This blog will examine some successful MSME loan applications, and the outcomes. These examples will assist small business owners in understanding what lenders look for when they approve loan applications and how to increase their chances of success.
Vastralatha Handlooms: Case Study 1
Vastralatha Handlooms, a small business located in Andhra Pradesh, manufactures handlooms. Due to lack of working capital, the owners applied for an MSME loan. The lenders were impressed by the detailed business plan and financial projections prepared by the owners. This showed that the business was viable, and could grow.
The loan was approved by the Andhra Pradesh State Financial Corporation, and the owners were granted a loan amounting to Rs. 5 lakh. The loan enabled the owners to buy raw materials, increase production, and hire additional staff. The business doubled its revenues in six months and was now profitable.
End result: Vastralatha Handlooms was able to increase its production, revenue and grow the business to become profitable.
Case Study 2: Surya Food Products
Surya Food Products, a small company in Maharashtra, produces and distributes food products like pickles and spices. After being in operation for several years, the business had a solid reputation on the market. To expand and grow their business, the owners applied for an MSME loan.
The owners applied for a loan at a private bank, and were approved for Rs. 10 lakh. The loan enabled the owners to buy new machinery, increase production, and hire more staff. The business saw a 50% increase in its revenue and expanded its distribution network within a year.
Results: Surya Food Products was able to expand its operations and increase production. The business was also able to grow and increase revenue.
Case Study 3: Saathi Eco Innovations
Saathi Eco Innovations, a small Gujarat business that makes biodegradable sanitary pad is located in Gujarat. This innovative product had won several awards since the business was first established in 2008. To increase production and expand their distribution networks, the owners applied for an MSME loan.
The owners applied for a loan at a bank to finance their home and were approved for Rs. 20 lakh. The loan enabled the owners to buy new machinery, increase production, and hire more staff. The business was able to expand its distribution network into several Indian states and establish a presence on several international markets within two years.
Results: Saathi Eco Innovations was able expand its business and increase its production. The business was also able to grow internationally and establish itself as a leader in the market.
These case studies show that MSME loans are only possible if there is a solid business plan and financial projections. The best way to present your business to lenders is for small business owners to prepare thoroughly. This will increase their chances of success as well as grow their business.