FUEL YOUR BUSINESS GROWTH WITH UNSECURED BUSINESS LOANS

Introduction

Every business wants to grow fast, but that heavily depends on funds availability besides other factors. When businesses need funds, they usually turn to the various loan products available in the market. However, loan-related decisions may not be that easy to make. While personal loans charge heavy interest rates, secured loans demand collateral to reduce the lender’s risk factor. Any business owner who is just starting with most of the cash reserve gone in establishing the firm or who is already struggling to break even can hardly gather the courage to put a valuable asset on the line. But, why do that when there is an easier way out called unsecured business loans?

Unsecured business loans do not require any collateral and help businesses resolve their immediate capital requirements such as purchasing equipment, paying staff, asset maintenance, expansion etc. 
 

What are unsecured loans?

It is a type of loan that requires no collateral. The word ‘unsecured’ here is simply used to denote how it is a risky affair for the lender to lend capital without keeping any asset of the borrower to recover money in case of a default. An unsecured loan is issued based on a borrower’s creditworthiness and business potential to generate revenue in months to come.  

 Also Read: 5 Features That Make Unsecured Business Loans Favourable for Your Business

How unsecured loans can fuel your business growth?

 

1. Meet short-term fund requirements

A major reason why these loans are a hit among business owners is that they help them take care of their urgent capital needs. Also, unlike traditional loans, they give the freedom to the borrower to use the funds as per their preferences. The loan approval process is both easy and quick.  You can use it to purchase equipment, pay or hire staff, for renovation and maintenance, or even for the expansion and launch of new products.
 

2. Improve your credit score and eligibility

You are eligible for unsecured loans even if you have a not-so-good credit score as lenders judge the business’ profitability, business transaction trail and other financial aspects. But the icing on the cake is that these loans help you improve your credit score and eligibility. If you repay all instalments on time, the improved credit history will make you eligible for a bigger amount next time with lowered interest rates.  
 

3. Maintain positive cash flow for your business

In business, payments from customers often get delayed and that’s no reason to pick a quarrel with a valued customer or put all operations on halt till cheques are cleared. Unsecured business loans give the financial cover in these phases. They make sure the continuity of the production gives the owner the comfort of paying off the loan when payments come through. They also act as a cash buffer for all kinds of operational expenses and thus, help maintain positive cash flow.
 

4. Flexible terms of payment

These loans are extremely business-friendly and are the reason why so many enterprises are running successfully, generating both revenue and employment opportunities. What makes so many business owners opt for these loans is that they offer flexible EMI options, allowing the borrower a better chance of paying instalments according to his/her convenience. Though both the loan amount and the interest rates depend on various factors, they are mostly negotiable. Increasing their popularity are the facilities such as low processing fees and pre-payment charges, auto-renewal of loan amount upon repayment, and no hidden costs. With the whole processing, documentation and then verification process done in a jiffy and that too in a hassle-free manner, they save valuable time and energy. 
 

5. Multiple usages

If you require business loans for growth, you are making excellent use of them. Until you are utilising it for a business purpose, financial institutions do not place any restriction on its usage. You can use a small business loan for inventory purchase, new equipment installation, marketing, staff hiring and training, and more. In addition, lenders offer different types of unsecured business loans for various business needs. In other words, business growth loans come in a customised form to meet every business’s needs. 

              Also Read: How Unsecured Business Loans Help in Growth of SMEs