Quick Business Loans for SMEs and MSMEs

Many enterprises launch themselves with great hope and confidence. However, on an average, one in every four start-ups fails to make it past its first year due to a paucity of funds. Low profits, high overhead or unforeseen expenses, incorrect product pricing, and overstocking of inventories can lead to negative cash flow for any small or medium enterprise (SME).

When the paucity of funds has been created by dubious business strategies, the owners need to review their style of working and make required changes. Other than that, there are times when the enterprise is doing well in its industry and simply needs some additional funds to add more facilities for customers/employees, buy raw materials, develop new product features or expand the business to a new location.

A lack of adequate working capital for such steps towards growth or innovation does not imply that the business is unprofitable. It merely needs to ask for an SME loan from a formal lenders at this stage.

While there are multiple sources of any SME or MSME loan, the priority of borrowers who are keen to execute a profitable business plan or fund the expansion of their venture is to get a quick business loan for SMEs/MSMEs. They do not want to miss the opportunities at hand and search for lenders who can finance their plans in minimum time.

How to get the fastest business loan ?

In an age when digital technology is facilitating different transactions for both businesses and consumers, several non-banking finance companies have emerged as FinTech (acronym for financial technology) lenders who have condensed the loan-granting process. A FinTech company can be the source of fastest business loan for SMEs/MSMEs.

Applying for a Quick Business Loan and Its Benefits –

As a leading FinTech company offering fastest business loan for SMEs/MSMEs, Capital Float funds the growth of Pvt Ltd, Prop and LLP companies in various industries. We have an array of credit products for SME and MSME units that have robust strategies for continual progress in their domains.

To make a working capital loan accessible for more and more businesses, we at Capital Float have a simple eligibility criterion that only requires the borrowers to show a potential for growth in their industry. This efficacy can be proven with a minimum operational history of one year and a certain yearly revenue benchmark, which differs as per the nature of the business/profession, and can be checked on our website or by calling our team at 1860 419 0999.

The process of applying for our SME loan is fully digitalised, and it takes less than 10 minutes to fill in the necessary details. The relevant documents can also be uploaded online to support the information provided in the application. These generally include soft copies of papers validating business ownership, KYC documents, ITR/GST returns and recent bank statements.

Once it is submitted, we review the application on the same day, and upon approval, the requested amount is disbursed within 48-72 hours. The speedy disbursal of funds enables the borrowers to implement their business upgrade/improvement/expansion plans and advance on their profitable journey. The returns from such steps for business growth also make the repayment process stress-free.

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If you have a business plan that will take your ambitious venture to its next stage of growth, Capital Float has a quick Business loan for SMEs/MSMEs that you can use to finance it. For more information on our loans or to meet us personally, do write to us on info@capitalfloat.com

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Overview of GST and Important Timelines

The Goods and Services Tax (GST) is proposed to be implemented from July 01, 2017, and will effectively change the face of indirect taxation in India. Some of the key benefits expected include a simpler and more transparent tax system that will reduce tax evasion and boost revenues; more competitive manufacturing, especially in the MSME sector, thanks to reduction in tax cascading; and improved GDP due to a wider coverage of goods and services. This attempt towards bringing to life a “One Nation, One Tax” legislation will have far-reaching implications on every citizen, and will impact business finance and personal finances too. This is especially true for SMEs, as they will see a direct impact on their working capital. It is therefore prudent to plan for this crucial event.

Here is all you need to know about the GST rollout.

What is GST

GST is a unified system for indirect taxation, leading to the establishment of a new four-tier indirect tax structure that replaces the existing indirect tax regime. Essentially, four new indirect tax slabs will come into effect, i.e., goods and services will hereafter be taxed according to the slabs of 5%, 12%, 18% or 28%.

Rate of Indirect Tax Goods/ Service
Exempt Goods of mass consumption such as grains and milk
5% Essential items such as edible oil, tea, coffee, insulin, incense sticks, etc. that are exempt from excise duty and are charged at a VAT of 5%. Certain processed foods like sauces, pickles, and preserves as well.
12% Goods currently taxed at 9% to 15% such as processed food and computers
18% Goods currently taxed between 15% and 21% (soaps, smartphones, utility electronic items and, industrial inputs).
28% Luxury goods such as SUVs, select consumables (aerated drinks, tobacco), white goods (AC, fridge) and goods that fall under the current tax bracket of 30% to 31%. Luxury and select consumables will attract an additional cess.

These four structural slabs allow a provision to charge a maximum of 40% GST rate, i.e., a combination of 20% Central GST and 20% state GST.

Services will be taxed at a standard or default tax rate of 18%. Only five luxury services, i.e., five-star hotels, movie tickets, racing and betting (racing and casinos) will fall in the 28% tax bucket. E-commerce companies will be subject to 1% tax collected at source.

The build-up to the GST: A track of timelines

The story began with the Central Government releasing the Revised Model GST Law for public purview on November 26, 2016, and the setting up of the GST Council to discuss and approve the Bill. Thereafter, the Council met on subsequent occasions to discuss and approve the section terms, and targeted a rollout date of April 01, 2017. The latest is a meeting held on 11th June, wherein the tax rates for 66 items have been reduced. A rollout date of July 01, 2017 has now been set. As a result, four legal bills have been presented and passed for different categories:

  • Central GST Bill (CGST): For supply of goods and services by the Central Government within the boundaries of a state.
  • Integrated GST Bill (IGST): For supply of goods and services between different states, carried out by the Central Government.
  • Union Territory GST Bill (UGST): For supply of goods and services in the Union Territories.
  • The Compensation Bill: To govern the provision of compensation for revenue losses brought on by GST implementation, over the next five years from implementation.

All four bills have been passed in the Lok Sabha and subsequently the Rajya Sabha after a series of changes at the Centre. These bills have received approvals from 16 state assemblies with Delhi being the most recent.

Rules and Acts under the GST

The Government is also in the process of driving the GST Council to put together rules and acts for GST implementation. Following are the GST rules passed till date: Composition Rules, Valuation Rules, Transition Rules, Input Tax Credit Rules, Invoice Rules, Payment Rules, Refund Rules, Registration Rules and Return Rules.

Proposed outcomes of the GST for the Government

According to Finance Minister Arun Jaitley, India will evolve to be a more tax-compliant society thanks to the GST. He also clarified that the GST would not lead to inflation, addressing the Opposition’s concerns in the Rajya Sabha.

Here are some of the key benefits of GST:

  • GST will cover the GDP more comprehensively by covering a wider base of goods and services A single indirect tax regime will be instrumental in removing cascading taxation, i.e., tax payment upon tax, or multiple taxation.
  • GST will eliminate any direct interaction between the assessing authority and the tax payer by standardizing and automating processes, and will interlink incentives for compliance, making the tax system more accountable.
  • Overall and on an average, tax slabs may see reductions and the industry may benefit from the greater cash flow that will ensue.

Despite these proposed gains, a closer look at the GST reveals certain drawbacks. Four slabs is a significant number of tax slabs for a unified tax regime, and the tax rates appear to be high. These factors are likely to lead to tax evasions and legal battles.

Proposed outcomes of the GST for tax payers and businesses

For businesses, the implications vary. The “Place of Supply” and the “Time of Supply” are two important considerations that businesses must reflect on.

Goods and service providers will be subject to the tax slab depending on the “Place of Supply”. If the “Place of Supply” is intra-state, then each company entity will need to register separately for the GST in each state of operation, and will be liable to a mix of CGST and the respective State’s SGST. For “Place of Supply” being inter-state, the business will need to register in the state of origin and avail IGST in the remaining states. This makes it imperative for businesses to register correctly to levy the appropriate taxation rate.

Business norms for supplier management will change, with input credit being made available to businesses, but compliance requirements will become more stringent, leading to additional costs for businesses. Businesses must therefore be prepared to plan their cash flows better in light of the GST implementation. This is particularly true with regards to input tax credit, which can have strong implications on working capital for SMEs. This might create a cash crunch in the short term, but will equalize over time.

With the GST rollout fast approaching, it is best to stay informed and be prepared for this sweeping change. We at Capital Float can help you do just that: Visit our GST blog to know more about GST and keep track of latest.

Oct 24, 2018

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Digital Marketing for SMEs: Business without boundaries

Information availability and decision-making is becoming increasingly dynamic in nature. This constant state of change has impacted customer expectations and many organizations are grappling to keep up. Amidst this chaos, a few companies have found opportunities and strategies to leverage this change.

Most companies which are successful in understanding and fulfilling new-age customers’ expectations have exponentially grown and created very strong value propositions and brands in the minds of the customers.
Some proponents of change defining the business ecosystem today are big data, cloud computing, mobile and content. Digital Marketing as a science, art or technique sits right in-between all of these factors. Is digital marketing complex and difficult to understand? Is it a type of marketing that only large companies with large budgets can afford to execute? Read on to find out.

In many ways digital marketing has democratized business reach to consumers. It has presented a level playing field for small and large brands alike. This is one platform where intellect and ingenuity trumps everything else.
Applications of digital marketing are aplenty – from exploring new markets to growing a stronger brand in existing markets, all in a budget that you can decide and control in real-time.

In this day and age, the question isn’t whether you should do digital marketing, but rather, the pertinent questions are “how” and “where to start from”. Following are 5 simple things small businesses can implement to mobilize their digital marketing:

1. Website for E-Commence and Product Catalog
A website is just like a salesperson. It may need attention and hand-holding early on, but over a period of time, it becomes independent, yielding a steady stream of income. Do bear the following aspects in mind while building your website:
• Does your website have all the information that you would like your customers to know?
• Does your website provide your contact details in case the customer wants to place orders or make enquiries?
• Is it easy for the customers to navigate and find information about your brand and products?
• Is your website persuading customers to take specific actions?
• Is it easy to update information on your website?
Once you have all the content ready for your website, you can use one of the many website builders to set-up the framework. Most of these builders offer plenty of templates and customization options. In case you plan to sell your products online, some of the payment gateway companies can offer to set up the infrastructure for free. Sounds complicated? It’s not. You needn’t be a software geek to implement a fully-functional website.

2. Create local awareness about your business
It is quite possible that some of your prospective customers, even though located very close to you, may have never heard about you. Even if they have heard of you, they will resort to searching information about you on the internet.
Facebook and Google provide you with options to create local awareness and an identity on the internet. You can even place your business on Google maps to help customers locate you. All of this at little or no cost.

3. Catalyze word of mouth with referral schemes
Very few marketing campaigns can outshout the voice of a customer operating as a brand ambassador. While social media can intensify word of mouth, it takes experimentation and genius to go viral.
Win-win referral schemes help you achieve similar results with greater certainty.
There are plenty of plug and play tools which can help set-up referral schemes, leverage your customer’s social network and give your brand a fair chance of going viral. You can track and manage these schemes on the go. Much like your website, these tools are very easy to implement.

4. Advertise on Digital Media
It would be wise to advertise online if a good portion of your customers reside on the internet. Digital advertising unlike conventional advertising is highly targeted and permits small spends. You can choose from promoting your brand in existing markets to exploring new opportunities in new locations, all at the click of a button. And the good news is, all major online advertising platforms provide advertisers with account managers to help them set-up and run marketing campaigns. If you are lucky, you may even find free coupons to run your campaigns.

5. Email-Marketing to connect with your customers
Emails are a very convenient and effective way of communicating to your customers. You can use emails to inform your customers about new products, features and offers. Free guides and manuals can help your customers use your product better.

E-mail provides for two-way communication; feedback enables you to know if your email was received with a smile or a frown.

Much like this blog, you will find plenty of guides, free tools and services that can help you execute digital marketing. It may be tempting to do all of the above or possibly more to join the digital business bandwagon, but begin by evaluating your options and strategizing accordingly. If executed well, one or two targeted options are likely to provide better results rather than a scatter-gun approach.

Hope these points demystified digital marketing for you. So go on, roll up your sleeves and get ready to build a business without boundaries.

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Samarth is a marketing professional with expertise in Digital Marketing. Lead generation, customer engagement & retention, brand building and people development are some of his areas of interest. During his leisure he likes hanging out with friends & family, riding his bike to nearby destinations (sometimes even without a destination), watching movies​ ​​and reading.

​Samarth is a Marketing Manager at Capital Float.​

Oct 24, 2018

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Your Concise Guide to Choosing a Business Bank Account for Working Capital

Having a dedicated business bank account is important for business owners to effectively manage and utilise their working capital. With a simple segregation between personal and professional funds, the day-to-day transactions will be easier to track and document. It is also essential for compliance in IT returns filing and will help you to identify the correct deductions for your tax savings.

In India, small and medium enterprises (SMEs) generally use current accounts to manage their funds and to get a working capital loan. While no interest is received from these accounts, lately some banks in the private sector have started offering interest to attract more buyers for opening accounts with them. As a part of their services, the banks also provide working capital finance to their eligible customers with current accounts. However, these grants are sanctioned upon the pledging of an asset as collateral. Industrial, commercial or residential property or liquid securities have to be pledged while borrowing funds for business from a public or private sector bank.

With the availability of working capital financing solutions from digitally operating NBFCs – known as FinTech (technology) companies ¬– entrepreneurs can now have their dedicated business bank account and procure loans without pledging any collateral. These online platforms provide financial the benefits of less stringent terms and flexible repayments.

The question then is – how to choose the right bank account for business transactions? Most banks have now customised their current accounts into different sub-categories, and an enterprise can choose one based on its annual turnover and particular needs. The key expectations from such an account are:

Salary solutions for employees: You need to pay your employees on time every month, and may have to remit their remuneration through dedicated salary accounts or crossed cheques. The business bank account must make the execution of these processes simpler.

Digital banking services: In an era where all personal banking transactions can be done online, current accounts must also come with a host of online banking services. Your account must give you the flexibility of transferring funds anytime, anywhere, and of making regular payments on working capital demand loan that you may have procured from another financial institution. In addition to net banking, services such as phone banking, mobile banking and quick reverts on SMS-based queries are looked forward to as well. Mobile instant alerts on transactions must be provided by banks in the digital age.

Cheques payable at par: Your business bank account should offer the provision of personalised cheques payable at par across India. This conventional facility is good for business owners who prefer to use cheques over online banking for making payments to their employees, vendors, suppliers and to the companies that issued working capital finance to them.

Competitive foreign exchange rates: If your business operations involve buying from or selling to other countries, you will need seamless foreign exchange transactions. Choose your current account from a bank that offers competitive rates on foreign exchange rates routed through them.

Zero balance account: No business wishes to reach a point where they have zero balance in their bank account. Nevertheless, there can be tough times in the market and you may experience some strain on your finances. For emergencies, your business current account should allow you to reach zero balance even if it is for a temporary period. There should be no ‘penalty charges’ on such accounts. You can always update the balance with relentless focus and consistent efforts while working on your business objectives.

Where a zero balance account is not possible, the minimum monthly average balance (MAB) must be made affordable for SMEs. Alternatively, the penalty for non-maintenance of minimum balance must not be very high. Do not hesitate to compare business accounts of different banks on this basis. Your working capital finance provider may also be able to guide you here.

Interest rate: We had mentioned earlier that current accounts do not usually involve interest earnings. This had been the norm in the banking industry for decades. However, with an increasing competition between public and private sector banks, things have changed. All financial institutions are trying to enhance their brand image in the industry by offering products that are more attractive to prospective customers. In this race, they have started delivering interest on idle money in business accounts while also giving the flexibility of accessing the funds anytime. With interest earnings on your account, you can also speed up the payments on your working capital loan procured from any source.

Businesses do have good reasons for applying for a separate banking account, and it also proves their creditworthiness to sources of working capital loan in India. Non-banking financial companies (NBFCs) and FinTech lenders can directly disburse funds into a current account.

The documents needed to open such accounts vary from bank to bank and depend on the type of business. Those investing in their start-ups are often asked to submit copies of their latest IT returns, PAN Card and ID and address proofs such as Aadhar Card or Passport copy. Partnerships, Limited Companies, Trusts, Associations and other corporations that involve more people and hire employees need extra documentation, which among other things must also include the registration deed for the business.

Further, check the fee and applicable charges on these business accounts. There may be charges for remittance facility from other banks, for the maintenance of debit cards and duplicate or ad hoc account statements.

As a FinTech lender, Capital Float disburses loans into your accounts in a duration as short as 3 days, helping you to keep going further for the consistent success of your venture. We have an array of loan products to help you work on the seamless growth of a project that you have enthusiastically nurtured.

Oct 24, 2018