Here’s What Small Businesses Expect Before Applying for a Small Business Loan
In case you are thinking of applying for a small business loan, hold on and check the Union Budget 2017. There are huge expectations from the Budget for 2017 in terms of tax benefits and other incentives for small businesses and startups. Indian SMEs are eagerly awaiting some new growth measures and policies in the Budget. Since SMEs contribute hugely to the Indian economy along with generating huge employment, their needs deserve to be taken into account. SMEs contribute a lot towards scaling up industrial and manufacturing output as well. SMEs require a special investments plan of the Government with regard to creating supporting infrastructure including uninterrupted water and power supply, incentives for solar power usage, proper roads and so on.
The Central Government has been coming out with several schemes and regulations for easing out business problems faced by SMEs. There are more expectations from this year’s Budget as per leading industry experts. SMEs are looking forward to measures which will help them do away with anxieties related to applying for a Small Business Loan. There are expectations of greater support in terms of Business Loans and tax relief along with more flexible compliance regulations. SMEs or MSMEs are now faced with the challenge of thriving in an economy which is slowly going cashless. Business owners now have to rework their entire plans and models. Businessmen are eagerly awaiting the announcement of measures which will accelerate the flow of money once again. Here are the key areas where the Government can definitely come out with specific measures:
1. Loans & Funding- The Government can make applying for a small usiness loan a lot easier for SMEs. Working capital loans can be given by banks at lower interest rates since demonetization has led to increased liquidity. There is an expectation from the Budget 2017 to allocate specific loan percentages for small businesses.
2. Proper Infrastructure- Small businesses are expecting measures from the Government which contribute towards infrastructure development. There need to be good roads and suitable power and water supply in areas with manufacturing units, factories and offices. Solar power usage incentives could be a good bet for the Government.
3. Taxes- The entire tax structure is due for a revamp and the Government may announce specific reforms in this budget. The announcement of the Banking Transaction Tax (BTT) with GST will create a new economic system. This will spur higher online transactions along with widening the tax collection net indirectly. The current waiver of income tax till INR 2.5 lakhs can be raised and this will help SMEs along with lowered service tax. Reduced VAT will also be a major boon for small businesses. The Government may even decide to slash rates for online transactions to some extent. Even this will bring some relief for SMEs.
4. Investments & Benefits- There could be special tax benefits on Business Loan for sectors like technology, food, energy and transportation. There may also incentives for product and service quality along with strict adherence to standards. There may be investments plans unveiled for self sustainable business and research and development.
Small businesses are eagerly hoping for the Budget 2017 to make taxation and compliances simpler along with providing easier access to funding. Technology can eventually be used for all kinds of approvals, clearances and other formalities related to businesses. However, keeping these expectations at the forefront, execution is now the key. It remains to be seen whether the Government comes out with a bonanza of reforms for small businesses or keeps things more balanced.