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What is an Unsecured Business Loan?

The growth and sustainability of a business depends on the continuous inflow of funds. The funds might be required to expand the business or purchasing equipment. The funds can be borrowed in the form of a loan from banks and other financial institutions. Business Loans are typically unsecured in nature which means no collateral or security is required to borrow a loan. Business Loan is a debt provided to the company or the self-employed professionals or business owners that are to be repaid along with the principal amount. The rate of interest is usually pre-determined by the lending institutions. A Business Loan in India is offered at competitive interest rates, with a low processing fee, and without any security or collateral. Several leading banks and NBFCs including HDFC Bank, ICICI Bank, Capital First, Citibank, Fullerton India, Tata Capital, and so forth are offering business loans.

Key Facts About Unsecured Business Loan

A Business Loan can be better understood with the help of the table below:

Business Loan Interest Rate	Competitive interest rate starting at 12.15%
Loan Amount	� Minimum 3 Lakhs Maximum 1 Crore
Nature of Business Loan	Unsecured (No mortgage required)
Loan Tenure	Ranges from 24 months to 60 months
Processing Fee	Up to 2% of loan amount

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Types of Business Loans are explained below:

Term Loans: Term Loans could be used for business expansion or capital infusion requirement of an organization. Generally, a term loan is the loan offered for the acquisition of long-term fixed assets including land or building, machinery, and other business needs. The interest rate can be either fixed or floating and are usually have a fixed repayment schedule.

Special Business Loan Scheme for Women Entrepreneurs: Today banks are offering attractive business loan scheme for women entrepreneurs at low rates of interest. However, women entrepreneurs who have business ownership of less than 50% are not eligible for special loan schemes.

Working Capital Loans: These types of loans are offered to meet the daily operating expenses of the business. These loans can be further classified as secured and unsecured loans.

Business Loan Eligibility

There are certain important eligibility factors for Business Loan. The following factors are:

Age	� Minimum- 21 years Maximum- 65 years � � � �(Age may vary from bank to bank)
Who can apply?	� Sole Proprietorship Partnership Firm Private Limited Companies Closely Held Public Listed Companies Societies Trusts
Business Profitability	Business should be in the profitable state for at least 3 consecutive years.
Company Financials	Complete financials including Balance sheet and Profit & Loss statement for latest 2 years, Tax audit reports.
Credit Score	Good Credit Score (650 and above)

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Business Loan Key Documents

The following documents are required for taking Business Loan:

Type of� �Document	�
Identity� �Proof	� Any one of the following: Aadhaar Card PAN Card Driving License Voter ID Passport
Address� �Proof	� Any one of the following: Aadhaar Card PAN Card Driving License Voter ID Passport Bank Statement (Bank Account Passbook updated and of recent three months)
Ownership� �Proof	Proof of ownership of residential or commercial property (including parental property)
Financials	Complete financials including Income Tax Return of latest 2 years, Balance Sheet, Profit and Loss Statement, Tax audit reports, and so forth.
Other� � Documents	� Loan application form Passport Size photographs duly signed across

Why Take a Business Loan from mymoneymantra?

mymoneymantra is the leading online platform for financial services that can get you the best Business Loan deal with maximum advantages. mymoneymantra is the oldest market player with more than 28 years of experience of delighting customers. The experienced and skilled team of mymoneymantra deeply analyzes your financial requirements to get you the best loan offer in the market. The service-oriented professionals provide you support from the initial stage to the end stage of loan disbursement. The key advantage of taking a Business Loan from mymoneymantra is the support the team offers even after the loan disbursement. You can apply for the best loan deal with mymoneymantra today.��

FAQs

What are Unsecured Business Loans?

The term Business Loans is fairly generic and there is a vast spectrum of the different types of finance options that a business can access. However, in the current context, under Business Loans we are largely referring to unsecured income-based loans for self-employed individuals or companies. Unsecured business loans have no requirement for a security or collateral to be submitted and are offered purely on the current financial strength and past credit record of the borrower. Such loans can extend from 50,000 to 3 Crores and have a repayment period of 1-5 years. They are ideal for businesses looking for funds for capital expenditure, business development, expansion, short-term cash flow mismatches etc. They are not as flexible as overdrafts and other credit lines which usually support day-to-day working capital requirements but given the unsecured nature of the product, they are relatively easy to avail with simple paperwork and speedy processing. Most importantly the borrower does not need to lock in any asset or security as collateral. However, that also means that Business Loans are usually costlier than other forms of secured business finance.

How is my eligibility determined for an Unsecured Business Loan?

Your eligibility is determined after looking at the following:

Last 2-3 years business financials
Years in business and current level of business activity
Nature of the industry the business operates in and how that industry has fared in recent times
The current level of obligations of the borrower i.e. the other installments (EMIs), credit limits and other types of finance the business entity may have
The borrowers credit history

What do I need to know about the Unsecured Business Loan application process?

Determine your Loan requirement and your eligibility - This differs from lender to lender and depends on various factors like your age, income, profile, past credit performance etc.
Apply for the Loan with the lender of your choice by filling the application form of the lender and providing all requisite documents. Our team will meet you at your convenience and help you in choosing the lender best suited for your requirements, completing all documentation requirements and getting your application logged in with the lender. All this comes at NO COST to you as our partner banks pay us for our efforts in this regard.
Verification/Credit Appraisal Process - The lender will verify the information and documentation provided along with checking your credit history. The lender can also ask for additional documents.
Accept the terms and conditions of the approved business loan before proceeding to the next step.
Sign the Loan Agreement and provide repayment instructions.
Loan Offer letter - Post submission of all requisite documents and completion of the credit appraisal process, the lender sends an offer letter with details like loan amount, tenure, rate of interest and other terms and conditions.
Disbursal of Loan- Our Personal Loan specialist will assist you all the way. No need to worry, as we are just a phone call away at all times. We will be happy to hear from you even after the loan has been disbursed, if you would like any help or clarification regarding your loan.

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