Unsecured business loans are short-term loans offered without collateral to the borrower. Applicants can use these loans for setting up a new business, acquiring any subsidiary arm, or encouraging growth in the ongoing business.
Start-ups and small and medium enterprises (SMEs) apply and depend on unsecured business loans for their expansion and often survival. Unsecured business loans are the best option for an individual or company undertaking high cash-flow businesses.
The following are the reasons for the popularity of unsecured business loans:
- Demand for this type of loan is towering because of the no collateral requirement and low-interest rates offered by financial institutions. Lenders like Fullerton India offer minimal and low-interest business loans, depending on the applicant’s business and repayment capacity. Low-interest business loans are available with desirable repayment tenures for those with good credit history.
- The loan amount can be provided up to Rs. 50 lakhs depending on the applicant’s business, profits generated and tenure of business operation.
- Since no collateral is involved, time-consuming processes like property verification and valuation are omitted. With hassle-free application and document submission, it takes less time for the loan to be sanctioned by the lender.
- After submission, fulfilling all the criteria and documentation, it takes two to three working days for loan approval. A flexible repayment procedure is also involved, with a tenure of up to 48 months.
Even though the interest rate, loan tenure, and principal amount might differ according to the financial institution, the basic eligibility and documentation process almost remains the same for all lenders.
