SMEs worldwide were severely impacted by the COVID-19 outbreak. Many small and micro business units were forced to shut down while others suffered to keep the operations lean. And for most SMEs, working capital shortages became major roadblocks to recovery.
Consider this: an ILO SCORE Programme survey concluded that nearly nine out of ten SMEs were facing a shortage of adequate cash flow. Thus, in the New Year, easy access to finance will be vital for SMEs to revive the momentum.
Below, we discuss some useful growth tips to ensure your SME enterprise remains financially abreast in 2021.
Government COVID-19 relief initiatives
First on our list of growth tips for SMEs in 2021are the various COVID-19 relief initiatives announced by the government under the Atmanirbhar Bharat Package.
One of the most significant relief initiatives in the package was extending the Emergency Credit Line Guarantee Scheme (ECLGS) up to March 31, 2021.
Under the scheme, banks and NBFCs received 100% guarantee coverage from the Indian government, enabling them to extend up to Rs. 3 lakh crores of emergency credit facilities to eligible borrowers.
As such, any eligible company from the SME sector can secure automatic loans, fully guaranteed and collateral-free, at low business loan interest ratesfrom any bank/NBFC.
Additional Read: Top Reasons to Avail an SME Loan from NBFC
Fast-track digital adoption
During the pandemic, there has been a significant shift in consumer behaviour. Customers have now become more technology-driven, preferring digital transactions over cash purchases. And expect businesses to follow suit.
Thus, SMEs should digitalise business operations and meet the new consumer demands every step of the way – from automating manual business processes to building a robust online presence. This move will help them stay relevant in the market and build resilience for the future.
Hence, of the small business trends in 2021,digital adoption will inevitably take precedence. However, their end goal should be to make technology an integral part of their day-to-day operations.
Tap into new industry verticals
If anything, the coronavirus outbreak emphasised the need for developing new products and tapping into new industry verticals for long-term business sustainability. Besides, many small business units have already created new business verticals such as disinfection services, COVID-19 screeners, face masks manufacturing, etc. This way, they have made substantial profits by catering to different post-pandemic demands.
But in any case, adequate funding will be essential to support the new products/services and boost productivity. And, an SME term loan from a reputed lender can surely help you secure the necessary funds and tap into new industry verticals seamlessly.
Additional Read: What Would Be the Role of SMEs in Changing India’s Economic Development In 2021?
The bottom line
No matter how steep the curve is for your business, adequate funding will continue to be of utmost importance in 2021. At Tata Capital, you can procure a quick and easy business loan to optimise your cash flow swiftly. Access funds up to Rs. 75 lakhs at incredibly competitive interest rates and a comfortable tenure.
Besides, if you want a projection of your EMI commitments, our easy-to-use, online business loan EMI calculator will be a handy tool. Get in touch to know more.