If you’re thinking about getting a loan to start or grow your business, an unsecured business loan from a Non-Banking Financial Company (NBFC) could be a smart option. Here’s why:
No need for collateral: Typically, loans require some sort of collateral or bank guarantee. However, many lenders offer unsecured loans without needing you to put up any collateral. This can be a lifeline if you need a substantial amount of cash. Plus, if your business doesn’t succeed, you won’t risk losing any personal or commercial assets.
Easier eligibility: One of the perks of getting an unsecured business loan is the less strict eligibility criteria. Most reliable NBFCs don’t require extensive paperwork when you apply. That said, you do need to have a stable income source. Generally, you’ll need to provide your financial statements from the last 6 to 12 months to show that your income is steady. They may also ask for your PAN details. If you can offer these documents and demonstrate a reliable income, your chances of securing the loan improve significantly.
Flexible repayment: Normally, loans are repaid through fixed monthly installments within a set period. However, many NBFCs offer flexible EMI schemes. This means you can pay off your loan early to save on interest or adjust the repayment period if necessary. Essentially, an unsecured loan from an NBFC gives you more room to negotiate how you pay it back. You can also use a business loan EMI calculator to figure out your payments and budget effectively.
Flexible fund use: You can use an unsecured business loan for a range of business expenses. The main conditions are that you pay your EMIs on time and use the funds strictly for business purposes. Whether you’re starting your business, expanding, purchasing equipment, or need working capital, it’s your decision how to use the funds.
Larger loan amounts: Without the need for collateral, you can request a large loan sum. Usually, the amount you’d get with collateral depends on the asset’s value. But for significant unsecured loan amounts, make sure you have a high CIBIL score (above 750) and a solid business plan.
Competition among NBFCs means they offer unsecured loans at competitive interest rates. It’s an excellent opportunity to get funding without collateral and at a low rate, giving your business the boost it needs. So if you’re aiming for that new office space or equipment, start preparing your application, compare interest rates from different lenders, and gather all the necessary documents. Check the eligibility criteria, loan terms, and any additional charges before applying for an unsecured business loan.
