generally occurs in the early stages of growth, with investors expecting 15 to 20 percent return on their investment.

Venture Capitalists
Venture Capital is a form of financing to support start up companies or small companies .This is a group of wealthy investors willing to invest in a company with a long term growth perspective. Venture capitalists owns a percentage stake in the company and has full rights to involve in all the decision making process.

Assure that your business generates steady cash flows
Cash is termed as the king in any business which is a well known fact. By being able to demonstrate that you have ample and/or steady cash flow, you are ensuring to potential financers that you have plenty of money to pay creditors, employees and others on time. Financial statements, tax returns and bank statements portray the historical perspective of the performance and Liquidity of the business.

Transparency on the status of your business – the good and the bad
If you are unable to make a loan payment on time, discuss all the possible issues with your lender in advance, in order to execute the best possible solution for your requirement. Explain the sources of repayment.

Today’s word is filled with lot of possibilities of getting finances through various platforms via digital marketing, professional advisors and online lending system as compared to traditional approach of banking for SMEs.

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