A Guide to Unsecured Business Loan

While there are many types of business loans available in the country, , it is important to identify your fund requirements and then choose the right type of loan, best suited to your needs. The most common types of business loan are secured and unsecured loans. As the name suggests, a secured loan requires you to provide a security for the funds you need. You can use an asset and hypothecate it with the lender in order to raise funds for your business. On the other hand, an unsecured business loan is a type of loan where you do not need to provide any security for the funds. You can get access to funds without hypothecating any assets. You can also get the loan if you have no assets of your own.

The loan application procedure is simple and hassle free.
• You can start by identifying the amount of funds you need and why you need the funds.
• Based on the same, choose a lender who offers the loan at low interest rate and has flexible repayment tenure. In an unsecured business loan, the risk lies on the lender because there is no security attached to it. Hence, it helps to compare the interest rates offered by different lenders and then make a decision. Choose a lender that offers the lowest interest rate.
• Further, the loan amount will be based on your profile and your credit score. If you have a good credit score, it shows that you have paid your previous loans in due time. Thus, your application will be approved at the earliest with a good credit score.

Eligibility Criteria

• Different lenders will have varying eligibility criteria and you can compare the same online.
• Once you meet the eligibility criteria, you can fill up the application form online and submit relevant documents.
• You will be required to provide an identity proof, address proof, income proof and documents related to your business.
• You also needto provide Memorandum of Association, Articles of Association, balance sheet and income statement and projected balance sheet and income statement.
• Some lenders might ask you to provide your IT returns and bank statement for the past six months.

You can take your business to new heights with an unsecured business loan. No matter the type of business you own or the industry you operate in, you can achieve your goals with the loan. There are no restrictions on the end use of your loan. You can use it for working capital needs, to buy new equipment or to enter a new market. However, you need to repay the loan in due time. This will help build a strong credit score for the future. You can use the EMI calculator to estimate the amount of EMI payable on the loan. Simply check the estimated amount on EMI calculator online. All you need to do is to input the loan amount and tenure in order to get a quick estimate. You can change the inputs until you reach an optimal output.