A business loan is essential to start a company or to expand an existing one. From purchasing new equipment to financing working capital, an unsecured business loan caters to a plethora of expenses.
Thanks to NBFCs like Bajaj Finserv, they provide a collateral-free business loan at comparatively low interest rates. Additionally, it also provides with a tailor-made pre-approved offer on business loan, personal loan, home loan, EMI product financing, and a pool of other financial services and products. It is a simple process, saving a lot of time of the applicants in availing a loan.
You can check out your pre-approved offer by sharing a few essential details on its online portal.
However, when it comes to this unsecured business loan, there arrives a set of pros and cons. So, before you opt for this financing option, learn the advantages and disadvantages once.
Advantages:
● Firstly, a business loan doesn’t need any collateral
Unlike secured loans, business loans don’t require any collateral or a guarantor. So, there is no need to pledge any asset or hypothecate for financing a business. Start-ups or even large-scale firms can avail this loan without a second thought.
In the case of loan default, there is no risk of property seizure with an unsecured business loan.
● High financing value is available
Another plus point is borrowers have the opportunity to apply for a high financing amount to meet their financial crunch. The collateral-free business loan amount is not constrained by the value of a property or asset owing to the unsecured nature.
Bajaj Finserv, a leading lending institution of India, offers a significant amount of up to Rs. 30 Lakh to their borrowers. Thus, business owners can increase and maintain a business cash flow with this collateral-free loan choice.
● Flexible borrowing and repayment option
Bajaj Finserv also proffers its lenders with Flexi Loan Facility allowing them to borrow and repay whenever necessary.
With Flexi Loan Facility, lenders need to pay interest only on the utilised amount, instead of the entire loan value. Here, the borrower also enjoys the option of paying only the interest rate as easy EMIs.
So, the flexi business loan is a new-age option providing substantial funds in real time.
● A quick turnaround time
Business loans have a faster turnaround time, since lenders don’t need to evaluate the value of any asset. A lot many NBFCs including Bajaj Finserv have further streamlined the process by a quicker disbursal within 24 hours.
Hence, availing the unsecured business loan is made easy with a faster loan approval process. Moreover, one can complete the entire procedure online with a few clicks.
● Build up one’s credit history
Going for this collateral-free business loan is a convenient way to build a good credit history. For instance, suppose a business owner of an SME is applying for the first time. Now, he can earn a good credit score at ease with timely repayments.
So, a borrower gains the trust of the lenders with good credit score making way for high financing in future.
Disadvantages:
1. Business loan interest rate is a little high
Lenders tend to charge a higher business loan interest rate since there’s no seizure of collateral in case of a default. However, some estimable NBFCs provide a competitive interest rate on taking a business loan along with other attractive perks.
2. A good credit score is necessary
In the absence of any pledged asset, lenders gauge the borrower's credit score. They will not approve an application if a business has a poor or non-existent credit score.
So, applicants need to have a good credit history before applying for the loan.
3. Documentation
Unlike a secured loan, there is no hassle of paperwork for evaluation of property in an unsecured business loan. However, one needs to provide certain documents for getting approval and failing to produce them can lead to rejection of the application.
The primary documents required are:
a. KYC documents
b. Certificate of business existence
c. Bank account statement of the prior month
d. Relevant financial documents
However, the good point is that Bajaj Finserv made this borrowing option hassle-free with their easy to qualify business loan eligibility criteria. A borrower needs to fulfil the following requirements before availing the loan:
i. One must age between 25 and 55 years.
ii. A business vintage of least 3 years.
iii. IT Returns filed for at least the previous year.
So, once you meet these requirements, go and avail the unsecured business loan to ensure success of your business.
Thanks to NBFCs like Bajaj Finserv, they provide a collateral-free business loan at comparatively low interest rates. Additionally, it also provides with a tailor-made pre-approved offer on business loan, personal loan, home loan, EMI product financing, and a pool of other financial services and products. It is a simple process, saving a lot of time of the applicants in availing a loan.
You can check out your pre-approved offer by sharing a few essential details on its online portal.
However, when it comes to this unsecured business loan, there arrives a set of pros and cons. So, before you opt for this financing option, learn the advantages and disadvantages once.
Advantages:
● Firstly, a business loan doesn’t need any collateral
Unlike secured loans, business loans don’t require any collateral or a guarantor. So, there is no need to pledge any asset or hypothecate for financing a business. Start-ups or even large-scale firms can avail this loan without a second thought.
In the case of loan default, there is no risk of property seizure with an unsecured business loan.
● High financing value is available
Another plus point is borrowers have the opportunity to apply for a high financing amount to meet their financial crunch. The collateral-free business loan amount is not constrained by the value of a property or asset owing to the unsecured nature.
Bajaj Finserv, a leading lending institution of India, offers a significant amount of up to Rs. 30 Lakh to their borrowers. Thus, business owners can increase and maintain a business cash flow with this collateral-free loan choice.
● Flexible borrowing and repayment option
Bajaj Finserv also proffers its lenders with Flexi Loan Facility allowing them to borrow and repay whenever necessary.
With Flexi Loan Facility, lenders need to pay interest only on the utilised amount, instead of the entire loan value. Here, the borrower also enjoys the option of paying only the interest rate as easy EMIs.
So, the flexi business loan is a new-age option providing substantial funds in real time.
● A quick turnaround time
Business loans have a faster turnaround time, since lenders don’t need to evaluate the value of any asset. A lot many NBFCs including Bajaj Finserv have further streamlined the process by a quicker disbursal within 24 hours.
Hence, availing the unsecured business loan is made easy with a faster loan approval process. Moreover, one can complete the entire procedure online with a few clicks.
● Build up one’s credit history
Going for this collateral-free business loan is a convenient way to build a good credit history. For instance, suppose a business owner of an SME is applying for the first time. Now, he can earn a good credit score at ease with timely repayments.
So, a borrower gains the trust of the lenders with good credit score making way for high financing in future.
Disadvantages:
1. Business loan interest rate is a little high
Lenders tend to charge a higher business loan interest rate since there’s no seizure of collateral in case of a default. However, some estimable NBFCs provide a competitive interest rate on taking a business loan along with other attractive perks.
2. A good credit score is necessary
In the absence of any pledged asset, lenders gauge the borrower's credit score. They will not approve an application if a business has a poor or non-existent credit score.
So, applicants need to have a good credit history before applying for the loan.
3. Documentation
Unlike a secured loan, there is no hassle of paperwork for evaluation of property in an unsecured business loan. However, one needs to provide certain documents for getting approval and failing to produce them can lead to rejection of the application.
The primary documents required are:
a. KYC documents
b. Certificate of business existence
c. Bank account statement of the prior month
d. Relevant financial documents
However, the good point is that Bajaj Finserv made this borrowing option hassle-free with their easy to qualify business loan eligibility criteria. A borrower needs to fulfil the following requirements before availing the loan:
i. One must age between 25 and 55 years.
ii. A business vintage of least 3 years.
iii. IT Returns filed for at least the previous year.
So, once you meet these requirements, go and avail the unsecured business loan to ensure success of your business.
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