Microfinance
What is the biggest challenge faced by small businesses seeking funding?
Access to capital remains one of the biggest pain points for small businesses. Even after establishing their business, owners struggle to secure funding for growth, inventory expansion, repairs, or investing in staff. Traditional lenders assess creditworthiness based on factors like collateral, credit scores, and credit history, which often results in loan denials or insufficient funding amounts, particularly for underserved communities. Square Capital addresses this challenge by leveraging transaction data and machine learning models to evaluate businesses based on their actual sales performance rather than traditional credit metrics. This approach enables them to serve businesses that conventional lenders overlook, providing small loans (averaging $6,000) with transparency, speed, and simplicity.
Watch clip answer (03:52m)
NCRC
09:45 - 13:37
What are the new loan guarantee limits for MSMEs and startups in India's 2025 Union Budget?
The 2025 Union Budget has significantly increased loan guarantee limits for both MSMEs and startups in India. MSMEs can now access loan guarantees of up to 10 crore rupees, doubled from the previous 5 crore limit. Similarly, startups can now receive guarantees up to 20 crore rupees, up from the previous 10 crore limit. These government-backed guarantees make banks more willing to lend to these sectors, as the government covers potential losses. This initiative is expected to unlock an additional 1.5 trillion rupees in credit over the next five years, benefiting India's 4.5 crore MSMEs.
Watch clip answer (01:02m)
Think School
17:13 - 18:15
How does Square Capital determine and structure loans for small businesses?
Square Capital uses real-time sales data from their point-of-sale system to determine appropriate loan amounts for small businesses. By analyzing transaction patterns, they calculate a business's projected annual revenue and typically offer loans worth about 8-10 months of that revenue. The repayment structure is uniquely flexible—businesses pay back a small percentage of each daily transaction, allowing payments to fluctuate with business performance. This means if a business has a slow day or closes temporarily (due to vacation or disasters), they only pay when they're earning. This approach creates an opportunity for small businesses with volatile day-to-day operations to access capital without the stress of fixed payment schedules.
Watch clip answer (02:23m)
NCRC
30:24 - 32:47