You can avail business financing in primarily two types, categorised under secured and unsecured funding options. While secured business financing often relates to either long-term funding or for high-value capital infusion into the venture. Irrespective, these financing decisions are undertaken after extended assessment of financial stability and borrowing futility. Contrarily, and more commonly, a business loan without security often comes into picture for the quick financing requirements of the venture, and can be decided upon based on a few crucial parameters only without needing to go into elaborate assessments.
Naturally, unsecured business loans are more sought-after today than their secured counterparts. Given that they come in high financing quantum, a venture can easily settle for these loans instead of availing one against security to meet their big-ticket financing requirements. For a business, a loan without security brings various opportunistic avenues through its integrated features and benefits, which a prospective borrower must ideally know to make the most of the financing option. Here are listed some of the most popular ones.
Top Features and Benefits of Collateral-free Business Loans
1. Easy to meet eligibility and paperwork requirements
To start with, the typical feature of these advances is the simple unsecured business loan eligibility and document requirement. Along with zero collateral submission, you need to meet only a handful of eligibility criteria to avail financing, a credit score of 700 or above being the foremost of them. Other than that, you must fall in the minimum to maximum age range, have a stable business operating for a stipulated number of years with dedicated income, and should be a residing Indian citizen for at least a year to avail the advance.
Accordingly, you need to submit a handful of documents too related to these requirements to prove your eligibility along with the KYC documents like identity and address proofs. With online application, the paperwork is reduced too by eliminating any redundant requirements, and fast-tracking loan processing.
2. Quick online accessibility
Applying with the necessary unsecured business loan eligibility requirements, you are likely to receive quick approval for your loan application. To ease financing for businesses, some lending institutions have reduced the approval time to as low as within a few minutes of application only.
Further once approved, the loan disbursal is pretty fast too, with the business receiving the money in account within the next 24 to 48 hours based on the city it is located in. Make sure to apply online and check out for pre-approved offers to further reduce the time taken for financing.
3. Financing up to Rs.25 Lakh for eligible applicants
To meet the high-value financing needs of enterprises, the funding amount of a business loan without security can go as high as Rs.25 Lakh. You can thus fulfil your working capital financing needs, pay off business debts, bring in new machinery, upgrade existing operational set-up, innovate the office space, and meet several other financing needs with such a high financing quantum.
4. Tenure flexibility
Not to mention, the unsecured business loans also come with an extended tenure flexibility going easily up to 5 years based on borrower requirements. A long duration for the loan keeps repayments affordable and allows the business to manage the finances better.
5. EMI affordability
With the availability of an extended tenure, repaying your business loan in easy EMIs is possible now. All you need to do is check whether the chosen tenure and loan amount keep the instalments within your repayment capacity or not and adjust the two values accordingly. All of this you can do with the help of the EMI calculator, a free financial tool available online with several reputed lenders today.
9. Affordable rates of interest
And of course, your business loan without security remains affordable too with low rates of interest applicable to the advance. Other fees and charges are levied nominally as well to keep the total cost of your loan in check. Make sure to enquire about the applicable rates before proceeding for an improved borrowing assessment.
Based on these features and facilities of a business loan without security, one can safely say that it is one of the most lucrative financing options for businesses today. The favourable terms that these loans come with only make them easy to manage for the borrower. Not to mention, you always have the option to switch to a new lender offering better rates midway through your loan tenure with the balance transfer facility available on these financing options.