Guides · MSME
MSME loan basics
An MSME borrows for two broad reasons: to fund the day-to-day gap between paying suppliers and being paid, and to invest in growth. Knowing the common loan types and what a lender looks for makes the ask stronger.
The common types
Working-capital finance — an overdraft, a cash-credit line, or bill discounting — funds the day-to-day cash gap. A term loan funds a specific investment, like a machine or a premises, repaid over years.
Which fits depends on the need: a recurring cash gap wants a revolving line, while a one-off purchase wants a term loan sized to it.
What a lender looks for
A lender wants to see that the business can service the loan: steady receivables, payables under control, and a clear net position, alongside the usual registration and identity records.
Schemes like collateral-free guarantees can help a viable business that lacks security, but the underlying case still rests on the numbers holding up.
How Lekha fits
Lekha keeps receivables, payables, and net position current — the exact picture a lender asks a small business to show.
Lekha records what your documents say and tracks the money on both sides — what you owe and what you are owed. It records and tracks; it does not replace your accountant.
Questions
- What are the common types of MSME loan?
- Working-capital finance — overdraft, cash credit, or bill discounting — for the day-to-day cash gap, and term loans for specific investments repaid over years.
- What does a lender want to see from an MSME?
- That the business can service the loan: steady receivables, controlled payables, a clear net position, and the usual registration and identity records.
- Can an MSME borrow without collateral?
- Sometimes, through credit-guarantee schemes that back the loan to the lender. The underlying case still depends on the business's numbers holding up.