In light of the massive amount of finance that the MSME sector demands, Banks and Non-Banking Finance Institutions (NBFCs), alongside governmental interventions have pushed for the development of Unsecured Business Loans.
Source: MSME AR 16-17, Bank and NBFC ARs, SIDBI, RBI, NABARD, Primary Research, Intellecap Analysis
An unsecured business loan provides budding entrepreneurs and MSME owners with working capital that can be used for various purposes such as:
Buying, renting or repairing machinery and professional equipment
Stocking up on inventory
Hiring seasonal workers
Purchasing raw material for big orders
Thus, they are incredibly useful for those in need of funding for launching or expanding their business.
Document requirements for unsecured business loans differ from lender to lender. However the following are the most common requirements:
Identity proof and address proof of the applicant (Aadhar card/ Passport/ Driving License)
Permanent Account Number ( PAN) Card
Business registration Proofth
Bank statements of the past 6 months/ salary slips of the past 3 months
The applicant should be an Indian citizen
The applicant should have a good credit score
The applicant should be between 26-66 years of age.
The applicant must have a business vintage of 3 years
The applicant should be self-employed.
Following is a list of Business Loan interest rates and charges charged by lenders for unsecured loans:
Interest Rate: An interest rate is the percentage of money charged by the lender for lending you its money. It usually varies depending on the loan amount, tenure, and the borrower’s history of repayment and credit.
Processing Fees: This is a fee which is charged by the lender to cover the expenses incurred during the loan process.
Convenience fees: These are the fees charged by lenders which is paid to digital payment companies for transactions.
Bounce Charges: Bounce charges refer to the penalty applied in case the payment cheque bounces.
Penal Interest: It refers to the penalty applied on the loan EMI if it is not paid on time. It is usually around 2% of the overdue EMI.
Choose a Lender: Factoring in all charges and interest rates, find a suitable lender.
Check the Eligibility Criteria: Visit the website of the chosen lender and check the eligibility criteria of the lender for an unsecured business loan.
Check your Credit Score: Check your credit score online and match any discrepancies in the report. You can check your credit score on Finserv MARKETS website for free. An ideal credit score should be more than 650 to receive an unsecured business loan.
Collect all Documents: Compile and upload all the necessary documents required by the chosen lender.
Proceed with the Online Application: Fill in your business details accurately and honestly so that your loan application does not get rejected.
If you are looking for fast and hassle free business loans, then look no further than the unsecured business loans on Finserv MARKETS. The unsecured business loans available on Finserv MARKETS are processed quickly and disbursed within 24 hours. They also come with a flexible repayment plan customised according to your needs, as well as an online portal that greatly eases the management of your loans.