Whether you are a budding entrepreneur with revolutionary business ideas or an existing business owner with plans of making your business empire bigger, you may be in need of a business loan. A working capital business loan will help you continue fuelling the growth of your business in a positive direction. A business loan can also help you in investing in new machines or equipment to improve the quality of products you provide to your customers. When it comes to business loans, there are two types of it: secured and unsecured.
What Is A Secured Loan?
Directly speaking, a secured loan is tied to a personal asset of yours, such as your home or car. When you take a secured loan, you pledge a specific property to the lender as security for repayment of the loan you have taken. In the event of a default, your property can be forfeited. The property you have pledged is referred to as the loan collateral. In case you fail to repay the loan, the lender has the legal right to sell your property to repay the loan you have taken. The example of a secured loan is mortgage.
What Is An Unsecured Loan?
Contrary to a secured loan, the borrower does not need to pledge collateral to take an unsecured loan. An unsecured loan is solely issued on the basis of your ability to repay the loan or your creditworthiness. An unsecured loan, sometimes called a signature loan, is supported only by the borrower’s credit score, rather than by any collateral. Credit cards might be the best-known type of unsecured loan.
What Are The Advantages Of An Unsecured Loan?
- No Collateral Required: We at ZipLoan, completely understand that the lack of collateral can prove to be an obstacle in the way of business owners looking to expand their business. One of the biggest advantages an unsecured working capital loan is that you do not need to pledge any collateral, so there is lesser risk involved for you. The absence of high-value assets in your business does not stand in the way of your business expansion, as unsecured business loans eliminate the requirement of collateral. You can concentrate on growing and expanding your business while maintaining peace of mind since your valuable assets are not at risk.
- Quick Processing Time: For any business, time is the most precious resource. An unsecured working capital loan or an unsecured business loan gets processed in no time. The time needed to secure it is fairly short. At ZipLoan, the disbursement of the unsecured business loan takes place within a couple of days of the signing of the contract.
- Easy Eligibility Criteria: You are eligible to get a loan even if you do not wish to put up your assets as collateral. Small businesses are often unable to raise funds due to the lack of collateral and the huge number of documents required to secure a loan. To solve this problem, ZipLoan has an eligibility criterion which is very easy to fulfil and requires a minimal number of documents. We use our credit evaluation process to assess your creditworthiness and provide you an unsecured business loan to fuel your growth.
- Short Repayment Deadlines: You can repay the business loan you have taken in easy monthly instalments ranging from 12-24 months, according to your will. A shorter repayment deadline will help you in planning your short-term business expenditures and long-term growth plans.
- Credit Score Improvement: On the successful repayment of your unsecured business loan, your credit score is guaranteed to improve helping you further in your business journey whenever you are in need of a loan.
- Availability of Smaller Amounts: In unsecured loans, you have the freedom of borrowing smaller amounts of money. That allows your business to cover the tougher slower periods without committing to longer repayment terms which are frequently associated with secured loans.
Now, you understand what unsecured loans are and the benefits of taking an unsecured loan.
At ZipLoan, we aim to support business owners with our customer-friendly policies when it comes to unsecured working capital loans. Consequently, we have come up with a paperless and online hassle-free application process to make it easy for you to take unsecured business loans. You can easily submit the soft copies (PDFs preferably) of the small number of documents we require to process your loan.
A completely online application process eliminates your need of visiting the lender. ZipLoan provides unsecured business and working capital loans to MSMEs ranging from Rs. 1-5 lakhs which can be quickly paid in a range of 12-24 months in easy monthly instalments (EMIs).