All You Need to Know About Unsecured Business Loans

Posted by Spana Gandhi on September 19th, 2019

Every business owner understands the need for funds. A business can only achieve its goals and reach new heights when there is access to adequate funds. It is not possible to raise funds from investors time and again. It is also not practical to borrow money from friends and family and this is where unsecured business loans play a role. Offered by banks and financial institutions in the country, the loan, as the name suggests, is unsecured. This means it does not require you to provide any sort of security against the funds. The process of application is simple and straightforward. You can apply for the loan in the same manner as you would apply for any other loan.

Unsecured business loans play a significant role in a business. It is available for every type of business in the industry and has a competitive interest rate. The loan amount is high and it has a flexible repayment tenure. As a business owner, it will help to scout the market for lenders who fit your needs and then make an application. Consider the terms and conditions offered by the lenders before you make a decision. Compare interest rate and tenure so as to choose a lender that is perfect for your needs. Every business will have certain unsecured loans. This ensures that you have funds without the need for hypothecation of an asset.

When you apply for the loan, you will have to provide details about your business, partners and the performance of the business. This includes a memorandum of association, KYC of all the partners and income statement and balance sheet of the business. The lender might also ask you to provide a projected income statement and balance sheet. It will help them estimate your ability to make the repayment. The loan has a high approval amount and flexible tenure which allows you to adjust the EMI as per your needs. Consider your monthly outflows and your ability to meet the EMI requirement. If you think that the EMI amount is very high; you can ask them to increase the tenure of the loan.

Start by considering the purpose of borrowing. Only then you will be able to decide on the amount of funds you need. When you are clear about the funds you require, look for lenders and then make an application. The loan has a quick approval and the funds will be transferred in your account within no time. The best thing about unsecured business loans is that you get funds without any security. The risk remains with the lender and this is why the interest rates will be slightly higher. The loan is ideal for those business owners who do not have assets they can hypothecate. You simply need to check the eligibility criteria and make an application. The loan will help take the business to new heights. You can use this amount for any purpose in the business.