There are more than 20 lakhs micro enterprises, more than 8,500 medium enterprises, and more than 2 lakhs small enterprises (according to the Udyog Adhaar Memorandum or UAM). Similarly, the manufacturing sector and services sector saw filings at the UAM close to 10 Lakhs and 12.5 Lakhs respectively. The contribution of MSMEs was 30.74% to the GDP in the FY 2014-2015. Non-Banking Financial Companies or NBFCs and various housing finance companies contributed a staggering Rs. 2.60 Lakh Crore to the above enterprises. It was 18% of the credit requirements of these businesses.
It is possible for MSMEs to access credit easily from the NBFCs. There are many NBFCs such as Bajaj Finserv as one of the prominent ones. These NBFCs render flexible business loans. Business line of credit is one of them.
Features of Business Line of Credit-
- Flexible withdrawal of funds:
In Business Line of Credit you get fixed credit line and for a given tenure. Within this credit limit you can withdraw any amount any number of times in the allowed period of time. - Interest only on the amount utilized:
Whatever amount you utilize out of the credit limit you need to pay interest only on that not the whole credit line. - EMIs will cover the interest rate initially:
You need to pay your EMIs as only for the interest till you repay it fully. The Principal part will be covered later on once the tenure is over. This helps in keeping your EMI low.
Everything You Need to Know About Business Credit line
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