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SME Resources—What Are They? How Are They Helpful?

By Mayashree Acharya

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Updated on: Feb 6th, 2025

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1 min read

Budget 2025 Updates:

  • Revision of classification of MSMEs to include more businesses and companies under the purview of MSMEs.
  • Micro-enterprises on the Udyam portal will get credit cards with a Rs. 5 lakh limit; 10 lakh cards will be issued in the first year.
  • A new Rs. 10,000 crore Fund of Funds will be launched with an expanded scope.
  • A scheme for 5 lakh women and SC/ST first-time entrepreneurs will offer term loans up to ₹2 crore over five years, along with online capacity building.

Raising capital is crucial for SMEs, but securing funds can be challenging. While banks offer SME loans, approval depends on strict eligibility criteria and the bank’s discretion. Government schemes exist, but their approval process is lengthy and uncertain.

For urgent funding needs or when documentation is insufficient, alternative funding options beyond bank loans and government schemes are available. We classify these as ‘SME Resources.’

Wondering what these ways are? Here is a list of SME resources that you can rely on:

1. Merchant Cash Advance (MCA): Small businesses facing cash flow issues can opt for MCA, where they receive an advance against receivables. Repayment happens through daily credit/debit card settlements in small EMIs.

2. Invoice Financing: Businesses can secure short-term loans using unpaid invoices as collateral, ensuring liquidity to complete deals while waiting for customer payments.

3. Accounts Receivable Financing (ARF): Similar to invoice financing but on a larger scale, ARF allows businesses to get funding based on outstanding billed invoices, either as a loan or asset sale.

4. Business Credit Score: Credit rating agencies assess SMEs based on financial health, helping lenders evaluate risk. A good score improves loan approval chances from financial institutions.

5. Business Credit Card: SME owners can use business credit cards for instant credit on expenses, track transactions, and reduce cash handling risks, provided they manage usage responsibly.

Explore these funding methods carefully before choosing the right one for your business.

About the Author
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Mayashree Acharya

Senior Content Writer
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I am an advocate by profession and have a keen interest in writing. I write articles in various categories, from legal, business, personal finance, and investments to government schemes. I put words in a simplified manner and write easy-to-understand articles. Read more

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