Unsecured Business Loans

- Facts and Benefits for MSMEs

Helping Small Businesses Grow…

Unsecured Business Loans – An Insight

What is an unsecured business loan?

An unsecured business loan is a loan offered by a lending institution, such as a bank, to a business.

When taking an unsecured loan, the borrowing business is not required to place any business (or personal) asset as a collateral or security on the loan.

Since lenders do not seek any collateral against unsecured loans, they are a viable financing option for businesses of all sizes.

Such loans are ideal for young small businesses that are still in the expansion phase and need some financial assistance.

Unsecured Vs Secured Business Loans

Following are the basic characteristics that differentiate secured business loans from unsecured business loans:

In case of unsecured business loans, the interest rates and repayments remain fixed for the life of the loan.

Unsecured business loans are not attached to the borrower's assets.

The rate of interest is usually higher for unsecured business loans as compared to the secured business loans.

There is less amount of paperwork involved and the whole process is faster than a traditional loan process.

Why MSMEs Should Prefer Unsecured Business Loans?

There are numerous reasons why MSMEs should look for unsecured business loans:

1. Easy to obtain

2. No collateral required

3. More autonomy

4. Freedom over business assets

5. Consolidation of debts

Why MSMEs Should Prefer Unsecured Business Loans? (contd.)

6. Sometimes, businesses are under great pressure from banks to settle financial issues. In such cases, unsecured loans are a good solution as they are easy to get and have minimum risk potential (for borrowers) as compared to secured business financing.

7. Borrowers do not need a collateral. On the other hand, in case of secured loans, if a borrower defaults, a lender can seize the collateral that is pledged against the loan.

Unsecured Business Loans: Growing in Popularity

More and more businesses (and individuals) are looking for unsecured business loans, even though they come with a higher rate of interest and fixed repayment options.

There are a number of banks and other lending institutions offering these loans. Many financial institutions have their own criteria for such financing options.

It is important for a business to get in touch with a credible lender whenever there is a requirement for an unsecured business loan.

Why Not to Borrow From the Informal Market?

Although the Informal lending market gives easy access to funds, the interest rates are much higher. Usually 2% - 3% higher than the formal market rates.

Business loans are accessible to entrepreneurs with good networks.

Borrowing from the formal sector helps businesses maintain and make credit rating better for their small or medium enterprise.

Future access to easy business loans at better rates is possible through a credible lending resource.

Why apply for unsecured business loans on Biz2Credit?

Free online registration within minutes

Access to a wide lender network

Competitive interest rates offered by lenders

Online loan application, approval and disbursal

Fast loan processing

Safe, paperless transactions

Access to real time loan details online

Proactive customer service

If you are looking for an unsecured business loan, look no further than Biz2Credit.in.

Our transparent, fast and secure lending platform can help you access business funding faster than you have ever thought.

Visit www.biz2credit.in to get more details.

Helping Small Businesses Grow…