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Reserve Bank of India (RBI) recently extended the scheme of EMI Moratorium for another 3 months, i.e. till August 31st. Even though initially, this was a good solution to combat the economic crisis business owners were facing, taking a moratorium now can be nothing less than a big economic liability.
The government thus offered emergency working capital loans to MSMEs to overcome this scenario. To understand what exactly is an emergency working capital loan, its eligibility criteria and other aspects, refer to the following link : https://help.wheelseye.com/en/posts/6359/
Consider the following terms and conditions of a loan:
Also, we are assuming the moratorium was taken for a 3-month period, i.e, July, Aug, Sept.
CASE 1: EMI Moratorium
CASE 2: Emergency Working Capital Loan
Interest paid on moratorium is thus 3 times more than emergency working capital loans.
In this scenario, we can have savings of 70%. But, for different scenarios, the results can differ. But, in general an emergency loan can help you save upto 90% on your moratorium interest.