The soundness of its financial status determines the success of a business. The business owner must arrange sufficient funds to meet the business’s various routine and unplanned expenses. To no surprise, in today’s competitive market, a business owner can get gripped into a lack of funds situation anytime. So what will you do in that case, knowing that any delay in arranging funds can adversely affect your business’s function and market value? If you were to get seized into such a situation, unsecured business loans are the only way. Probably this is what you were seeking.
These business loans are specifically designed for business persons to finance their need for capital to start up or expand their business or meet their operational requirements. Over that, the best thing about an unsecured business loan is that the borrower need not put even the collateral against the loan. Yes, you read it right! That means if you own a small business and do not have a valuable asset to pledge against the loan, or even if you have. Still, if you don’t want to put it at risk, you can opt for an unsecured business loan from a recognised financial institution and get the desired help in the least possible time. Unsecured loans are approved much faster than secured loans as they do not involve collateral. Plus, minimal documentation is required, so the funds are disbursed quickly.
Advantages of unsecured business loans
Ask a small business owner; you will get to know that unsecured loans are a godsend. Getting an unsecured business loan will be one of the best decisions you have ever made for your business. Continue reading to know-how!
It acts as positive working capital for businesses.
Every business should have adequate working capital to ensure its everyday operations smoothly. But fortunately, many companies are unable to do so due to uncertain customer payment schedules, outstanding bills, and other operational expenses. If some urgent need for funds comes in, business owners often get stuck. However, an unsecured business loan acts as a cash buffer in that case and helps you meet your daily expenses so that you can focus on your business instead of being burdened by short-term fund requirements.
It fosters your business growth.
When you plan to scale your business, launch new products/ services, hire new employees, buy new tools and equipment, or buy a whole new unit, you first need immediate funds provided by an unsecured business loan. When having an unsecured business loan, you get the confidence to grow, and you can make the best use of the growth opportunities that come your way.
It offers you the flexibility of usage.
Unlike secured loans in which you are bound to use the fund for the true purpose only, you get the flexibility of using funds with unsecured loans. Yes, you read it right! You can use the funds provided to you for any purpose. Most lenders would not even ask you what purpose you intend to use the cash for; the choice is yours!
Who is eligible for unsecured business loans?
If you are pondering whether you are eligible to apply for an unsecured loan or not, continue reading to find out the answer. You qualify for unsecured business loans if,
- Your business has been in operation for at least five years.
- You can submit documents like your profit and loss statement, balance sheets, audit reports, and tax computations for the last two years.
- You can submit your six-month bank statements in your business or the applicant’s name.
- You can submit KYC documents of your promoters/ partners/ proprietor/ key directors.
Author Name: Grace