An unsecured business loan is availed many times by a business owner due to the inadequacy of working capital to fund business operations. Banks and other traditional lenders generally do not provide assistance in these situations as they require security which small businesses often cannot provide. So, an MSME unsecured loan helps in maintaining business expenditure, such as making payments to suppliers, purchasing raw material, and maintenance of machinery. Sometimes, quick funds are also required to seize new growth opportunities.
When an unsecured business loan is availed, its repayment schedule should be in sync with the revenue flow of the business. This aspect also makes the business loan without security the first choice for MSMEs as they come with flexible repayment tenure. Also, they are approved and disbursed faster. All these points make unsecured loans extremely popular amongst small businesses. Let’s take a look at several reasons for the same.
A businessman can witness a growth opportunity at any time. Therefore, he requires access to adequate funds at all time. In case there is a need for working capital, these MSME loans help in improving the financial situation. MSME unsecured business loan comes with 0 prepayment penalty and flexible repayment tenure.
Also Read :- How To Apply For MSME Loan in India?
The technological advancement and digital improvement in the IT systems have led to the rise in many FinTech Companies in the previous few years. These companies have a different approach where they process the loan application faster and disburse loan amount within a few days. Even the borrower can apply for a business loan online through the lender’s website. The business loan documents such as ITR, bank statement, and KYC documents can be uploaded in digital format.
Unsecured Business Loan for Every Business
The new-age lending companies have designed different loan products that fulfil varying business needs. Their different loan offerings include machinery loan, term loan, flexi loan, working capital loan, and capital loan. These loans are offered to businesses which are in operation for more than 2 years. Such MSMEs can avail loans of 1-5 lakhs for a duration of 12 months to 24 months.
The unsecured business loans for MSME are offered at most competitive interest rates. The processing fee charged on it is very minimal and there are no additional hidden charges. Other benefits of availing MSME loans are flexible repayment tenure, online loan application, and minimal documentation. These new-age Fintech Companies have really eased down the pain of the MSME owners while procuring funds with their fast and hassle-free services.
All the above said reasons make the unsecured business loans the best choice for MSMEs. And by availing MSME loan, the borrowers can scale-up their business by focusing more on business growth and not worrying about finances. Additionally, you can also register your business for free at the Connect App by ZipLoan to build your business network. Through the e-marketplace, you can create a business profile, list your products/services, find business, discover new business opportunities, and build connections.