Are Unsecured Loans The Safest Choice For A Growing Business?

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Are Unsecured Loans The Safest Choice For A
Growing Business?
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Unsecured loans can be the best option when a
business owner thinks of raising short-term
finance. One of its important selling points is
the safety offered by the unsecured loans, i.e.
no collateral requirement. The business owner is
not required to pledge an asset when applying for
unsecured loans. The elimination of the security
for the loans makes this type of loan product
more accessible by the small business
owners. The advent of NBFCs has made the credit
facility accessible by all SMEs. NBFCs or new-age
lenders use the internet to make the loan
application approval and disbursal process
faster. For example, if a business owner applies
for a business loan with ZipLoan, he gets the
funds within 3 days. Now, lets take a look at
how a business loan without security helps in
business growth.
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No Collateral Required Small businesses lack
collateral or security. They generally do not
have valuable assets (business and personal) to
offer as security to the lender. This stops them
from availing business loans from the lender.
However, as said earlier, there is no need for
collateral to avail unsecured loans. Offering
security is not the eligibility for loans.
Instead, business plans, market opportunities,
etc. are reviewed by the lender. Operational
Success A business loan would help in purchasing
raw materials and other items that are required
for operations. Furthermore, business funding can
also be used to pay wages or salaries, and clear
immediate expenses and bills. A loan for business
is helpful in efficient working capital
management and meeting unexpected operational
costs. Loan Ticket Size The loan amount is not
tied to the value of the collateral hypothecated.
Thus, the loan ticket size is dynamic and can be
customized. The borrower can avail a loan of
amount starting from Rs. 1 lakh to Rs. 5 lakh for
NBFCs.
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Repayment Tenure The other plus of availing
business loans without collateral is the flexible
repayment tenure. This means the borrower not
only gets the funds quickly but he can also repay
them faster. The general loan repayment tenure
options offered by most lenders is 12 months, 18
months, and 24 months. Serve Different Business
Purposes Unsecured loans are generally offered
for a shorter time duration. The loan amount can
be used for a number of business activities, such
as marketing activities, boosting working
capital, and business investment. The business
owner can use funds as per his discretion but
only for business purpose.
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https//ziploan.in/