Arrow icon Blog
May 13, 2022

The Role of Different Types of Assets in the Growth of an MSME

    • May 13, 2022
    • By Team Kinara
    • < 1 mins read

    Business Loans

    Assets play an indispensable role in enhancing the overall business value, generating revenue, and sailing through routine operations with ease. As a small business owner, you need to be aware of the different types of assets and ways to judiciously utilize and expand them to move forward in the industry.

    A combination of different types of assets is collectively classified as business assets. They enable enterprises to proliferate in their niche and effectively scale to gain a competitive advantage. In this article, we look at the role of different types of assets in the growth of an MSME.

    Get a collateral-free business loan in 24-hours

    Assets: A Brief Insight

    Assets are defined as a resource that is owned by a business enterprise and has an economic value that promises a certain benefit in the future. For businesses, assets are recorded on the balance sheet and can create an inflow of cash immediately or on a future date.

    Assets allow entrepreneurs to ascertain the business value by simply subtracting the liabilities from the company’s assets. This is known as the asset-based approach to evaluating the business value.

    Different Types of Assets

    Here is a detailed look at the different types of asset categories:

    • Current assets: These include all the assets that can be seamlessly utilized within one year of business operations. This type of asset includes cash equivalents, cash, inventory, pre-paid liabilities, accounts receivable, and other liquid assets.
    • Intangible assets: These types of assets do not reflect on the company’s balance sheet but have a significant impact on the total asset value of an enterprise. These assets aren’t physical in nature, some examples are trademarks, patents, licenses, and goodwill are some examples of intangible assets.
    • Fixed assets: Fixed assets are vital to ensure the survival of an enterprise, these are physical long-term assets that a business owns. Machinery, land, building, and vehicles are some of the best examples of fixed assets.
    • Non-operating assets: These are the types of assets that are not important to routine operations but are still capable of generating ample income for a small business. These assets include vacant land, unused equipment, loans receivable, short-term investments, and fixed deposits.
    • Operating assets: These are the assets used in the routine operations of a business. Cash, machinery, equipment, prepaid expenses, and accounts receivable are some examples of operating assets.

    Building Your Assets

    It is safe to say that assets play a significant role in the expansion of a small business. A precise illustration of the assets, both tangible and intangible, can enable small business owners to ascertain the exact financial stature of their enterprise.

    Moreover, having a clear understanding of the different types of assets qualifies as one of the foremost ways for MSMEs to grow in a competitive environment. But is buying assets enough to ensure the linear growth of an MSME?

    While buying assets is important, building assets is what contributes to the growth of an enterprise. Here are some ways that can help small businesses build assets:

    • Payscale: Your workforce is your greatest asset. One of the best ways to transform your employees into assets is by paying them as per market value. Treating your employees as essential assets can help retain the best of them. It is always best to retain your best employees than hiring one after every six months.
    • Brand building: Small business owners can focus on brand building with the help of some simple yet effective practices. Hand out gift boxes with your brand sticker to suppliers, consumers, and employees on special occasions. Furthermore, you can curate customized uniforms for all employees and invest in packaging that reflects your brand no matter where it goes. The small details can eventually contribute to building your brand image.

    Kinara Capital: Facilitating Asset Purchase for MSMEs

    We provide collateral-free business loans to aid MSMEs in purchasing the required machinery to expand their business operations with ease. You can apply for an asset purchase loan by downloading the myKinara app or visiting our website and taking the one-minute eligibility test. You can also call our toll-free number 1800-103-2683 if you want our local Kinara officer to visit you and help you through the entire loan application process in your preferred language.

    Check your eligibility in just 1-minute!

    Apply Now
    Written by
    Team Kinara
    • Tags
    • Growth of MSME
    • MSME
    • MSME loans
    • Asset Purchase Loan
    • Business Loan
    • Small Business
    • Machinery Purchase

    Collateral-free business loans in 24-hours!

    Apply Now