Demystifying cashflow-based lending for Indian MSMEs. How fintech algorithms evaluate GST and banking flows to disburse unsecured capital in 48 hours.
For decades, traditional bank lending required Indian business owners to pledge residential or commercial property as collateral to secure business expansion capital. Today, digital underwriting algorithms have revolutionized MSME financing.
Cashflow-Based vs Asset-Based Lending
Fintech lenders and new-age NBFCs evaluate your monthly banking inflows, GST return consistency, supplier invoices, and customer payment cycles rather than physical assets. This allows fast-growing businesses with minimal fixed assets to access up to ₹2 Crore in collateral-free debt.
Key Ratios Lenders Look For
Lenders examine Average Monthly Balance (ABB), inward-to-outward transaction frequency, and zero cheque bounce track records over the trailing 12 months.
Amitabh Sen
Financial Research & Advisory Specialist at Finfly India.