Benefits of Availing Unsecured Business Loans from NBFCs
Be it an SME or a startup, daily operations and development of any firm require substantial funds. Maintaining liquidity has always been a concern for entrepreneurs at different stages. Expenses like purchasing machinery, paying salary to employees, upgrading production, etc. again require regular inflow of capital.
In such a situation, borrowers usually have to turn to financial institutions that mandate the submission of collateral for fund disbursal. Alternatively, business owners can turn to NBFCs that offer unsecured business loans against minimum documentation and eligibility.
Moreover, the quick disbursal and low-interest rate make it apt finance for franchise during emergencies.
Features of unsecured business loan
An individual looking for reasons why business loans are financially beneficial can check the benefits explained below. This will streamline the process of a loan application and ensure the systematic management of savings and expenditure.
- Collateral free loan
Irrespective of size or vintage, a business needs capital for smooth functioning. An entrepreneur needs to invest funds on hiring new staff, restocking raw materials, or manage small spending. Usually, borrowers turn to a financial institution that mandate collateral submission against liquidity source. However, pledging collateral against a business loan removes the privilege of financial support or savings.
Hence NBFCs allow borrowers to avail unsecured business loans without submitting security. Financial institutions like Bajaj Finserv also extend pre-approved offers on selective products like business loan, credit card, personal loan, etc. that helps to expedite the loan application process. This makes the loans easily accessible. Check your pre-approved offer by entering a name and contact number.
- Substantial fund
Individuals can gain considerable fund up to Rs.45 lakh against unsecured business loans from NBFCs. This substantial amount can be utilised for big-ticket spendings like purchasing large machinery, collecting finance for franchise etc. Moreover, this loan’s repayment tenor can extend up to 84 months, which aids a borrower to repay the amount availed without burdening his/her finances.
- Unrestricted end-use
The best part about a business loan from NBFC is that it doesn’t limit borrowers’ spending. The amount availed under this product can be channeled towards meeting any number of financial requirements. This is perfect for business owners planning to expand their firm or invest in equipment.
- Minimal documentation
An unsecured business loan requires minimal documentation for processing. Since there is no requirement to hypothecate any collateral, the disbursal process is quite convenient. Ideally, the documents required for a business loan are-
Identity proof- PAN card, Aadhaar card, voter card, license, etc.
Address proof- KYC documents, ration card, lease agreement, electricity bill, certificate of trade license, passport, etc.
Financial documents- Income tax return of one year, a balance sheet of two years approved by a CA, bank statements of six months, etc. Business ownership proof- Article of Memodreum, sole proprietor’s registration document, IT return, etc.
- Easy eligibility
Availing a business loan from NBFC requires borrowers to comply with minimum eligibility parameters. An applicant has to pass certain parameters like-
He/she must be aged between 25-65 years
An applicant must own a business for at least three years.
Income tax return of an individual filed for a minimum of one year.
- Online application
Another feature of a business loan from NBFCs is the ease of application. The 21st century runs on the internet and waiting for the lengthy application procedure isn’t a mandate anymore. Lenders now allow potential borrowers to apply for commercial credit by filling online application. They need to upload the necessary documents and wait for confirmation. Ideally, the amount is disbursed within two-three working days.
For a sustainable growth of an enterprise, the regular flow of funds is crucial. In this case, availing unsecured business loans from NBFCs helps receive quick finance without the hassle of security or lengthy documents.
