Growing a business without sufficient finances to meet operational costs is hard. As an entrepreneur, you must also manage costs such as salaries, raw material procurement, office stationery arrangements, and utility bill settlement to run your business smoothly.

Over the last few years, loan management systems have revolutionized how lenders manage the loan cycle—right from the time of application to the time of disbursal. It centralizes customer data, automates repetitive tasks, improves communication, and accelerates decision-making, streamlining the entire loan process. That’s perhaps why almost every financial institution has introduced these systems into their workflow.

Small businesses depend heavily on their cash flow to operate smoothly. They need funds to buy raw materials, pay utility bills, and meet other expenses incurred while running the business. However, there are times when the cash flow is unstable for reasons such as delayed payments, high overhead expenses, and lack of cash reserves. As a result, they need help to meet their orders on time, incurring huge losses.

Businesses need a healthy cash flow and sufficient capital to cater to their credit needs during their operations. However, not all businesses have these sources of funds at their disposal at all times. Businesses that run on a large scale approach the traditional banks for loans when they want to finance their credit needs. Small and medium enterprises (SMEs) cannot do so because they don’t have a strong credit history, and most of the time, these businesses are not registered. Hence, banks don’t consider them creditworthy enough to grant loans. That is where an innovative type of financing, known as invoice financing, can help these SMEs.

A business, regardless of its sector, has to be in line with compliance with the local laws of the place of its operation. Compliance is an integral part of every business, and a sector like banking and finance cannot be left far behind in this. As it involves running on people’s money, the banking sector takes compliance very seriously. If not followed properly, bank compliance can lead to banks losing their license to operate in the country, thereby leading to a severe loss of reputation and goodwill among their customers.

Creditworthiness is one of the first things that banks or any other lender would check when customers or businesses apply for a loan. This is done to check if the borrowers can repay their loans within the stipulated time. The numerical value for this creditworthiness is called the credit score. A credit score for a business loan is very important, as it decides if a particular business is eligible for getting a loan from a bank or not. What factors affect this score, and what minimum score should businesses maintain to get their loans sanctioned? Let’s find out in the sections below.

Though small and medium enterprises play a vital role in India’s overall economic growth, they are way behind when it comes to receiving timely credit assistance for their operations. According to a World Bank Report, formal SMEs alone contribute to up to 40% of a country’s GDP in emerging countries like India. This number could go up significantly higher when the informal or unorganized SMEs are included. By 2030, SMEs could generate up to 600 million jobs globally. However, the lending infrastructure for SMEs is not as comfortable as one would expect to support this growth. What are the challenges that SMEs face when it comes to infrastructure lending? What is the future of infrastructure lending in India? Let’s keep reading below to find the answers to these questions.

Supply Chain Finance (SCF) is one of the modern financing solutions for businesses. It makes the relationship between the buyers and sellers in a transaction better than before. This mechanism is also known as reverse factoring or supplier finance. SCF aims to offer working capital finance and other short-term credit to improve the liquidity of all the parties involved in the transaction.

Factoring finance is a financing tool in which a business can sell its invoices (accounts receivables) to a third party (known as a factor). The factor pays the business a certain percentage of the total invoice amount, after deducting its commission rates. Why does a business need this type of financing? How does this system work? What are the factoring advantages and disadvantages? This blog touches upon various aspects of factoring finance that will answer these questions and more.

For such businesses that are involved in the production or manufacturing of goods, business equipment loan plays a crucial role in meeting their financial needs and goals. Businesses that require heavy or specialized equipment or machinery, usually face the challenge of bearing the high acquisition cost. These kinds of businesses, which include manufacturing plants, construction firms, healthcare facilities etc. need significant financial resources to invest in the necessary types of equipment. Now these investments are not only large in amount but also very unique which the traditional business loans or credit facilities cannot meet. This is where the business equipment loan comes into play. As the name suggests business loan for equipment has a specific purpose – to finance the equipment needs of a business.