5 Myths About Unsecured Business Loans Debunked

With so much of information available these days, it is hard to know what to believe and what to avoid. Similarly, there are some misconceptions about unsecured business loans. We don’t know about the others but we can surely clear the misconceptions about these types of loans. But first let us understand what unsecured business loans are.

What is Unsecured Business Loans?
This loan is intended to offer funds without pledging any personal or business collateral.

To avoid these misconceptions looming over structured funding solutions let’s debunk some of the myths:
 
1. It is meant only for small businesses
It is a common belief that you can only get an unsecured business loan if you own a small business. This means that bigger businesses would have to wait for a long time to get approvals. This is not the case anymore. There are many digital lending platforms that provide business loans without security in no time. For example, Hero FinCorp’s loans range from ₹5 lakhs to 25 lakhs and have a flexible tenure of up to 3 years. A lender considers the financial history of an organization before giving it the funds it seeks.

                Also Read: Is my Business Eligible for an Unsecured Business Loan

2. Smaller amounts reduce the chances of getting a loan
As long as your business has a decent track record, you do not have to worry about the amount you apply for. It does not matter whether it is big or small, what matters is how much you need for your business. It is a misconception that you should always apply for a huge amount to increase your chances of getting a business loan without collateral.
 
3. Only banks provide unsecured business loans
The financial market has evolved over the years. The emergence of various financial institutions has made it an exciting time for business enthusiasts. Business owners do not have to rely only on traditional institutions for funding anymore. There are many lending institutions in the market that provide unsecured business loans at competitive interest rates. Many lenders also provide services that involve minimal documentation and trouble-free disbursals.

However, when you choose a lender, be sure to opt for one that is backed by a trusted name and has been in the market for a long time.

                Also Read: How To Protect Yourself Against Business Loan Scams