Unsecured business loan the right option for SMEPosted by Saloni Nair on May 27th, 2019 Usually, a small and medium enterprise (SME) grows as its customer base and profit grows. But what if you need to just expand your SME but does not have sufficient capital back up to do so? Going forward in such cases would require an additional capital pool which might not be available at hand. So what are the options an SME is left with? The best thing to do in such a scenario is to avail a business loan in order to create a capital pool which can be used to fund the required additional costs. These additional costs can be in the form of working capital and inventory purchase. In order to help the SMEs expand, all the top lenders in the country, banks and NBFCs, provide business loan facility to the SMEs as long as they satisfy the required eligibility criteria. Unsecured business loan Although there are multiple financial institutions which are offering easy business loans for SMEs, many SMEs find it really very challenging to get business loans. Many business loan applications get rejected just because the SME does not have anything for collateral. Many SMEs run their business by rental and they don’t have their own property. So how will they get a business loan to make their SME grow? Answer to this question is availing an unsecured business loan. Itis not backed by any asset and does not require advancing an asset in order to avail the business loan. The business loan is provided on the basis of the repayment capacity and creditworthiness. An unsecured business loan is of shorter tenure minimizing lender’s risk. How is unsecured business loan the right option for SME If the capital requirement is an urgent one, an unsecured business loan is definitely the right option to go for. It has a lower disbursal time as the lender only needs to verify the repayment capacity of the applicant. The following features ensure that unsecured business loan is the right option for SME.
Bottom Line In order to avail an unsecured business loan, SME should have a good credit history. If the track record of a company in terms of credit history is not good then getting a business loan can become a difficult task! %MCEPASTEBIN% Like it? Share it!More by this author |