The Basics To Guide You Through Unsecured Business Loans

by Bank-loan Depot Bank-loan Depot

Maybe you are seeking an unsecured loan for your start-up, but do you have a clear idea of what it is and how it functions? This is a funding type in which the applicants don't need to provide any collateral to the lender or bank. Such loans are offered based on several factors such as the financial condition of the applicant, monthly income, credit score, etc. If you are planning to start a new business or managing the flow of an existing one, you can apply for unsecured business funding without submitting any security or collateral.

The interest rate of unsecured business loans provided by leading banks begins at 14.99 percent per year. However, it varies from lender to lender, depending upon aspects like the profile and business needs of an applicant. There are certainly other factors that impact the interest rate of an Unsecured business funding including the applicant's financial record, repayment capability, credit score, annual turnover, creditworthiness, etc.

Reasons for Seeking Unsecured Business Loans

People may apply for these loans to start a new business venture, expand or maintaining an existing business, or for any type of business requirement. An Unsecured business loan adds fresh capital to your business, helping you realize the true potential of your company.

Unsecured Loan Types

The unsecured loans that are availed for a particular time duration and require to be paid back in form of EMIs within that defined time frame are known as term loans.

Working capital loans help you fulfill the day-to-day expenses of your business and are sanctioned depending on your creditworthiness as well as repayment capacity.

Lenders assign overdraft which is a credit limit, availed in chunks defined by the financial institution. The rate of interest is charged only on the availed or used amount from the sanctioned credit limit.

MFIs (Micro Finance Institutions) offer microloans to fulfill your instant cash requirement. The amount offered is based on the requirement of your business.

Are You Eligible to Apply for an Unsecured Business Loan?

· The age limit is a minimum 18 (at the time of applying) and a maximum 65 (at the time of maturity)

· You must have a good CIBIL score

· Your business needs to exist at least for 1 year with evidence of profit; running from a similar location for the last one year

· You should have two years of business expertise in the field for which you are applying

Note

There is no need for collateral while applying for an unsecured business loan. Such loans are sanctioned based on your creditworthiness and repayment ability. If you are looking for Supreme lending, you must research thoroughly and get acquainted with the pros and cons it offers.