Unsecured loan for small businesses is available from a wide array of alternative lenders. This type of loan doesn’t need small businesses to show any asset. A business loan without security can help your business develop, fund new R&D, help you maximize into new territories, improve sales and marketing efforts, help you employ more staff, and so forth.
Let us have a brief discussion on what a business loan without security is and how you can apply for such kind of loan following a step-by-step process!
What Is An Unsecured Business Loan?
Business owners who don’t have assets to show or don’t wish to take the risk of showing assets, go for availing a business loan without security. And this is why many FinTech companies like Indifi offer such type of loan. An unsecured business loan is collateral-free and is given on the basis of the borrower’s creditworthiness and credibility. While approving such kind of loan, the bank details, business turnover, and the CIBIL score are considered by the lender.
Steps To Follow To Apply For an Unsecured Business Loan
Technology has simplified the process of availing collateral-free loans for business persons these days. So, you can easily avail a machinery loan, flexi loan, working capital loan, or a business loan with no security online. You just need to follow the steps mentioned below:
Step-1: Check eligibility criteria
Every lender schedules eligibility criteria for borrowers. Here is a list of eligibility criteria for an unsecured loan:
- The business owner should have a physical location for his business.
- The business should have filed income tax returns of INR 2.5 lakhs and it should have a yearly turnover of INR 10 lakhs in the previous year.
- The business should have at least 2 operational years.
The one whose eligibility criteria you fulfill should be considered by you. If you find that your eligibility criteria fulfill more than one lender, check out who offers loans at the lowest rate of interest.
Step-2: Choose the right lender
Seeking the right lender is a vital step. You must choose the right one as you are borrowing the loan with no security. It must be an online lender or an NBFC. The best lender will provide unsecured business loans at minimal documentation, basic eligibility criteria, and lowest interest rates. The process will be seamless.
Step-3: Apply for the loan online
You must apply for the business loan without security online if you meet the eligibility criteria of the lender. Maximum NBFCs provide an online application form so you don’t have to visit the lender personally. Just visit the lender’s website, fill the application form with all necessitous details and submit.
Step-4: Submit all required documents
While applying for business loans online, you should submit all needed documents. Just upload the PDFs of the same online on the website. The required documents include:
- Business address proof
- Bank statement and ITR details
- Aadhaar Card and Pan Card
Step-5: Loan approval and distribution
When you are done with a successful loan application submission with all needed documents, an executive from the lending company will process that application. The lender will study thoroughly and the executive might visit you personally. If they find you eligible for the business loan, the loan application will be approved and disbursed within a few days. If the eligibility criteria don’t match, you will get an application rejection message from the lender with the precise reason.
The Bottom Lines
There are a number of online lending firms and NBFCs in India who provide collateral-free business loans to MSMEs in India at the lowest interest rates, basic eligibility criteria, and minimal documentation. And Indifi is one such alternative lender that offers such unsecured business loans. So, in case you follow the aforementioned step-by-step guide while applying for an unsecured business loan, it can be advantageous for developing your small business.