Starting a business is not something easy, especially for MSME business actors where they are just starting out. One of the biggest challenges is allocating the available capital to get started. This is where the role of loans for business capital is present. So how do you get a loan for MSME business capital ? let’s review carefully below.
Capital loans for MSME businesses are a type of fee funding that offers capital to small MSME businesses when they want to start or develop their business. Capital loans for this business are usually offered by venture capitalists when they want to join the business that you manage. By taking a share of the business profits in return.
Benefits of MSME Business Capital Assistance
There are four advantages of MSME business capital loans. This business capital assistance can provide benefits for small and medium businesses so they can develop. Here are the four main benefits :
Capital Access
Because this is related to business capital assistance, the main benefit of this loan for MSME business capital is access to capital. These loans can provide SMEs with the funds they need to grow their business, launch new products or services, or expand into new markets.
Strategic Guidance
Apart from funding, business investors such as Creasi UMi can also provide guidance and strategic support to MSMEs. This can include advice on business strategy, marketing and operations, as well as access to industry contacts and networks. This support is invaluable for SMEs who want to develop and grow their business.
Validation
Securing venture capital financing can also provide a level of validation to MSMEs. By attracting financiers who believe in the business model and growth potential, SMEs can gain credibility and establish themselves as serious players in their industry. This can help attract customers, employees and develop market networks in the future.
Reducing Financial Risk
MSME business capital loans can also help reduce financial risks for businesses, this way of working is the same as home ownership loans. Because these loans are usually provided as equity financing. In addition, if the business does not run as expected, venture capitalists will share financial losses, this certainly reduces the risk for MSMEs.
Types of Loans for MSME Business Capital
There are several types of venture capital assistance for MSMEs currently available, including :
- Seed Capital : This type of loan is designed for businesses that are just starting out and need funds to develop plans and prototypes of the customer’s business.
- StartUp Capital : This is a type of loan that is given to MSMEs who are ready to start their business but need funds to start.
- Expansion Capital : This type of loan is given to MSMEs that are already operating but need funds to expand their business.
- Mezzanine Capital : This is a type of mixed loan between debt and equity financing, and is usually given to MSMEs that are in the next stage of development or upgrading.
Terms and Criteria
Although capital loans can provide the funds needed by small and medium enterprises to develop and grow their business. However, not all businesses qualify for this type of financing. To get MSME business capital loan assistance, your business needs to meet the eligibility criteria:
Growth Potential
One of the main factors considered by venture capitalists when evaluating loans for MSME venture capital is the potential for business growth. Venture capitalists usually look for businesses that have the potential to grow and become market leaders in their industries. To demonstrate growth potential, you must have a clear business plan that outlines your goals and strategies for achieving them.
Healthy Management
In addition to growth potential, venture capitalists are also looking for businesses with a healthy management team. The management team must have experience and expertise in the industry and be able to demonstrate their ability to execute the business plan. MSMEs must ensure that their management team is complete and has the skills needed to manage the business.
Competitive advantage
An important factor considered by venture capitalists is the competitive advantage of the business. This can include unique product or service offerings, a strong brand or reputation, or proprietary technology or intellectual property. SMEs must be able to clearly articulate what differentiates them from their competitors and how they plan to maintain this competitive advantage.
Have a Business Plan
Finally, venture capitalists look for MSMEs that have a clear path to profitability. This means that a business have a business plan to generate revenue and become financially independent. SMEs must be able to demonstrate that they have a viable business model and that their financial projections are realistic and achievable.
How to Get Loans for MSME Business Capital
The process for applying for business capital loans for MSMEs varies depending on the lender. However, in general, the process involves submitting a business plan and financial reports, as well as meeting with potential financiers to discuss the business and its growth potential.
Here are some ways to get business capital assistance from Creasi UMi for MSMEs :
Fulfill Requirements
First, MSMEs must understand the rules and also fulfill the conditions set to be able to apply for a UMi business capital loan. Prepare all existing documents, starting from ID card, business license, tax number, MSME financial reports and the required supporting files.
Submission of Business Capital
After MSMEs meet the existing requirements, then you can apply for venture capital assistance online or come to the office in person.
Wait for the Validation Process
After you apply for a business capital loan at the UMi campus, then wait until the validation process is complete. This usually takes 7 working days. To speed up the process, you can visit the nearest UMi office from your domicile.
Alternative Capital Loans for MSMEs
Loans for MSME business capital from UMi institutions can be a great way to get business capital funding. However, there are also alternative financing options available besides venture capital assistance from ultra micro creations (UMi), the following include :
- People’s Business Credit : These are business capital loans provided by financial institutions that can be used to fund business expenses.
- Crowdfunding : It is a type of financing in which a large group of people contributes a small amount of money to fund a business or project.
- Angel Privator : These are individual financiers who provide funds to MSMEs in exchange for a share of the profits.
- Shopee Paylater Loans : Shopee PayLater works like a virtual card. After you are approved to use this service, you will be given an initial Shopee PayLater loan limit that you can use to make purchases at Shopee.
It is important to carefully consider the risks and benefits of this loan before applying. As a small business person who has a clear and well-defined business plan, demonstrates growth potential, and has a healthy management team. You can apply for a loan for MSME business capital, to develop the business that you have.
