This Man Took a ₹10 Lakh Loan & Became a Millionaire in 3 Years

In 2014, Tanveer Samad Kazi, an entrepreneur from Kolhapur, Maharashtra, faced a challenge. With an investment of ₹2 lakh, he had established Perfect Industries, a company specialising in automobile components. 

However, to meet increasing demand and scale his operations, he needed advanced machinery, an investment beyond his immediate financial reach. Traditional banks, with their lending criteria, turned him away. But Tanveer secured a ₹10 lakh collateral-free loan from Kinara Capital.

These funds enabled him to purchase the necessary equipment, leading to a remarkable transformation. Production capabilities were raised, his workforce expanded from 5 to 60 employees, and monthly sales increased from ₹4-5 lakh to ₹15-20 lakh. 

Tanveer's story proves how financial support can help small businesses reach new heights.

1. Identifying the Growth Opportunity

Every business, big or small, looks for ways to grow. Growth can mean increasing sales, reaching customers, or launching new products. The first step is to spot the right opportunities.

Read More – From ₹10,000 to ₹10 Crore: Stories of People

For example, if you run a small garment shop and notice increased demand for ethnic wear during festivals, that is a growth opportunity. By stocking more ethnic wear during those months, you can increase sales.

How do you identify growth opportunities?

• Market trends: Keep an eye on what’s popular. For instance, online shopping has seen a massive rise in India recently. Businesses that shifted online early are now ahead.

   

• Customer feedback: Listen to your customers. Providing this service could help grow your business if they often ask for home delivery.
  
  

• Competitor analysis: Study what others in your industry are doing. If your competitor offers easy payment options and gets more customers, you could follow the same.

Ramesh, a small bakery owner from Pune, noticed customers asking for sugar-free sweets. He started offering sugar-free options and saw a 40% increase in sales during Diwali. Ramesh unlocked a growth opportunity by paying attention to what his customers needed.

2. Facing Financial Constraints

Growth often requires money. But what happens when you don’t have enough funds? Many businesses, especially small ones, face this problem.

Common financial constraints:

• Limited savings: Most small businesses start with personal savings or small loans, which can run out quickly.
• Delayed payments: In India, many small businesses face late client payments, affecting their cash flow.
• High operational costs: Rent, salaries, and other overheads can eat up profits, leaving little for growth.

Suppose a small grocery store earns ₹2,00,000 per month.

• Monthly expenses: ₹1,50,000 (including rent, salaries, and electricity)
• Profit left: ₹50,000

If the owner wants to expand and open another branch, he might need ₹5,00,000 for rent and stock. Saving ₹50,000 every month means it would take 10 months just to gather the necessary funds—unless alternative financing options are explored.

Tip to handle constraints:

• Keep a strict budget.
• Cut unnecessary expenses.
• Negotiate better payment terms with suppliers.

3. Exploring Alternative Financing Options

Don't lose hope if you don't have enough money to grow. There are several financing options available today. Here’s a table that compares some standard financing methods:

Things to consider before choosing financing:

• Interest rates: Choose an option that offers affordable repayment terms.
• Repayment period: Short-term loans may have higher monthly payments.
• Collateral: Some loans may require you to pledge assets.

4. Securing a Collateral-Free Loan

Many small business owners hesitate to apply for loans because they fear losing their assets if they can’t repay them. This fear is understandable. But the good news is that there are collateral-free loans available. These loans don’t require you to pledge any personal or business assets.

It’s a loan where you don’t have to provide security (like property or equipment) to get funds. Lenders give you the loan based on your business performance, credit score, and repayment capacity.

Popular collateral-free loan schemes in India

Here’s a table showing some schemes available for small businesses:

Suppose Ravi runs a small textile shop and needs ₹5 lakh to expand his business. He applies for a MUDRA loan and gets the full amount without pledging any property. 

The interest rate is 10% annually, and he repays the loan in three years. Without risking his assets, Ravi grows his shop into a small showroom.

Benefits of collateral-free loans

• No need to mortgage personal or business assets
• Quick approval for eligible businesses
• Flexible repayment terms

5. Investing in Advanced Machinery

Once funding is secured, investing in advanced machinery can boost productivity and reduce costs. Modern machines are faster, more reliable, and can handle larger workloads. For small manufacturers, this investment can change the game.

Why invest in advanced machinery?

• Higher efficiency: Machines speed up production and reduce manual effort.
• Lower operational costs: Advanced machines use less energy and require fewer repairs.
• Better quality: Machines produce more consistent and high-quality products.

Suppose a small factory produces 500 garments per day using old sewing machines. With modern machines:

• Output increases to 800 garments per day
• Power consumption drops by 20%
• Labour costs reduce by ₹10,000 per month

Tips before investing in machinery:

• Check if the machine offers long-term savings
• Ensure spare parts are readily available
• Look for warranty and maintenance services

6. Increasing Production Capabilities

When businesses grow, they need to increase production to meet demand. Enhancing production means making your processes faster, smoother, and more efficient.

• Hire skilled staff: Trained employees can handle advanced machinery better.
• Upgrade technology: Use software for better inventory and order management.
• Streamline processes: Remove unnecessary steps to speed up production.

A sweets factory producing 1,000 kg of sweets daily introduces better packaging machines. This boosts production to 1,500 kg daily and reduces wastage by 15%.

Investment vs. Returns Table

Simple tips to enhance production:

• Track output daily to find bottlenecks
• Maintain machines regularly to prevent breakdowns
• Keep enough raw materials in stock to avoid delays

7. Expanding the Workforce

You need more people to handle the extra work when your business grows. This is called expanding the workforce. Hiring the right people at the right time can help increase productivity, reduce stress on your current team, and improve customer service.

Why should you expand your workforce?

• To meet growing customer demand
• To bring in new skills and ideas
• To reduce the workload on existing staff

Imagine Ramesh runs a small café. Initially, he manages everything with two employees. As customer numbers grow, wait times increase, and service slows down. By hiring two more workers:

Also Read - Smart Ways to Invest Money After Taking a Personal Loan

• Service time reduces by 40%
• Daily sales increase from ₹5,000 to ₹8,000
• Customer satisfaction improves, leading to repeat business

How to expand the workforce smartly:

• Hire for specific roles (e.g., cashier, marketing, or customer support)
• Offer proper training to new employees
• Create flexible shifts to cover busy hours

Example:

Priya owned a small gift shop in Delhi. She started alone but couldn’t manage increased festival demand. She hired two sales assistants before Diwali. Sales doubled in a month, and her customers appreciated the faster service.

8. Achieving Sales Growth

Every business owner dreams of increasing sales. But how can you grow your sales without making huge investments? The answer lies in innovative strategies and understanding customer needs.

Simple strategies for sales growth:

• Offer discounts: Run special promotions during festivals or weekends.
• Upsell and cross-sell: If a customer buys a mobile phone, offer a discount on accessories.
• Improve product quality: Better quality always brings back customers.

Numerical Example:

Let’s say you own a grocery store that earns ₹1,00,000 per month. You introduce a home delivery service and offer a 10% discount on bulk orders. Within three months:

• Monthly sales rise to ₹1,50,000
• You gain 50 new regular customers
• Profits increase by 20% despite the discount

Sales Growth Strategies Table

Arvind ran a small electronics shop in Chennai. He started offering combo deals—buying a TV with a free set of speakers. Sales jumped by 30% in two months, and his shop became popular among local customers.

Quick tips to boost sales:

• Offer loyalty programs for repeat customers
• Use social media to promote your business
• Ask satisfied customers for referrals

9. Overcoming Traditional Banking Barriers

Many small businesses in India struggle with traditional banking barriers. Banks often ask for lots of paperwork, demand loan collateral, or take too long to approve applications. This can stop small business owners from getting the funds they need to grow.

Common barriers faced:

• Lengthy loan approval processes
• High-interest rates on loans
• Requirement of collateral (property or assets)
• Complex documentation

Ajay wanted a ₹5 lakh loan to expand his dairy business. The bank rejected his application because he couldn’t provide property as collateral. Instead, he applied for a MUDRA loan and received ₹3 lakh in just two weeks, helping him increase his milk production capacity by 30%.

How to overcome these barriers:

• Choose NBFCs (Non-Banking Financial Companies): They often offer faster loans without collateral.
• Use government schemes: Schemes like MUDRA or Stand-Up India provide easy loans for small businesses.
• Improve your credit score: Pay your bills quickly and keep your debt low.

Quick solutions to bypass banking barriers:

• Apply for collateral-free loans
• Use digital lending platforms for quicker approval
• Keep proper financial records to increase loan eligibility

Conclusion 

Every business faces financial constraints at some point. The key is not to stop trying. Start by identifying areas where your business can grow. Even with limited funds, you can find ways to expand by choosing innovative financing options.

Whether it’s a bank loan, a government scheme, or investor funding, the right decision can help your business progress.

Success stories like Ramesh’s and Sunita’s show that with the right strategy and funding, any business can turn challenges into opportunities for growth.

Apply for Loans Fast and Hassle-Free

Apply Now

About the Author

LoansJagat Team

We are a team of writers, editors, and proofreaders with 15+ years of experience in the finance field. We are your personal finance gurus! But, we will explain everything in simplified language. Our aim is to make personal and business finance easier for you. While we help you upgrade your financial knowledge, why don't you read some of our blogs?