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02 Aug

5 Features That Make Unsecured Business Loans Favourable For Your Business

  • By Editorial Team
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Introduction

Your business might be in the initial stage right now, but you must have an ambitious dreams for developing it to its full potential? Every business owner knows that it takes excruciating efforts to expand the business even by a small extent. Many times business owners slow down on this path to progress due to the paucity of capital. This is where an unsecured business loan can be the perfect answer. And when you have the perfect financial cushion to make the progress possible, your dreams and ambitions can begin to come true.

What Are Unsecured Business Loans?

An unsecured loan is a sum of money disbursed towards your business account without keeping any asset as collateral. You can take the loan basis your credit score and income. Apart from enabling easy access to funds, unsecured business loan providers also offer customized solutions for different businesses and repayments are tied to the accounts receivables or inflows from credit card sales of a business.

Why an Unsecured Business Loan is Safe for Your Business

Still skeptical about expanding your business with the help of an unsecured business loan?

Well, there are a number of benefits that will convince you that every small scale business needs this financial boost to develop to its full potential.

  1. Guarantees Unrestricted Growth:

Financial roadblocks are common in a business. Just when the business is about to soar you might find yourself contemplating whether to invest in growth or use the profits to pay for inventory, wages, utility bills, and other expenditures. An unsecured business loan can ensure that such concerns do not hinder the growth of the business and that there is an adequate cashflow to invest in the growth plans.

  1. Collateral Free:

Small scale businesses generally do not have assets to keep as a collateral, thus you might think that this lack of assets can come in the way to availing a loan. But with unsecured business loan, just on the promise of your good credit score and income, you can get the requisite funds for your business.

  1. Less Risk:

Whenever you think of taking a loan, the word risk invariably comes to your mind. Well, an unsecured business loan does not involve much risk, as you do not need to keep an asset as collateral.

  1. Flexible and Customised Terms:

When it comes to eligibility, loan amount, repayment, unsecured business loans are kept flexible to benefit the business owner the most.

  • Eligibility:

When small businesses are unable to fulfil the eligibility criteria set by the traditional lenders for a business loan, you can approach lenders for unsecured business loans which come with a comparatively simpler set of eligibility criteria.

  • Loan amount:

The loan amount of a secured business loan depends on the value of the collateral. In most cases, the maximum loan amount can be 70% to 80% of the value of the collateral. But in case of unsecured business loan, the loan amount depends on the need of money. You can avail a loan for amounts ranging from INR 50,000 to 1 crore.

  • Repayment:

Loan repayments can tend to bring stress but with an unsecured business loan you can choose the loan tenure ranging from six months to three years. In accordance with the progress of the business, you can decide a repayment schedule which can be on a daily, weekly, fortnightly or monthly basis.  This flexibility empowers the business owner to work in a stress-free environment.

  1. Boost Credit Score:

As a borrower it is important for you to maintain a good credit score. With an unsecured business loan, as your business gets easy finances there is not a towering pressure to repay immediately, this helps build your credit score.

Conclusion

Now that you know how unsecured business loans can be favourable to your small business, approach the right lender and let your business soar and steer towards progress without any financial roadblocks!

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Did You Know

Statement of Account (SOA)

Statement of Account or SOA or bank statement is a record of all financial transactions that take place on an individual's or company's account with a bank or other financial institution. In the case of loans, it is a statement which records EMI payments, Pre/Part-payment amounts, penalty charges, etc. Such statements recored both inflow and outflow of money from a given account.

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