Small and medium enterprises need funds for expansion to support their growth and keep the cash flow running. But if there isn’t collateral to pledge, it is very tough for any business to secure a business loan. Businesses need funds at lower interest rates so that the interests don’t eat up their profits. Traditional lenders do not lend to a small business as they view it in the riskier category. Additionally, small businesses require smaller amounts of loans that are not considered profitable by lending agencies.
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Getting an unsecured business loan for your small or medium enterprise is the best decision you have made. Here’s why:
Reasons why to Take Unsecured Business Loans
The NBFCs and banks provide a lot of business loans at competitive yet affordable business loan interest rates. Additionally, you provide tailor-made solutions with preapproved offers for your capital requirements. Additionally, the prepayment options in business loans are much flexible and more accessible. You get complete control over how you want to repay your debt.
It Does Not Require Collateral
Business loans are unsecured. Thereby, they do not require any collateral against the loan. Many startups require funds but do not have any material assets for collateral. Availing business loans is the best option to take credit and run their business ventures successfully.
Lesser Documentation Process
Unsecured business loans require a very minimal amount of paperwork. Most lenders ask their borrowers to submit their minimal documentation like copies of ID proofs, address proofs, SPDC, and a cancelled cheque as documents to take the credit. Additionally, you may have to submit proof of your business existence and bank account statements to check the credibility of your enterprise.
Quicker Loan Disbursal
Digital application of business loans makes it easier for lenders to process and disburse the loans as soon as possible. If you meet the eligibility criteria laid down by your lender, then the process is much swifter, and your loan is sanctioned within a day or two. Funds are swiftly credited within 24 hours if you meet eligibility criteria and all your documents intact.
Shorter Loan Tenure
Many lenders provide unsecured business loans as a short-term one with tenure between 1 to 5 years. Shorter loan tenure helps business owners to match their cash flow and repayment schedule. Most lenders do not charge foreclosure charges. Hence you can repay the loan amount without burning a hole in your pocket.
No Need to Worry About Credit Score
You can still get a business loan with a bad credit score. At the same time, most lenders look for high credit history. Unsecured business loans do not have these criteria. They are more focused on the profitability of your business than your credit history, so even if you have a poor credit score, you can turn the tables by paying the business loan on time and sending the scores soaring upward. Additionally, this will reduce your interest rates while securing other loans in the future.
No Shared Ownership
You don’t have to depend on venture capitalists or angel investors to secure funds for your business. Additionally, both require a solid business plan not to be rejected. You do not have to worry about sharing your company profits or shares with your investors to get a business loan. You can choose to repay your business loan with the profits and be the sole owner of your business.
Lenders provide unsecured business loans of up to 50 lakhs, not just the capital requirements but also short term and working capital needs like purchasing inventory or office expansion, bringing in more staff or any expenses related to business growth.
Check your business loan eligibility using a Business Loan Eligibility Calculator to understand the preliminary estimate of the sum you are eligible to borrow.
Lenders, understand the challenges faced by small business owners in India. Hence, we have customized our business loans at the lowest interest rates and more straightforward terms. We process your business loans quickly with flexible repayment options. Please take a look at our offers and get in touch with us to know your plans. We will help you choose the perfect business loan for your business. Apply now!