Reasons why Unsecured Business Loans have Become Popular in India
A lack of adequate working capital can hinder the daily operations of your business, threatening both short-term and long-term growth. Seeking help from a traditional lender, like a bank or financial institution, comes at a cost. These institutions seek guarantees for their money and demand a valuable asset to be put up as collateral for the money they lend. If your business is already running a risk of going into loss, putting a valuable asset hostage is not going to help your cause, and that’s where an unsecured business loan comes into the picture.
Unsecured business loans are short-term small-ticket loans that help you take care of routine expenditures, such as asset maintenance, vendor payments, and raw material purchases. The best thing about these small business loans is that these loans are offered without any collateral. Apart from using these loans for working capital management, you can also utilize the loan funds for business expansion, however, the small ticket size means these loans are best used for immediate expenses that help your business return profits.
Here are the top reasons why small business owners in India are opting for unsecured business loans from NBFCs like Lendingkart over secured business loans from banks.
Helps overcome temporary business disruptions
A small business owner faces many challenges in today’s rapidly changing marketplace. Unsecured working capital loans give confidence to a business owner facing hard times due to temporary disruptions in the market, take for example the two recent cases of demonetization and GST implementation. By the time these policy decisions were streamlined, they had already caused a lot of financial turmoil for small business owners. Unsecured small business loans played an important role in stabilizing the market by giving business owners access to funds for working capital.
Faster loan approval and quick disbursal of funds
A signature feature of unsecured business loans, offered by NBFCs like Lendingkart Finance, is that they are exclusively designed for the needs of small and medium-sized businesses. Often, a small business owner needs quick access to funds to benefit from a new opportunity or to tackle immediate financial requirements. A traditional bank loan can take up to 10 days to get approved, hence defeating the purpose. In such cases, unsecured business loans come to the rescue with their faster approval times and quick disbursal of funds. Lendingkart offers quick business loans with disbursal time as low as 72 hours.
Flexible repayment options
A small business relies on invoice clearances to maintain its cash flow and profits. If a business gets most of its invoice payments after the first or second week of a month, it may struggle to keep up with the monthly payment schedule of a secured business loan which has a due date early in the month. Unsecured loans from NBFCs like Lendingkart come with flexible EMI options, letting business owners choose an EMI schedule that is in sync with their business earnings.
Business-friendly terms and conditions
Unsecured business loans come with business-friendly terms and provisions, such as low processing fees and pre-payment charges, auto-renewal of loan amount upon repayment, and no hidden costs. Hence, making these loans attractive for small business owners looking for quick and convenient finance.
At Lendingkart Finance, we are constantly working towards providing small and medium business owners quick business loans to help them focus on growth and become profitable as soon as possible. To know more about Lendingkart business loans, visit our homepage or download the Lendingkart Instant Business Loans App from Google Play Store now.