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Small businesses are a big part of a strong economy. They create new ideas, give people jobs, and bring useful products and services to local areas. According to the Ministry of MSME, India has over 63 million micro, small, and medium enterprises, contributing nearly 30% to the country’s GDP and generating over 110 million jobs. But while these businesses have great ideas, they often don’t have the money they need to grow. Many small business owners find it hard to get loans from banks. That’s where NBFCs—Non-Banking Financial Companies—can help. These companies give small businesses the support they need to grow and succeed.
In this blog, we will look at how NBFCs help small businesses in different ways:
- Helping with money when banks say no
- Different types of NBFCs for different needs
- Using new technology to make loans faster and easier
- Giving simple and flexible loan terms
- Making the loan process quick and easy
All these things help small businesses grow and do better in today’s fast-moving market.
Helping with the Money Gap
Access to funding remains one of the biggest challenges for small business owners. Despite having strong ideas and market potential, many businesses struggle to secure financial support from traditional banks due to strict rules, long approval times, or a lack of collateral.
As a result, they often miss out on key growth opportunities, such as hiring more employees to meet rising demand, purchasing new tools or equipment to boost productivity, or opening new branches in high-potential areas. These missed chances can limit their ability to grow, compete, and succeed.
NBFCs help fill this gap. They are more open and flexible than banks. If a small business doesn’t meet all the bank rules, NBFCs are still willing to help. They offer loans, leases, and other money services that help companies move forward.
In India, there are many kinds of NBFCs. These include finance companies, housing finance companies (HFCs), leasing companies, and microfinance institutions (MFIs). Each one offers something different to match what a business needs. Some give small loans to rural business owners, while others help with equipment or housing needs.
According to the RBI, NBFCs in India have seen a 20% year-on-year growth in credit deployment in FY 2023, showing increasing trust and demand among small business borrowers. This shows that more and more businesses are turning to NBFCs for support when banks can’t help. The growth is especially high in tier 2 and tier 3 cities, where traditional banking access is still limited.
Using Technology to Make Financing Easier
Technology has changed the way businesses work, and also how they get money. NBFCs use new tools like artificial intelligence (AI), machine learning, and data checks. These tools help make better and faster lending choices.
NBFCs use this technology to quickly check if a business is ready for a loan. This helps businesses get money faster than they would from a bank. In fact, many NBFCs now offer loan approvals within 24–48 hours, making them a smart choice for urgent funding needs. Some even offer completely digital loan applications, where business owners can apply, upload documents, and get approval all online.
NBFCs also offer useful tools to help businesses work better. This includes automatic payment systems, business software, and expert advice. These tools make everyday work easier and save time.
By using digital tools, NBFCs reduce paperwork, avoid delays, and provide a smooth experience. This is important for small businesses that do not have time to manage long and complex loan processes.
Simple and Flexible Loan Terms
Another good thing about NBFCs is that they offer flexible loan plans. Unlike many banks, NBFCs let business owners pick how they want to repay their loans. Some can pay weekly or monthly. Also, late payment fees are usually lower.
This makes it easier for small businesses to manage their money. They don’t feel stressed about big payments and can focus on growing their business.
This is why many small business owners like working with NBFCs. The simple and friendly terms help them feel more in control of their finances. For example, many NBFCs offer structured EMI plans that match the seasonal cash flow of small businesses, which is very helpful in agriculture, retail, and travel sectors.
NBFCs also understand that not every business has the same needs. Some offer small ticket-size loans with minimal documentation, while others provide large loans for big projects. The flexibility in size, terms, and duration makes NBFCs a preferred partner for a wide range of industries.
Quick and Easy Processes
Small businesses need to move fast. Waiting for loan approval can slow them down. NBFCs know this, so they make the process fast and easy. Their systems are simple, so business owners don’t waste time on paperwork.
If a business needs money to grow, buy tools, or pay bills, NBFCs help make that happen quickly. They don’t make businesses wait in long lines or go through hard steps.
NBFCs also handle most of the background work. This means business owners can spend more time running their business and less time worrying about loan details. A quick turnaround time not only helps businesses grab market opportunities but also builds trust and long-term partnerships.
A recent industry survey shows that over 60% of small business owners find NBFC processes more customer-friendly than traditional banks. Many NBFCs also assign relationship managers who help guide borrowers through the loan journey, providing personal support and advice.
Related Post: Different Types of Loans Offered by NBFCs
Extra Support Beyond Loans
NBFCs do more than just give loans. Many offer value-added services such as:
- Financial advisory to help plan business growth
- Credit health checks to improve eligibility
- Insurance products to reduce risk
- Training programs for digital tools and financial literacy
These services show that NBFCs care about the long-term success of small businesses. By offering more than just money, NBFCs become true growth partners.
NBFCs also often run outreach programs in rural and semi-urban areas, where access to formal finance is low. These programs help spread awareness and bring financial services to more people who need them.
Conclusion
In today’s fast-changing world, small businesses must move quickly to grow and take on new chances. To do that, they need strong financial help. NBFCs give that support through fast, easy, and smart services.
NBFCs help with more than just money. They understand the needs of small businesses and offer helpful tools and support. From flexible loans to fast approval times and expert guidance, NBFCs are great partners for business growth.
As small businesses continue to grow and help the economy, NBFCs will be there to support them every step of the way. Whether it’s a first-time loan, digital help, or business advice, NBFCs are ready to make a difference.
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Read our article: https://nbfcadvisory.com/top-6-nbfcs-of-india-in-2022-and-their-performance/
