With COVID-19 restrictions changing daily, every business person is under great deal of stress by disruptions in supply, lower cash flows and increasing overhead costs. Nowadays, many lenders are offering secured and unsecured business loans to keep your business healthy as well as help you to provide the customers, a quality services and products. Being a new business person, when you don’t have much of assets to pledge for loan, you can also “Apply For Business Loan“ without collateral.

Yes, such loans are called unsecured business loans especially for those who don’t have any assets to offer as collateral. It could be great if your firm is growing and you require funding to cover new costs. Collateral is a main difference between secured and unsecured business loan which have a great impact on loan terms which we will discuss in detail.

→ Loan Amount: As there is no requirement of security, the loan amounts sanctioned by lenders are small for unsecured business loans as there is more risk involved to default on payments where as secured loans will generate you a desired loan quantum.

→ Loan Tenure: Unsecured loans are always offered for a short tenure as compared to secured business loans. As there is more risk involved for lender to recover the loan money but if your repay the loan as per predetermined EMI schedule, you can secure other loan for longer tenure easily because of your trustworthy business.

→ Interest rate: Most of the lenders charge higher interest rate for an unsecured business loan than a secured one. Providing a lender with no security makes you more vulnerable to loss in case of default, for which they charge high rates to compensate for that.

There are some advantages linked to unsecured business loans which are mentioned below:

→ No collateral: A secured business loan always demands for some form of collateral but in unsecured loan, one does not require collateral. It means even if you default in case of such loan, one does not risk losing any security to the lender.

→ A chance to grow: If you don’t have any asset to provide a lender, it should prove as a barrier for your business. Therefore, unsecured business loans are great way to build a good credit score as well as these loans have shorter tenure, one can borrow small quantum, repay them quick and can secure another business loan qualifying you with larger loan amounts.

→ Quick processing: The loan processing and disbursal time for unsecured business loan is less as lender does not have to spend time in verifying the value and legitimacy of the asset you offer them. These business loans generally require minimal documentation which reduces its processing time. If you have a good credit history, strong business plan and business documents in hands, you can easily process a business loan within few days.

If you want to “Apply For Business Loan Online“ or offline, start your unsecured business loan application with ShubhBank today. You will experience a zero hassle and zero hidden charges on our business loans.

Securing a loan for your business is not an easy task but when the much needed funds are disbursed to you, you are able to recruit new employees, get your old machinery repaired, and purchase new equipment to keep your business operations running efficiently. However your journey while you “Apply For Business Loan“ is not easy as a walk in the park as it involves few hurdles but you can tide over them with a bit of guidance.

In this article, we will guide you about some of the obstacles that may come across while availing a business loan which are listed below:

Unable to meet collateral requirement: A business loan is a secured type of loan where most of the lenders ask for collateral against loan money. This is one of the major roadblocks in taking business loan especially for micro scale businesses as they don’t have much security to pledge. So, it is better to find a lender who offers collateral free loan where you can secure the funds without putting your assets on the line.

Unsuitable credit score: A credit score is one of the key factors to get through eligibility criteria that lenders will check to determine your creditworthiness and repayment capability. Thus, without a good credit score, lender may reject your loan application. This issue is common amongst small scale businesses and new enterprises as they have very little or no credit history. One cannot build a good CIBIL overnight, so layout a robust business strategy to convince the lender about your repayment ability.

Inconsistent cash flow: Every lender favors the loan applicants with a constant cash flow because it reflects your business health whereas lenders view uncertain cash cycles or inconstant revenue streams poorly. Therefore, try to optimize your cash flow before taking a business loan. It is advisable to keep your financial records and income statements duly updated to maintain a spotless profile. You can approach ShubhBank to “Apply For Business Loan Online“ or offline that requires a decent credit score.

Existing debt: If you have a pre-existing loan, lenders may not review your loan application positively. This is very common scenario for any enterprises with pre-existing loan as it reflects a high debt-to-income ratio which is a comparison of your total monthly installments to your total monthly income. There is not particular DTI ratio but the lower it is, the better it is. Make sure to pay back your existing loans timely which help you to build your credit score to enhance your loan eligibility.

If you really want to avoid such hurdles and quickly want your business loan to get approved for your requirements then avail a business financing from ShubhBank. We provide both secured and unsecured type of business loan solutions at competitive rates of interest, minimal documentation and flexible repayment period for maximum convenience. You can also use the loan EMI calculator to check your repayment potential. Visit us for business loan as it can be the key to the growth of your company.

We “Offer the Business Loan” to owners to enable them to run their units efficiently, successfully and is characterised by various incentives aimed at reducing their expenditure. This loan is provided for catering the various business requirement such as working capital requirement, purchase of industrial equipment, start ups, up gradation of technology and establishment of new buildings among many others.The determinant which will play a key role in acquiring a loan is robust business plan. We need to be convinced that the business proposition is sound in terms of financial viability. You can apply this loan through our website and our skilled professionals with help you to continue your work with customised loan scheme offering major benefits.