Is an Unsecured Loan the Right Option to Fund the Growth of your Business

Why opt for an Unsecured Loan to Fund your Business?

1. No collateral

Just to reiterate, unlike secured loans that require an asset as security, no collateral is pledged against an unsecured loan. It eliminates the risk of losing the asset in case of a default. It is the best option especially for those who have no asset to pledge in the first place.

2. More loan bandwidth:

In cases of secured loans, the amount of loan sanctioned is about 80-90 % of the collateral’s market value that is being mortgaged. But since there is no collateral involved in unsecured loans, business owners can avail a higher loan amount. Also, such loans can be used for any purpose associated with the business.

3. Quick processing

Financial institutions usually take a lot of time in the processing, documentation, and then verification, in case of traditional loans. But when it comes to unsecured business loans, the flexible eligibility criterion leads to a high approval rate and the loan is quickly sanctioned.   

4. Fast funds

When small and medium-sized businesses require funding, they need it almost immediately. For example, if they need capital to deliver an order in the next 10 days, they can’t wait for the lender to take a week to sanction the capital. Businesses will miss the benefit from a new opportunity in such delays. While a traditional loan can take up to 10 days to disburse the capital, in cases of unsecured business loans, business owners can get it in a quick time. 

5. Tenure

Since Unsecured Business Loans offer flexible repayment option, the borrower can choose the tenure according to his/her comfort. The tenure of the loan can easily range from six months to three years. There’s a fixed date of repayment every month in other loans and since small business that mostly rely on invoice clearances to maintain its cash flow can get in soup if the payments get delayed. Luckily for them, Unsecured Business Loans come with flexible EMI options and allow the borrower a better chance of paying installments according to his/her convenience. 

6. Friendly terms and conditions

Apart from its many advantages, business-friendly terms and provisions like low processing fees and pre-payment charges, auto-renewal of loan amount upon repayment, and no-hidden costs make Unsecured Business Loans a preferred option. One can easily apply for such loans through the online medium and the whole process takes place in a hassle-free manner. It also helps in developing a good and long-term relationship with the lender.

Today, many businesses owe their growth to Unsecured Business Loans. While secured loans come in handy for long-term finance, in case of short-term needs that require immediate funding, the unsecured business loan can be your Man-Friday.  With its flexible loan amount, interest rates, repayment options, and many other features, such loans are helping small businesses, especially startups, run their operations without hitting the panic button.