3 Reasons to opt for an Unsecured Business Loan

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3 Reasons to opt for an Unsecured Business Loan
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• Any business owner, small or big, will tell
  you that all businesses need money, even if the
  reasons for it may be different. Some businesses
  may need money to get started, while others may
  require funds to stay afloat. Sometimes, your
  business may need a sudden infusion of funds to
  grow. The reasons can be many. Similarly, there
  are different avenues through which you can
  arrange for funds for your business. Reinvesting
  in your company is one, where you invest a part
  of your profits back into your business. This is
  a good way to keep your business running. A
  second way to do so is by getting investors to
  invest capital unto your venture. However, this
  means giving them a part of your business in
  return. The third (and best option) is applying
  for an unsecured business loan. A loan can help
  you start or build your business, based on your
  requirement. Here are three reasons to opt for an
  unsecured business loan

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1. You Dont Need Collateral

• As a borrowing option, an unsecured business
  loan is less risky because theres no need to
  provide any security for the loan. So, in case
  you fail to repay the loan in the future, theres
  no danger of the lender seizing any of your
  assets. This is a great advantage for first-time
  entrepreneurs (especially start-ups) because they
  will mostly have no such assets to speak of.
  Their focus will be to get their idea off the
  ground and get it funded. Another advantage of an
  unsecured business loan is that if you exhibit
  good repayment behaviour, your chances of getting
  a top-up loan in the future increases. You just
  need to show some timely EMI repayments to be
  considered.

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2. You Can Build Credit History

• If youre borrowing a loan for the first
  time, taking out an unsecured business loan is a
  great way to build a credit history. You may
  require funds for various business reasons.
  Lenders are usually wary to give out loans to
  borrowers with no credit history because theres
  no way to predict how good (or bad) theyll be
  with their loan payments. Any lender gauges your
  credit history before deciding whether to
  sanction your loan or not. As a first-time
  borrower, timely repayment of your unsecured loan
  EMIs will earn you a good credit score. This will
  make you a reliable borrower in the eyes of your
  loan provider.

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3. You Can Make Use of Opportunities

• Lets say that your business is stable,
  running smoothly, and you dont have any present
  need for an unsecured business loan. A week
  later, an exciting opportunity for expansion
  comes your way, or maybe your supplier gives a
  limited time offer to buy equipment at a
  discount. You cannot let these opportunities pass
  you by just because you dont have money. If an
  unsecured business loan enables you to make use
  of such opportunities, its a good idea for you
  to do so. Ultimately, in the long run, you will
  realize that the cost of the loan is outweighed
  by the gains youve made through such
  opportunities

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In Conclusion

• As illustrated in the above article, there
  are many benefits of opting for an unsecured
  business loan. Such a loan is apt if your
  business is experiencing a slump, and you need a
  short-term infusion of cash to keep business
  operations running smoothly. The repayment terms
  are also flexible, with some lenders allowing you
  to start repayment when you can.

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