While running a business you can have cash crunch or face shortage of working capital which can hinder the growth and functioning of your business. In such situations, traditional lenders seldom provide any financial support and ask for collateral in return for a secured business loan.
Unlike their counterparts Unsecured Business Loans may be the right choice for SME owners. They can be used to manage operational expenditure like maintenance charges, make payments to suppliers, renovate or refurbish, do marketing activities and procure raw material. The money from these loans can also be utilized towards expansion activities such as the purchase of new machinery, setting up a new outlet or leasing a larger office space.
In addition, as an SME owner, you should always be on the lookout for business opportunities which you can easily grab when you have access to quick funds. Digital lenders like Indifi offer the best unsecured business loans which come with easy & flexible repayment plans and work in cohesion with your business cycle.
There are several reasons why unsecured loans are in high demand by small businesses. So let’s have a look at them shall we:
- Help in improving financial stature:
A business opportunity can present itself at any time, and as a small venture, you must have funds readily available. When there is insufficient working capital or irregular cash flow to meet business expenses an unsecured loan may be your best bet to fight those financial crunches. They don’t carry prepayment penalties and their tenure may vary from a couple of months to a few years.
- Quick approval and easy access to funds:
Digital lenders like Indifi use sophisticated technology to develop innovative & customized loan products for small and medium ventures. Borrowers can apply for an unsecured loan online through a mobile application or the web portal. Submission of all relevant documents like bank statements, previous loan statements, tax statements, business receivables and KYC etc. takes place in digital format. Indifi makes use of advanced analytics while processing a loan application. After approval, the loan amount is disbursed into the borrower’s bank account within a few days.
- Help in fulfilling all your business requirements:
Unsecured loans are equipped with unique features which help to fulfill all your business requirements. For example “Term Loan” is beneficial for small ventures which have been operating successfully for more than 2 years. They can take loans amounting from 1 Lakhs to a few crores. The tenure of such loans may vary from a few months to 3 years.
On the other hand, supply chain funding is appropriate for ventures that cater to MNC’s. Such businesses can take more risk and earn greater revenue. These loans can be paid through monthly installments or in a lump sum amount once the payment is received from the client.
- Zero Collateral:
Zero collateral is the main reason you should get financed through an unsecured loan. They allow the borrower to get funds without putting an asset on hold as collateral. Thus, making unsecured loans the best option to get financial aid for the businesses who don’t have any collateral (like service industry, Travel, BPO etc.) or running a leased business(like Hotels, restaurants etc.).
- They are available at convenient rates:
At Indifi borrowers will get loans at very competitive rates. The cost of unsecured loan products can be further reduced when the best fit loan product is chosen by the borrower. All our products involve minimum processing fee and zero hidden charges. In addition, there is a flexible loan repayment facility for all borrowers.
- Zero prepayment fees:
If you manage to gather the loan amount you can foreclose the loan without paying prepayment fees.
Digital lenders like Indifi have certainly simplified the process of procuring unsecured loans for small businesses in India. These loans can strengthen an SME’s financial position thereby contributing in their growth as well as expansion. And as a business owner, you must be aware of your business requirements. Also, you must analyze your funding options (i.e. reading the offer document very carefully and keeping a check on the fixed and floating interest rates as the EMI amount can fluctuate when there are changes in the rate of interest).