For any modern business to sustain itself, financial stability is paramount. Whether you want to expand your operations, buy new equipment, or hire new staff, you will always need funds to cater to your business requirements. It is the fuel for any business to continue existing and growing. There are several options for you to manage your finances. You can opt for SME financing or raise funds through a small business loan.
Microfinance in India is one of the best options for small businesses to manage their finances without putting any further burdens. You can get a loan based on your requirement. The best part is that there is no need for collateral. Most financial institutions in India offer Rs. 50,000/- and can go up to Rs. 1 crore, depending on the type of business you have. Also, it is imperative to show your financial dependability if you want to get SME financing for your small business.
Different ways to improve your financial stability to get an SME loan
Financial stability in your business means that you can take on usually ups and downs of your business without putting any burden on your shoulders. Besides that, it ensures a convenient and quick to get small business loans in India, as it assures your lender that you will not be defaulting on your repayments.
Here are the top five ways to improve the financial stability of your business:
Maintain a robust accounting
The benefit of having strong finances is that it enables you to understand where the cash is going and where it is coming from. With the technological advances, you have highly advance bookkeeping software solutions and applications. These technologies allow you to keep your books. Unlike the old days, you will have to subscribe to cloud-based bookkeeping services than hiring expensive accountants. The best part is that there are websites on the internet that can assist you to have a strong grip on your finances. They make highly efficient accountants available on an hourly basis.
Furthermore, when you have accurate bookkeeping in place, your chances of making repayments on your loan are high. This, in turn, can help you build your credit in the long run. So, to have enhanced financial stability, make sure not to ignore accounting and bookkeeping in your small business.
Keep track of your business expenses
The more you spend, the more cash goes out of the business. It means that you will not be able to meet your financial requirements in the future or seek SME financing. As a rule of thumb, you will need to ensure that you are not spending more than you are earning. A golden piece of advice would be to keep track of your expenses and make sure that you are spending within the limit. Ignoring to keep a close watch on your expenses can hurt your finances and your chances of even getting a small business loan, as your lender checks your spending habit before approving your loan application.
Prioritize automating your work
It is worth noting that the more manual work you will perform manually, the greater will be your business expenses. It is better to make the best use of the recent technology. For instance, you can automate tasks such as sending email campaigns, following up messages and responding to customer inquiries. Introducing new technologies in your business can significantly reduce operational costs, hence enabling you to save more.
It is another way to securing more funds and manage your finances when the need arises. Also, when you get enough funds from your business, your ability to make timely repayments of a small business loan increases.
Reduce the cost of travelling
Another thing that can jeopardize your financial position is the cost of unnecessary travelling. It can increase your business expenses more than you can make a profit out of it. So, it would be wise to allow your employees to travel when it is necessary. For instance, if you need to make presentations to your clients and customers, you can do that through video conferencing. Tools like Zoom or Google Meets can significantly bring down the travel costs by allowing your employees and your clients to come online and address issues.
Encourage your employees to develop a culture of financial stability
Ensuring financial stability in your business is not just your responsibility. Your employees hold equal burden, as the finances have a direct impact on all of you. It is crucial to encourage your staff to adopt habits, such as using the office resources efficiently. Encourage them to use less paper, stationary, and switching off devices when not in use.
So, if you are concerned about your business’s financial stability, you will need to adapt to the above-said changes. This way, you will not only refrain from losses but become financially secure enough to benefit from microfinance in India. Having stable finance enables you to secure loans in the future.