Small business loans help small businesses to grow their business, manage day to day expenses and get ready for future business. While it was difficult for small businesses to get access to business loans with the traditional lenders demanding collateral, multiple documentations and a long processing time, things have changed for better with the digital lenders offering quick and simple small business loans without any collateral.

The effective usage of business loan creates a successful business, one that stands the test of time and earns increased revenue with the time. Here’s a detailed road map for specific businesses on how small businesses should use the business loans effectively.

Retail Shops

Retail shops that sell goods directly to consumers from their stores should use the business loans to order goods in bulk from the manufacturers and distributors, this enables them to get extra discounts and then eventually earn better margins by selling to end consumers. Other use cases for retail businesses is to invest in modernizing their stores which pays in the long term by attracting better customers and retaining the existing ones.


Small Restaurants need small business loans to run their business smoothly. They need business loan to cover the working capital expenses during the lean days as they need to run the show and offer consistent value to the limited customers that come to them even in lean periods. Small restaurants also need business loan to setup cloud kitchens or the delivery kitchens, this enables them to stay competitive and offer great deals on the food delivery platforms while keeping costs in check. The growing restaurants also need the business loans to increase their awareness, invest in marketing and to revamp the menu or invest in equipments which will help them to build a great brand for themselves.


Travel Agents

Travel Agents depend on corporate clients for their business, as it is the corporate who give consistent business and in bulk quantities. However, every corporate has their own credit period and often it is more than 30 days. Whereas, the travel agents although have to pay in real time or within 7 days to the hotels, airlines or the travel booking aggregators, this creates a huge working capital gap for which the travel agents need small business loans to serve more clients, rotate money and earn more revenue eventually.


Small Hotels depend on the regular inflow of guests to get revenue and meet their expenses. However, it is during the lean periods that a hotel needs to depend on a business loan to cover their regular expenses, as they still need to offer the same level of service to the guests who are coming to them. Hotels also need small business loans to add facilities like setting up a conference room for the corporate clients or adding a bar or restaurant to their hotel that will add up to more revenue in future. Another area for hotels to invest using the business loan is to promote themselves on the hotel booking platforms and building sound customer feedback platforms to get great reviews, which are now a benchmark for customers to check while booking a hotel.

E-Commerce Sellers

E-Commerce Sellers have a unique business model as they mostly depend on volumes for their revenues in this competitive e-commerce world. Also, the first ones to bring the new buzzing products get to command a high premium while others catch up, and for this they need to order from the manufacturers located probably in Taiwan or China. Thus, they need funds to order goods in bulk from select vendors so they could earn that extra margin and bring in new products that could set the e-commerce platforms on a new buzz and fire. To achieve this, they need small business loans to overcome this gap in funds.   

While, these are some use cases to suggest how the small businesses should use their business loan. Every business has their own unique requirements for which they need a business loan. Also, the small businesses need these loans quick and easy and which is where the digital lenders like Indifi are helping them by offering easy business loans that are based on their business transactions and do not depend on collaterals like in the case of the traditional lenders. Indifi offers small business loans upto INR 50 Lacs for small businesses within 24 hours.   

Published by Mohsin Ahsan