Small businesses are more prone to a first downfall. It’s not always their fault but it can be inevitable in some situations. It can be difficult to get a loan for your small business, and especially in India. If we look at it more closely, this is not surprising. Small businesses are often refused MSME loans by Banks and NBFCs. Banks and NBFCs do not consider such businesses profitable enough for them to bother with the paperwork and hassle.

These institutions may also require collateral as a condition for granting a loan. Small businesses, whether newly-formed or older, may not have the collateral assets necessary to meet these requirements. Small businesses are not in a No Man’s Land when it comes down to lending. There are several Fintech companies, banks, NBFCs and Business Loan Providers that offer Unsecured business loans with competitive interest rates and no collateral. Flexi Loans provides business loans for all SME and MSMEs in India. It offers loans without collateral at attractive interest rates with flexible terms.

Many businesses seek funding from venture capitalists and angel investors. It is difficult to convince these investors to invest in a business venture. Venture capitalists are often receptive to business plans that have not been fully developed. A bank or non-banking company is easier to contact. Angel investors often demand a portion of the profits from the company in return for their investment. When seeking funding without taking on debt, company owners often lose the sole ownership of their business.

When applying for a loan to start a business, you don’t have to worry about sharing or losing ownership. Profits a business owner earns from a loan are solely his or hers. The owner has no obligation to give the lender a share of any profits the company makes.

In India, there are increasing numbers of lenders who offer Unsecured Business Loans. This article will provide you with the Top 5 Reasons why a Small Business should consider getting an Unsecured Business loan and how it can help them grow.

Top five reasons for getting an unsecured business loan

Working Capital

Working capital is the most important monetary requirement of any small business. Working Capital will be needed to keep your business running smoothly. This particular funding requirement is not huge if you are a small-business owner. It is difficult for Business Loan Providers, who are hesitant to lend money to a small business, to convince them to do so.

Unsecured Business Loans eliminate this problem because you don’t have to provide a reason that is absolute for the loan. It is not necessary to use all of the money you have received as a loan for one purpose. You can instead use it as working capital.

Access to Unsecured Business Loans

FinTech companies offer a number of benefits, but the most important is how quickly and easily they can provide a small-business loan that’s unsecured. Most loan providers now make it easier for customers to get a small business loan. You can apply for a Small Business Loan by visiting these loan providers’ websites.

These websites are very user-friendly. They have online guides to guide borrowers through the business loan application process. These websites display different commercial loan offers and features. Online, a borrower can search for the best business loan option that suits his or her needs.

It takes longer to process a loan application through a NBFC or a bank because there is more paperwork involved. Documentation is increased by the requirement of collateral and guarantors. FinTechs offer unsecured loans that are faster. The process is completed mostly online, saving time for both the lender and borrower.

The requirements can occur at any moment and cannot be delayed. As a small company, you can’t afford the time wasted filling out long unsecured loan applications and gathering all necessary documents.

Instant Access to Funds and Online Business Loans

FinTech companies offer online applications that can be quickly completed with a mobile application. All required documents must also be uploaded online, including bank statement, previous loan statement, tax statement, invoices for business, and KYC documents.

Documentation required for an unsecured loan to a business is minimal. The borrower must submit their identification documents, proof of residence, SPDC and a voided check. Some lenders may require bank statements, relevant financial documents, or certifications of your business’ existence.

Online applications can quickly and easily process any business loan application. The borrower may meet all the criteria set by the loan provider. The loan application could be processed faster and the loan amount sanctioned instantly if the borrower meets all of the eligibility criteria.

Unsecured credit lines are financing options that provide money for small businesses on a revolving schedule. These arrangements are more attractive to lenders because the borrower is required to pay on a regular basis. The lender may extend a bigger loan after the borrower pays back the loan.

Flexible Unsecured Business Loans

You must state the purpose of the loan when you apply for one. Consider that if you set up a fund to expand your business, the money can only be used in that way. The loan cannot be used in any other way. When you take out a unsecured loan to finance fin-tech, or a DSA, however, you are in complete control of how the money is spent. You can use the money for anything you want, such as marketing or expanding your business.

As a short-term form of credit, most loan providers offer business loans that are unsecured. A term of 12-60 months is typical for an unsecured business loan. It allows owners of businesses to stop paying EMIs for long-term loans. Due to the shorter loan terms, it will be easier for borrowers to maintain a healthy cash flow. To make the loan repayment process as easy as possible, many business loan providers offer flexible repayment options.

Benefits of Unsecured Loan Interest Rates

FinTech companies offer unsecured loans with the lowest rates and most affordable terms. FinTech firms offer high-quality services, but also have the advantage of flexible repayment terms for unsecured loans. The company can then focus its resources on expanding. Small business loans without collateral are also available depending on how profitable and able the company is to grow. There is some flexibility when it comes time to approve the loan. A pledge of any asset is not required.

Small businesses can grow with unsecured loans. Our diverse range of unsecured loans tailored to small business needs across all industries is a good example of this. All unsecured loan products are subject to a 2% fee in addition to interest rates and processing charges. There are no additional fees or charges, other than the processing fee and interest rate.

Conclusion

Unsecured Business Loans can be beneficial to your business, whether you’re an old MSME or brand new. It’s not worth the higher interest rate for the amount of the loan, but the peace-of-mind it provides is. You should weigh the pros and cons of a loan to determine if it is right for your business. If you’re confident about the progress of your business and can afford high interest rates, applying for an unsecured loan is a good idea.