An unsecured loan does not need collateral. Instead, it is granted based on the borrower’s credit history. Small business owners are the most likely candidates for these loans.

One can also use it to provide additional capital to a company to help achieve its objectives. Though the traditional definition of unsecured business loans is that no collateral is required, the reality is quite different.

Interest Rate on Unsecured Loan

The interest rate on unsecured business loans issued by major financial institutions and NBFCs starts at 14.99% per year and goes up from there. The business loan interest rate is determined by several factors, including the applicant’s financial history, CIBIL/credit score, repayment ability, creditworthiness, annual turnover, and so on.

Unsecured Business Loans Have Many Advantages

• Easy loan process: The application process is simple, and anyone with a basic understanding of computers can complete it.
• Provides versatility: Unique Flexi-loan feature and collateral-free business give a lot of freedom.
• Very little documentation: Minimum documentation and very little paperwork required.
• Loan disbursement is quick: Due to less paperwork, the loan disbursal is faster, which helps when businesses need quick cash.
• No limits on use: Unlike secured business loans, which you can obtain after identifying the purpose, unsecured loans have no such restrictions.

An unsecured company loan could help you reach your business goals, whether you’re having cash flow problems or need a hand keeping day-to-day operations going smoothly. They can be especially beneficial to small enterprises in their early stages of development.

Must Read: Manage Your Business Expenses This Festive Season With a Business Loan