Being a small business owner is one of the greatest feelings in the world. Having left the confines of a job and lastly getting to do the things the method you like is exciting for anybody. You are no longer answerable to anyone and are lastly your own master.
This sensation of having the entire profits for yourself is what saves you motivated to work hard and put in additional hours without ever feeling tired. But you know all also well that the picture is not as rosy as it seems.
With great power comes better responsibility, you can no longer pass the buck to your subordinates or colleagues for something not being done correct.
You are responsible for all you or your employees do and have to bear the consequences of it as well. Moreover, it is your responsibility to ensure adequate liquidity in the business, so that the operations can save on running smoothly.
Whenever you face a liquidity crunch, for whatever reason it might be, it is up to you to arrange funds and save things moving. Otherwise, you might lose your competitive advantage over your competitors.
In such a situation when your payments have been delayed or there are specific urgent expenses coming up, availing a collateral free business loan is what you want.
This facility is offered by various financial institutions in India for business owners, where they get access to a confident amount for their business-related supplies and can repay the business loan it in easy monthly EMIs, without stressing the finances.
Advantages of Collateral-free Business Loan
If you are comprehending availing an unsecured business loan but are not intelligent to make up your mind, then reading the following advantages will certainly alteration your mind:
- No Collateral: There is no want to offer a collateral for an unsecured business loan in India, making it ideal for conference urgent requirements without much documentation.
- Extended Repayment Tenor: Collateral allowed business loans have a repayment tenor of up to 24 months, which assures that the EMIs stay within manageable levels for you.
- Flexibility: You are allowed to use the business loanamount for any business-related requirement that you might have. Moreover, there is no want to inform the lender regarding the final usage of the money.
- High Value Loans: The maximum amount available as unsecured loanscan go beyond Rs. 5 Lakhs, dependent on your credit profile. This kinds them ideal for a variety of conditions.
- Quick processing: When applied online, business loan applications are processed on a priority In greatest cases, the process is completed within a rare working days.
Factors to Consider While Comparing Business Loans
With the rapid integration of technology in the financial services segment, you can now easily compare altered types of business loans.
But it is very important to know about the factors that you requirement focus on while comparing loan to make sure that you select only the greatest small business loan for yourself. Here are the most significant factors that you need to consider:
- APR: APR stands for Annual Percentage Ratewhich means the annual charge of a loan. This is a much accurate measure of the charge of a loan as compared to business loan interest rates. Sometimes a specific lender with a higher interest rate strength have lower APR compared to one having a lower interest rate but advanced APR. You requirement choose the one with lower APR as it would reduce your annual payments towards the loan account.
- Terms and Conditions: Permanently make it a point to read through the fine print of the loan contract before signing on the dotted line. If you find any doubtful points, make sure that you seek clarification for the similar.
- Foreclosure Charges: Usually, you would try to foreclose the business loan as soon as you can because it would save you a lot of money on the interest charge. So, pay close attention to the foreclosure charges being levied by the respective lender and remember to negotiate hard to decrease them. There are some NBFCs that levy no foreclosure penalties.
- Repayment Tenor: You must select the repayment tenor according to the EMIs you can pay. Your motive should be to pay the loan at the earliest. Make sure that you select the shortest repayment tenor possible.
- Credit Score Requirements: If you have your CIBIL score with you, then you need compare it with the business loan eligibility criterion identified by the respective lender. Proceed ahead with the application one if your credit score meets their threshold.
Availing a business loan is a large financial responsibility. So make sure that you exercise due industry before you finalise a business loan product for your business.