Small business owners use LAMF for GST payments, supplier advances, or bulk inventory purchases during seasonal demand spikes. Since interest is charged only on the utilized amount, it suits revolving working capital needs. RBI guidelines in 2026 permit borrowing up to ₹1 crore per individual against eligible mutual fund units. This provides a flexible alternative to traditional business credit lines without pledging additional physical collateral.

Credit card interest rates in 2026 often exceed 40% annually, making revolving balances extremely expensive. Using LAMF at 10–11% to clear outstanding dues significantly reduces interest burden. This converts unsecured, high-cost debt into structured secured borrowing backed by mutual fund units. Lower interest outflow improves monthly cash flow and reduces financial stress. Additionally, reduced credit utilization can improve credit scores over time.