Festivals are the time of the year when businesses also grow exponentially. 

Manufacturers, wholesalers, and retailers make use of this opportunity to bring more products with lots of offers. Any increase in the volume of business requires funding. The banking sector is the major backbone of retail and small businesses during these festive seasons. They offer various financial products at attractive interest rates to enable small businesses to perform well during festivals.

The government of India is coming up with a plethora of initiatives to support small business enterprises in India. “Vocal for Local” a Government of India initiative supports homegrown small business brands. The imports are reduced and the raw materials are procured from small businesses. The government is also tying up with microfinance institutions, NBFCs, and banks to provide business financing to small businesses.

Micro Small And Medium Enterprises (Msme) Are The Backbone Of Atmanirbhar Bharat

MSMEs are contributing to almost 40% of the Gross Domestic Product (GDP) of our country. This represents close to 40 million businesses in organized and unorganized sectors. MSMEs are foolproof business structures to generate employment and encourage balanced growth across the economy. The government of India has come up with lots of funding options for MSMEs to foster growth. The financial institutions encourage borrowing under GoI initiatives during festive seasons by providing attractive interest rates. Funding is extended to export businesses as well to promote international business. Here are a few popular financial products issued under GoI schemes through the banks. 

Loans Under MUDRA Scheme

MUDRA loans are low-cost unsecured small business loans aiding micro and small enterprises. Micro Units Development and Refinance Agency Limited (MUDRA) provides finance to Banks, Micro-Finance, and Non-Banking Financial Institutions (NBFC) which in turn re-finance to small businesses. The interest rate starts from 7.30% and the repayment tenure is from 1 to 7 years. MUDRA loans are available in all leading public sector banks and NBFCs. There are 3 types of MUDRA loans available.

 Udyogini

Udyogini is a small business loan scheme for rural women entrepreneurs launched by Women Development Corporation. The loan amount ranges from Rs 10,000 to Rs 3 lakhs with a 30% loan subsidy.

Stand Up India

Loans from Rs 10 lakhs to Rs 1 crore for first-time ventures in manufacturing, services, and trading. 

Credit Guarantee Schemes for Micro and Small Enterprises, and Credit Linked Capital Subsidy Schemes are a few other financing options backed by the Government of India. Most of the loans provided under the GoI initiative are unsecured. The interest rates are lower compared to the commercial loan products offered by financial institutions.

E-Commerce, Online Business The New Business Era

Red Seer, a strategy consultants company in 2022 reports that E-Commerce companies can expect to grow 28% during festival season year on year. It is exciting to know that USD 3 trillion was transacted through digital platforms in 2021 as per the PhonePe report. Corporate and personal gifting, apparels, electronics, and kitchen appliances are a great hit in the online market. E-Commerce loans and instant loans offered through digital platforms help small businesses to tide through the growing demand during the festive season.

Small Business Loans Are Offered During Festive Seasons

Here is a snapshot of small business loans offered by leading financial institutions

 

 Conclusion

Do not miss the small business loan offers during the festive season. They are one-time and can prove to be a great saving in terms of the financial cost. The business frontiers are opening big after the worst-hit pandemic. It’s time to boost your business exponentially by volume, customers, and geography. Gear up to apply for that thought small business loan. Make hay while the sun shines.

FAQ of How banking finance sector help small businesses for festivals

1:What is the interest rate on small business loans during the festival?

The normal interest rate ranges from 8.5% to 30%. It varies according to the type of loan and lender. You can get offers on interest rates during the festival season.

2:I’m running my business through social media. Am I eligible for a business loan?

Yes. Banks like Axis, ICICI, and SBI to name a few offer business loans for e-commerce businesses. You can check out E-Commerce loan products from SBI, Punjab National Bank, Bank of Baroda, and Syndicate Bank.

3:Which banks offer small business loans during festive seasons?

The major public sector banks SBI, Indian Bank, Canara Bank, and Punjab National Bank provide business loans during festive seasons. You can try private sector banks like Axis, ICICI, IndusInd, and Standard Chartered Banks as well. Non-Banking Financial Corporations like Tata Capital and Bajaj Finserv also provide various business loan products. 

4:What are the types of loans I can get for my small business?

You can get working capital loans, term loans, letters of credit, bank guarantees, and debt financing for your small business.

5:What is the maximum amount of loan offered for a small business?

It depends on various factors like your credit score, business growth, and credit history. It varies according to the lenders as well. In the case of an unsecured loan, you can get a loan up to Rs 10 lakhs. You can get up to Rs 50 lakhs as a secured small business loan.