A small business often requires more or additional funds to finance its day-to-day activities, expand operations, invest in infrastructure, or just to increase working capital. However, many times, due to lack or inadequate funds, its growth is hindered. It is when a small business opts to avail Business Loans.
However, traditional lending institutions in India, such as banks, rarely offer loans to them as they demand collateral which a newly established business or small enterprise mostly fail to provide. In such a scenario, an unsecured business loan comes into the picture. A small business enterprise can easily avail unsecured business loans that can take care of its routine business expenditures, including making payments to suppliers, maintenance of machinery, and purchasing raw materials. An enterprise may also avail business loan to purchase new machinery or plant or to expand the business.
The unsecured business loans for small business are gaining popularity in the market for several reasons. Let’s take a look at the reasons why unsecured loans are turning extremely popular amongst small businesses.
A Great Help in strengthening Business Finances
A small enterprise can witness a suitable business opportunity at any time. Therefore, it requires adequate financial resources at all times. In any such scenario, the small business can avail an unsecured loan to meet its working capital requirement until the situation improves. The loan for small enterprises ensures that no business finds itself at any disadvantage when it faces a new growth opportunity. These loans vary in terms of repayment tenure, from 12 to 36 months, and can be repaid in easy EMIs which are automatically deducted from the borrower’s account.
Quick Access to Funds
The recent advancement in technology has led to the vast development of IT systems. Thus, there is a rise in an online business loan providing companies as well, which offer a loan without a personal visit on the part of the borrower. These companies use innovative technologies to disburse loan products to small businesses. You can simply apply for loan online or through a mobile app by submitting the required documents. The additional benefit here is that many loan providing companies these days require less number of documents to just the ITR of last 1-2 years, PAN card statement of a minimum of nine months, and Aadhaar number. Once these companies process the loan application, the loan amount is transferred to your account within a few days.
Different Loan Products for Every Business
The unsecured business loan providers understand that every business is different and therefore, design and offer different loan products as and according to the needs of the borrowers. The loan products are designed for small businesses which are in business for more than two years and operating successfully. A few such examples of different loan products are a capital loan, machinery loan, and working capital loan.
Favorable Terms and Conditions
The unsecured small business loan online is usually offered at the favorable terms and conditions of the borrower. The loans are offered at the most competitive interest rate. Another great benefit is many unsecured loan providers offer flexibility in loan repayment—they do not charge for prepayment of the loan after the payment of certain EMIs which helps the borrower save penalty as well as interest.
The unsecured small business loan online is designed in a way that the small business owners can focus on their core business and its growth without worrying about getting finances!