Small-scale business owners need access to business loans to take their business to new heights. But they often lack collateral to back the loan amount. It is very common for the small business person not to have business assets to offer as security for the business loan. So, a loan without collateral turns the best option for them, as they don’t have to hypothecate an asset to get the loan approved.
Now let’s take a look at the benefits of collateral-free business loans.
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No Collateral Required
It is an obvious advantage of availing a loan without collateral. Firstly, this offers a lot of flexibility to the borrowers. Secondly, business owners who don’t have security can also have access to loans. And finally, loan seekers also get the advantage of financial independence as he is not required to give up his assets to get financial credit for the business.
Expandable Credit Limits
In secured loans where the collateral is necessary, the loan amount is limited to a certain percentage of the value of the collateral. However, in the business loan without security, the amount only depends on the applicant’s creditworthiness. It means the borrower can get a higher amount as well in case of collateral-free business loans.
Hassle-free Application Procedure
Unsecured loans are processed and sanctioned easily as compared to secured loans. The lender does not have to evaluate the value of the asset hypothecated to determine the loan amount. It saves time. Additionally, the procedure of the business loan is easy, which can be done online and comfortably from the home or office. Just sit on a computer or fill the application through the mobile.
With not so many formalities involved, an unsecured loan is generally approved, sanctioned, and disbursed within a few days. Also, they are offered at minimal documentation and don’t have a lengthy loan process.
A loan without collateral is generally offered by NBFCs in India since they are willing to take the risk. NBFCs have a hassle-free loan application process where they disburse loans in as less as just three days. They don’t require a long list of documents and offer loans at basic eligibility criteria. Additionally, they offer loans at the most competitive business loan interest rates in India.
So, one can conclude that availing unsecured business loans are straightforward and hassle-free with the help of the points mentioned above. They undoubtedly consume less time, and their approval is quite easy.