What are the advantages of Unsecured Business Loans in Delhi

Posted by Abhishek Saurya on April 27th, 2023

Are you a business owner in Delhi looking for ways to grow your business? Have you considered taking out an unsecured business loan? Unsecured business loans are a popular financing option for small and medium-sized businesses that need quick access to capital without the hassle of offering collateral. In Delhi, where the business landscape is constantly evolving, unsecured business loans can be the key to unlocking growth opportunities. By providing the necessary funds to expand operations, hire new employees, or invest in new technology, unsecured business loans can help businesses in Delhi stay competitive and thrive in today's fast-paced economy.

In this article, we'll explore the benefits of unsecured business loans in Delhi, how to qualify for one, and where to find the best lenders in Delhi. So, let's dive in and discover how unsecured business loans can help your business grow and succeed in Delhi.

Advantages of Unsecured Business Loans

Unsecured business loans have several benefits that make them an attractive financing option for businesses in Delhi. First and foremost, unsecured business loans do not require collateral, which means business owners do not have to put their personal or business assets at risk. This can be particularly appealing for businesses that do not have valuable assets to offer as collateral or for business owners who are not comfortable with the idea of risking their personal assets.

Secondly, unsecured business loans typically have a faster turnaround time compared to traditional secured loans. This means that businesses can get the funding they need quickly, which is crucial in a fast-paced business environment like Delhi. Additionally, unsecured business loans are more flexible than secured loans, allowing businesses to use the funds for a variety of purposes such as expanding operations, purchasing inventory, or hiring new employees.

Lastly, unsecured business loans can help businesses build credit. By making timely payments on their unsecured business loan, businesses can establish a positive credit history, which can help them qualify for better financing options in the future.

Types of Unsecured Business Loans

There are several types of unsecured business loans that businesses in Delhi can consider. The most common types of unsecured business loans include:

• Business Line of Credit: A business line of credit is a revolving loan that allows businesses to access funds as needed. The business owner can draw on the credit line up to a certain limit and is only required to pay interest on the amount they borrow.

• Merchant Cash Advance: A merchant cash advance is a type of loan that is repaid through a percentage of the business's daily credit card sales.

• Invoice Financing: Invoice financing allows businesses to borrow against their outstanding invoices. The lender provides a percentage of the invoice's value upfront and collects payment from the customer when the invoice is due.

• Term Loan: A term loan is a fixed loan amount that is repaid over a set period of time with interest.

Eligibility Criteria for Unsecured Business Loans in Delhi

To qualify for an unsecured business loan, businesses in Delhi must typically meet the following eligibility criteria:

• The business must be registered and operating in Delhi.

• The business must have a minimum annual revenue of Rs. 10 lakhs.

• The business must have been in operation for a minimum of 2 years.

• The business must have a good credit history and credit score.

How to Apply for Unsecured Business Loans in Delhi

To apply for an unsecured business loan in Delhi, businesses must typically follow these steps:

• Research lenders: Research and compare different lenders to find the best financing options for your business.

• Gather documentation: Gather all necessary documentation, such as financial statements, tax returns, and bank statements.

• Fill out the application: Fill out the lender's application form, providing accurate and up-to-date information about your business.

• Wait for approval: Wait for the lender to review your application and make a decision.

• Receive funding: If approved, receive the funds in your business bank account.

Unsecured Business Loans vs. Secured Business Loans

While unsecured business loans have several advantages, secured loans also have their benefits. Secured loans typically offer lower interest rates and higher loan amounts, which can be appealing for businesses that need significant funding. Additionally, secured loans can be easier to qualify for if the business has valuable assets to offer as collateral.

However, secured loans also come with risks. If the business is unable to make timely payments on the loan, the lender can seize the collateral, which can be devastating for the business owner. Additionally, the collateral may not be worth the loan amount, leaving the business owner responsible for paying the remaining balance.

Top Lenders Offering Unsecured Business Loans in Delhi

There are several lenders in Delhi that offer unsecured business loans. Some of the top lenders include:

• Capital Float: Capital Float offers unsecured business loans with loan amounts ranging from Rs. 3 lakhs to Rs. 50 lakhs. The loan term ranges from 1 to 3 years, and the interest rate starts at 16%.

• Lendingkart: Lendingkart offers unsecured business loans with loan amounts ranging from Rs. 50,000 to Rs. 2 crores. The loan term ranges from 1 to 36 months, and the interest rate starts at 18%.

• FlexiLoans: FlexiLoans offers unsecured business loans with loan amounts ranging from Rs. 50,000 to Rs. 1 crore. The loan term ranges from 1 to 24 months, and the interest rate starts at 18%

• OPEN Capital: OPEN Capital offers unsecured business loans with loan amounts up to Rs. 30 Lakhs. The loan term ranges from 60 months, and the interest rate starts at 11-15%.

Documents Required for Unsecured Business Loan Application

To apply for an unsecured business loan in Delhi, businesses typically need to provide the following documents:

• Business registration documents

• Financial statements, such as balance sheet, income statement, and cash flow statement

• Tax returns for the past 2 years

• Bank statements for the past 6 months

• ID proof of the business owner

How to Increase Your Chances of Getting Approved for an Unsecured Business Loan

To increase your chances of getting approved for an unsecured business loan in Delhi, consider the following tips:

• Improve your credit score: Make timely payments on your existing debts and keep your credit utilization ratio low.

• Build a positive credit history: Establish a positive credit history by making timely payments on your bills and debts.

• Prepare a strong business plan: A well-prepared business plan can demonstrate to lenders that you have a clear vision for your business and a plan for how to use the funds.

• Keep accurate financial records: Accurate financial records can help lenders assess your business's financial health and make a decision on your loan application.

Conclusion

Unsecured business loans can be a valuable financing option for businesses in Delhi that need quick access to capital without the hassle of offering collateral. By providing the necessary funds to expand operations, hire new employees, or invest in new technology, unsecured business loans can help businesses stay competitive and thrive in today's fast-paced economy. To find the best financing options for your business, research different lenders, gather all necessary documentation, and fill out the application accurately and honestly. With the right financing and a solid business plan, your business can unlock growth opportunities and succeed in Delhi's dynamic business landscape.