Advantages Of Availing An Unsecured Business Loan Over A Secured Loan

With uncertain economic conditions prevailing in the market and businesses still recovering from the effects of demonetisation and implementation of GST, managing the finances of the business has become a complicated process for the owners. If you are a small business owner in Ghaziabad, then you must also be feeling the heat of this uncertainty. Whatever be the reason, any disturbance in your cash rotation cycle can have a significant impact on your business, it is thus crucial for you to keep a firm hold over your finances.

When you are in close touch with the actual financial position of your business, any shortfall or unexpected expenses won’t take you entirely by surprise. This is so because whenever your cash reserves go below the desired levels, you can look for alternate sources of finance. One of the best alternatives that you have at your disposal is taking a business loan without collateral from any of the financial institutions offering the facility of business finance in Ghaziabad.

About Unsecured Business Loans

The unsecured business loan is essentially a business loan without collateral, i.e. there is no need to offer any collateral to secure the loan amount. Usually, an insurance policy is required by the lenders to secure the loan amount. The amount obtained as a collateral-free business loan can be used for any business-related purpose, as per the discretion of the owner. The repayment of the loan amount has to be made in EMIs, which can extend up to 24 months. It is an ideal option when the requirement is for urgent expenses that have to be paid in cash, which cannot be delayed, such as utility bills, labour wages, supplier payments, etc.

To avail an unsecured loan for business finance in Ghaziabad, you can opt for the online channels, i.e. apply through the website of the lender or the online finance marketplaces. You can conveniently compare different business loan products and then apply for one which meets your requirements in the best manner. Applying for an unsecured business loan online assures you of quick processing and speedy disbursement.

Advantages of Unsecured Business Loan over Secured Business Loans

Usually, while opting for a business loan, you would have to choose between a secured business loan or an unsecured business loan. Though both these forms of business loans have their set of advantages and disadvantages, an unsecured business loan offers you numerous benefits over a secured loan. Following are some of the significant advantages of availing an unsecured loan over a secured loan:

  • No Collateral:

    The first and foremost advantage of an unsecured business loan is that there is no need to offer collateral to avail the facility. Lenders approve the application for an unsecured business loan based on your creditworthiness. This makes it an ideal option for new business owners, who have no long credit history and also do not have collateral to offer but are running a profitable venture.

  • Quick Processing:

    As there is no need to offer collateral for the loan, unsecured business loans are processed quickly. There is no need for lengthy processes, such as verification, valuation, legal and technical report of the asset to be mortgaged. The lenders will evaluate just your financials to approve the application.

  • Nil Foreclosure Charges:

    Most of the financial institutions allow you to pre-pay the loan amount without any foreclosure or prepayment charges. Thus, as and when your financial situation improves, you can repay the loan amount in its entirety without incurring any additional charges. This helps you save a significant amount of money on interest costs.

  • Flexibility:

    When you avail a secured business loan, you need to inform the lender regarding the usage of money and sometimes need their approval for the said expenses. This is not the case for unsecured loans; you can avail the loan and use it for any purpose that you require but make sure that it is used for a business-related purpose only.

  • High-value loans:

    You can avail high-value unsecured business loans for your business-related requirements. The amount available to you is linked to the strength of your financials and are independent of the value of an asset. Moreover, if your track record is right, you can easily avail of top-up loans as well.

It is clear from the above analysis that availing a collateral-free business loan offers you a high degree of flexibility and numerous advantages over a collateral business loan. Just make sure that you borrow only that much amount which you require. Otherwise, the interest burden might take a toll on your finances.

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