Grow Your Small Scale Industry with a Small Scale Business Loan

May 18, 2022

By Team Kinara

< 1 mins read

MSME Loan

Small-scale industries in India have faced a multitude of challenges in the past two years. From worker migration to logistical difficulties to a lack of working capital, small businesses have truly persevered and are now on a growth path. A silver lining of COVID has been the rapid digitisation of the small scale business.

As the world gradually unlocks, small-scale industries continue to face certain hurdles in their business operations. The increase in raw material prices, higher cost of transactions, and capital crunch are all ongoing challenges.

A small scale business loan is one of the best ways for small manufacturers to tackle financial setbacks and expand operations. In this article, we look at how you can grow your small-scale industry with the help of a small scale business loan.

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What is a Small Scale Industry?

Before we understand the benefits of a small-scale industries loan, let’s understand what a small-scale industry is and some of its features.

A small-scale industry is defined as an industry where the production is done on a micro or small scale. These industries make an investment in equipment, machinery, or plant with a total investment not exceeding Rs 10 crore. Furthermore, the annual business turnover of a small-scale industry is not more than Rs. 50 crore.

Small-scale industries produce and provide services with the help of less manpower and smaller machines. Considered as the lifeline of the economy, small-scale industries in India should come under the guidelines set by the Government of India.

Small-scale industries rely heavily on labour and are responsible for generating ample employment opportunities.

The Benefits of Registering a Small-Scale Industry in India

While registration is not mandatory for small-scale industries to operate in India, it has its own share of benefits. Let’s take a look at some of the benefits of registering a small-scale industry in India:

Registering an SSI in India will help you get easy access to credit
A registered SSI in India can bid for government tenders
It makes it easy to get rebates, state government incentives, and concessions that further minimize the cost of obtaining patents.

Types of Small Scale Business Loans Available for SSIs

Small manufacturers in India can choose from a plethora of options when it comes to acquiring the right amount of capital. The following are the types of small scale business loans that can be availed:

Asset purchase loan: Machinery is a vital part of the operations of a small-scale industry. Small business owners can avail an asset purchase loan to invest in new or second-hand machinery for their enterprise. This can improve the overall production capacity and enhance the efficiency of operations.
Working capital loan: Small business owners have to maintain and manage the routine cash flow of the enterprise to ensure long-term sustainability. A working capital loan can help your manufacturing firm meet its daily expenses such as rent, wages, raw materials, renovations, etc. A working capital loan allows business owners to maintain a healthy cash flow and seize new opportunities for business growth.
Special loans for women: Women entrepreneurs have long faced disparity when it comes to acquiring the required amount of capital to commence or expand operations. Formal banking institutions have deemed women entrepreneurs under the ‘high risk’ category and hampered their ability to grow in the manufacturing sector. However, the advent of special loans for women has closed any financial gaps and allowed women entrepreneurs to soar in the competitive landscape.

Acquire a Small Scale Business Loan from Kinara Capital

We offer collateral-free business loans for small entrepreneurs operating in the manufacturing, trading, and service sectors. As a socially responsible fintech, we have enabled small manufacturers to bring economic prosperity to their communities with job creation and income generation. Our small scale business loans have enabled small manufacturers to exhibit significant income growth, curate job opportunities, and fortify local economies.

So, expand your small-scale industry with a small scale business loan and make an impact where it matters!