Razorpay introduces Cash Advance to help MSMEs cope up with COVID-19

By Edil Corneille

Bangalore-based Razorpay has introduced Cash Advance where the withdrawal of cash can be done instantly whenever required. COVID-19 has put pressure on small businesses by increasing their cash crunch. What businesses need is quick access to money without any fresh application every time they require cash, as mentioned by Razorpay.

With Razorpay Cash Advance, interest has to be paid only when cash is withdrawn. The facility can be applied by submission of a form within 30 seconds.

This is fundamentally like a line of credit or overdraft solution for businesses that have partnered with Razorpay. These businesses get access to funds from NBFCs through Razorpay in addition to the payments that they receive through Razorpay. Businesses can withdraw money anytime and the money will reach their bank account within a few seconds (less than 10 seconds in 99 percent of the cases, as reported by Razorpay).

The money will be repaid by the businesses from future payments on Razorpay Payment Gateway. This enables businesses to virtually get payments in advance. Furthermore, the money that they withdraw can be used for ATM withdrawals or any debit card/ net banking payments.

After working capital loans, Razorpay wanted to increase accessibility for small and medium businesses to other forms of loans also. Cash Advance will provide a line of credit to MSMEs that suffer unplanned cash requirements quite often.

The application will be approved within 3 days so that money can be borrowed instantly in the future at a nominal fee. Once Cash Advance is enabled for a business based on its past customer transactions, the money can be withdrawn, repaid and borrowed again from the approved credit limit.