While starting a business is a dream come true for innumerable people, running it successfully and sustaining it in the dynamic, challenging, and competitive business environment is not an easy task. The backbone of any business is a steady flow of funds for routine and unforeseen expenditures. Inadequate working capital can hinder the growth of an enterprise and severely affect its profitability.
Business owners often think of getting funds from traditional lending institutions, but these ask for collateral as a guarantee against the loan they provide. Business owners may have to pledge a valuable asset as security to the lender in such cases. It may not be possible for a business already struggling with a lack of capital. A better alternative to such traditional loans is unsecured business loans.
Unsecured business loans are loans that business owners can take for routine expenses of running the business like purchasing raw materials, vendor payments, giving salaries, etc. As the name suggests, unsecured business loans do not require security from the borrower and are collateral-free. These loans facilitate smooth operations for a business and help in its sustainability.
Moreover, the business loan documents required for these loans are minimal. Here are the top reasons why unsecured business loans are becoming popular in India.
Why Unsecured Business Loans are Becoming Popular in India
- Help deal with temporary market disruptions: A business may have to face temporary disruptions in the market. Sudden changes in the business environment may cause financial instability for a business. Unsecured business loans come to the rescue of business owners in such cases. They offer financial stability to business owners in turbulent times and help them maintain business expenses till the market becomes stable again.
- Faster approvals and quicker disbursements: Unsecured business loans are specially designed for small and medium businesses which may have urgent need of funds. Therefore, these loans come with quick approvals and disbursements as against traditional loans that may take days to get approved. Leading lenders like Fullerton India offer unsecured business loans for easy eligibility criteria and minimum business loan documents that may be disbursed in as less as 24 hours.
- Convenient repayment options: Small and medium businesses manage their cash flows through regular vendor payments and cash receipts from clients. There is a high probability that such businesses get their invoice payments only by the second or third week of a month. On the other hand, the EMI schedule of traditional loans is such that the borrower needs to make payments at the start of the month itself. It may cause a mismatch for the business between its cash receipts and EMI payments.
To save businessmen from this trouble, unsecured business loans come with flexible repayment options where the EMIs are scheduled keeping in mind the convenience of the business owner. Fullerton India offers unsecured business loans with flexible repayment options. You can choose loan tenure of up to 48 months and even opt to close your loan early without having to pay any extra charges.
- Customer-friendly loan terms: The terms and provisions of a business loan are customer-friendly. They offer several features to customers that make taking a loan a hassle-free and easy option for business owners. Some prominent features of a business loan are low processing fees, zero foreclosure charges, low-interest rates, easy documentation, auto-renewal of loan on repayment, and quick loan disbursement.
- Sufficient loan and top-up loan amount: Small and medium businesses may have a reasonable turnover. The financial requirement of such businesses is large and therefore they need a loan of a sufficient amount to cover their immediate cash needs. Business loans offer a sufficient loan amount to meet the requirements of businesses. Fullerton India offers business loans of up to Rs. fifty lakhs to small and medium enterprises and high top-up loan amounts at competitive interest rates and flexible repayment options.
Small and medium businesses are struggling hard to stay in business and become profitable after the worldwide lockdowns due to the pandemic. Business loans from reliable lenders like Fullerton India offer a financial cushion to such businesses and provide them with the much-needed monetary support to carry out their daily operations.