When an individual leaves the confines of his job to start a new business, it is certainly one of the best feelings. Finally, he has the freedom to work in his own way, put his ideas into practice, and try new ideas without any worries of someone shouting at him. With the renewed vigour and enthusiasm, he happily puts in extra hours to work, travels to great distances and places, meets new people, and does everything which is required to get the business running to fast track. It also includes investing his life savings in the business venture.
After a point in time, a stage comes where he realises that all his savings are exhausted. However, there is an urgent need for funds. The requirement can be for the purchase of a new piece of machinery or to buy a new office space. Well, whatever the reason may be, it is vital that the business owner has easy access to funds as it helps to keep the business growing.
But what is the best option when all the savings or funds are exhausted? Mortgaging personal property or selling a part of business ownership? Well, this is a dreaded situation which is not welcomed by every business owner. Nevertheless, the availability of collateral-free business loans allows the entrepreneur to have easy access to funds, that too, without resorting to above said extreme measures.
With the help of top financial institutions in India that offer business loans without security, the small business owners have the opportunity to supplement his business financials conveniently.
Importance Of Unsecured Business Loans
- Quick Processing: unsecured loans don’t involve collateral. Therefore, the time taken to process the loan application is reduced. If the applicant provides all the necessary documents/papers in one go, the application will be finalized by the loan lender in 72 hours itself. This quick processing makes the unsecured loans an ideal option for handling financial emergency the small business may be facing.
- Flexibility to Use: secured loans mostly come with strict terms and conditions regarding their usage. This is not the case with unsecured loans. The business owner can use the amount as per his discretion for any business-related activity. Moreover, there is no need to inform the online lender regarding the end use of the money. Therefore, the control of the business finances stays with the business owner.
- Extended Repayment Period: unsecured business loans come with an extended repayment tenor up to 24 months. This makes it convenient and easier for the business owner to repay the loan EMIs without affecting the daily functioning of the business. He can opt for EMIs according to his budget. Thereby reducing the chances of non-payment of EMIs.
- No Foreclosure Charges: unsecured loans mostly come with the facility of no foreclosure charges. This means the business owner can pre-pay the business loan without incurring any additional charges after the payment of 6 EMIs. Therefore, he can save a significant amount of interest cost.
- No Need for Collateral: the unsecured business loans are ideal for small businesses who don’t have collateral to hypothecate.
- Flexible Eligibility Criteria: most lenders follow flexible business loan eligibility criteria. They weigh other factors as well in addition to CIBIL score during the process. Therefore, the application has high chances of approval, even if the CIBIL score is less.