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Why Business Loan Without Security Is Important For Small Business Owners?
Why Business Loan Without Security Is Important For Small Business Owners?

Starting your own business gives you the power to turn all your ideas into reality. The businessman puts all his ideas into practice without worrying about someone shouting at him. It is undoubtedly one of the best feelings in the world. That said, the businessman also does everything to get the business running successfully, including investing all his savings into the business venture.

However, after some time, a stage comes where all the savings exhaust and there is a need for urgent funds. It may be to buy new machinery or for investment in new place for business. Well, whatever be the reason, it is crucial to have access to funds to keep the business growing.

What are the options available after all the savings are exhausted? Selling ownership (equity financing) or mortgaging property to get funds? Well, this can be the options that the business owner does not find suitable for him. And to the business owner’s savior, there are business loans without security.

With business loans without collateral, the business owner has easy access to funds without selling ownership or property. These loans are offered by a number of financial institutes in India and the business owner can conveniently supplement his financials with the help of loans.

Business Loans without Security

Collateral-free business loans are financial products offered by various financial institutions in India. These business loans do not require to hypothecate security. And the business owner can use the funds for any business requirement as per his discretion. The minimum and maximum loan amount to be sanctioned depends on the credit profile of the borrower.

The business loans without collateral can be repaid over a flexible repayment tenure ranging between 6 months and 24 months. The lenders offering this type of loans for business have an online presence. This helps the lender to apply for loan conveniently from the comfort of his office or home.

All the business owner has to do is apply for a loan through the online loan application form and upload some documents. Most online lenders process the application and disburse the about within a few days.

What is the Importance of Unsecured Business Loans?

Small business owners in India struggle to manage to get funds because of the rising uncertainties in the Indian economy. This can be due to some urgent expense coming up or lack of contingency funds. The loans for business without security are the best option to provide relief in these situations. Let’s take a look at some reasons which explain the importance of collateral-free business loans:

Processing

The unsecured loans do not involve any collateral. So, the time taken to process these loans is reduced significantly. The loan provider is not required to measure the monetary value of the collateral which reduces the processing time. If all the required papers are provided in the first go itself, the application will be processed and approved/disapproved in a few days. So, quick processing makes unsecured loans an ideal option for handling unexpected financial situations.

Usage

 Mostly, the secured loan lenders are strict with their conditions and the end usage of the amount. However, this is not the case with collateral-free loans. The amount can be used as per the discretion of the business owner. This gives the flexibility of finance.

Repayment Period

Unsecured loans come with an extended and flexible repayment tenure. This tenure can go up to 24 months. This makes the repayment of the loan easier with easy monthly EMIs. The businessman can opt for EMIs as per his repayment capacity. And this, thereby, reduces the chances of non-payment of EMIs.

Foreclosure Charges

Most lenders who offer unsecured business loans offer loans with nil foreclosure charges. This means the business owner can repay loans early without incurring any additional charges. So, a significant cost on interest charges can be saved.

Collateral

There is a need to offer an asset to get collateral-free loans. So, the small business owners who cannot hypothecate collateral can avail these loans for their small business.

Eligibility Criteria

The business loan without collateral is offered at basic eligibility criteria. The lenders check the CIBIL score, bank statement, business vintage, ITR, and business turnover to determine the repayment capacity of the business owner. As a result, there are more chances of getting the loan application approved.

With the help of business loans without security, the small business owner can efficiently manage funds for his business and also ensure its growth and expansion.

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business loan, business loan, loan, loan, finance, finance, unsecured business loan, unsecured business loan, secured business loan, secured business loan, , ,

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