The lockdown that has been enforced to contain the spread of coronavirus has hurt trade, hampered supply, depleted workforce, and halted production. Businesses are struggling with challenges like restricted liquidity and a shortage of cash. 

The SME and MSME sectors generally operate on tight budgets and are, therefore, severely affected. If you own one such small enterprise reeling under this crisis, you must come up with a sound post-lockdown plan. It will enable you to revive your business and recoup when conditions turn stable. Here are a few suggestions to help you strategize:

Assess your financial situation

  1. Update your sales, cash flow, and profit and loss statements to discover how much your business has been affected by the lockdown.
  2. Evaluate all expenses to decide what can be eliminated or, at least, postponed.  
  3. Try to renegotiate contracts and request for extensions on payment due dates.
  4. The Reserve Bank of India has announced a moratorium on term loans (1), including SME term loan and deferred interest payments on working capital services. Try to take advantage of these government relief measures.

Additional Reads: 3 Lakh Crore COVID Relief Package for MSMEs: How will this benefit the MSMEs and Start-ups?

Invest in building a digital set-up

The lockdown has highlighted the power of the internet. Even the government is providing e-market linkages since participation in trade fairs is not possible at present. Consider applying for an SME loan to build a digital presence and reap a wide range of returns:

  1. Leverage the higher time people are spending online confined at home. Place relevant ads on popular websites and social media to facilitate brand recall and keep your customers from moving to your competitors.
  2. Understand the changed consumer behavior that is shifting towards online shopping to avoid the risk of infection and consider retailing on the web.
  3. Reduce overhead costs and maintain social distancing by encouraging your employees to work remotely through a digital system.

Outline a new business plan

Business Plan Outline

Identify the current uncertainties in your industry and make appropriate modifications to your operating model to address the probable impacts. Focus on finding new business prospects to bypass the negative upshots. To finance these new ventures, you can try to raise your MSME or SME working capital by enlisting on stock exchanges. It will help you avail of the benefits of the “Fund of Funds” approved by the government, which has assured up to 15% of equity support for MSMEs (2).

​Restructure your budget

When the lockdown is lifted, you might find new avenues that require funds, including hiring new workers, purchasing inventories, boosting promotions, etc. With the government declaring credit guarantees (3) for MSMEs loans, you can utilize this opportunity and apply for an SME business loan to fund your new budget plan.

Consider applying for credit

The Finance Minister (4) has declared an emergency credit line for MSMEs with collateral-free loans as well as debt schemes for “stressed” MSMEs. This is the ideal time to re-build your working capital and reduce higher-interest debts through an MSME loan.


To help your business recover, you have to plan for long-term growth, even if it requires additional expenses. An SME business loan will equip you with the resources to meet evolving consumer demands. Tata Capital offers MSME and SME loans without collaterals. Apply for one and get ready to unlock new opportunities that are sure to open up once the crisis is behind us.

Additional Reads: Steps to apply for collateral-free MSME loans under the COVID-19 Relief package

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