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UNSECURED LOANS FOR BUSINESS: FEATURES AND BENEFITS

by Diksha Sharma Blogger and writer

An unsecured loan is a loan that allows you to borrow money for business purposes without any collateral. And as a result of not requiring any collateral, unsecured loan applications are often assessed based on business cash flows and your creditworthiness. So, when you will apply for an unsecured loan, the financial health of your business will play a pivotal role. They are also known as quick business loans, as you can get them instantly.


Banks and other financial institutions offer unsecured loans based on the agreement that the borrower will repay on time with good interest and without any fault. The features of unsecured loans are not only confined to those mentioned above. So, let's look upon the features in detail -


ABSENCE OF COLLATERAL


Collateral is a security that the lender leverages against the borrower for repayment of a loan. In the case of unsecured loans, there is no collateral provided. In case of any default by the borrower, the lender has to write off the loan as bad debt.


HELPS TO BUILD RELATIONSHIP WITH LENDER


An unsecured loan is approved only when the lender trusts the organization and the person to whom the loan is given. Once you have paid it back, it can lead to more convenient access to finance, an even higher level of confidence, and better terms.


LOW-INTEREST RATE


Generally, unsecured loans have a high-interest rate, but few financial institutions like ftcash provide low-interest rates, which range between 1.5%-2%. Also, it depends upon the mutual agreement between the company and the person.


EASIER TO ACCESS


Unsecured loans allow businesses who face problems in meeting the bank's rigorous lending criteria. Even if you do not have a property to present as collateral, you may still be able to find funding via an unsecured loan. 



SHORT PAYMENT TERM


The instalment term for an unsecured loan is lower. They extend from 3 months to 5 years. There are no flexible terms permitted in reimbursement of the credit sum. The monthly instalment, interest rates may change every month, depending upon the outstanding balance.


Now let's look upon some of the benefits of unsecured credit -


APPLICATION PROCESS IS FAST AND SIMPLE


It is easy to apply for an unsecured loan, as no security is required. As you don't need any collateral, the lender does not have to value that collateral. You can apply for an unsecured loan online, it only takes a few minutes, and the turnaround time is a lot quicker than a secured loan. 


MULTI-PURPOSE LOAN


The unsecured loan can be utilized as a multi-purpose advance; it is also known as a business expansion loan. Usually, it might be used to tidy up other high intrigue obligations, Mastercard overdue, and so on. One can utilize it for any intention, be it a health-related crisis, wedding, travel, to purchase another gadget, and so on.


In the end, make sure when you are opting for an unsecured loan, take it from a trusted organization like ftcash as they are India's leading financial technology company that empowers micro-merchants and small businesses by bridging the lending gap with accessible loans.



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About Diksha Sharma Advanced   Blogger and writer

48 connections, 0 recommendations, 162 honor points.
Joined APSense since, November 30th, 2018, From Gurgaon, India.

Created on Oct 21st 2020 07:46. Viewed 375 times.

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