Unsecured Business Loans
Continuous flow of finance is the life line of any successful business organization. Unsecured business loan is a great way to strengthen your cash flow. Unsecured Business Loan is a loan without security giving you access to credit that can be paid back over an agreed time along with the interest by way of EMI’s. It is short term finance available at a critical time for the company’s immediate needs. The tenure of loans is usually around 3 years and can also be given for a year.
Types of Unsecured Loans for Businessesr
- Term Loan : Any loan whether it is secured or unsecured that is availed for a specific time duration and needs to be repaid in form of EMIs within defined time frame.
- Working Capital Loan : Working capital loan can be availed to meet the day-to-day expenses of business and is approved based on the creditworthiness and repayment capacity of the applicant.
- Overdraft : Overdraft is a type of loan or credit limit assigned by the lender which can be availed in parts defined by the financial institution. The interest rate is charged only on the used or availed amount from the assigned or sanctioned credit limit.
- Loans under Government schemes : There are several Government initiated loan schemes under which small business owners can avail business loans at comparatively lower rate of interest. These schemes include Mudra loan, Stand-up India, Start-up Scheme, Prime Minister Employment Generation Program (PMEGP), Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE), SIDBI’s Loans in 59 minutes, etc.
- Merchant Cash Advance : It is a type of cash advance that is based upon the credit card sales deposited in a merchant’s account. Loan amount is decided upon the credit card swipes or monthly volume of the business
- Micro Loans : Micro loans are generally offered by Micro Finance Institutions (MFIs) to meet the instance cash requirement of the borrower. The loan amount offered under Micro lending ranges between Rs. 5,000 - Rs. 2 lakh or more depending upon business requirements.
- Business Credit Cards : Entrepreneurs can also take business loans against their business credit cards. The loan amount is basically credit line(s) sanctioned by the lender to meet the working capital requirements of a business.
- Additional Unsecured Loans include : Personal Loan , Education Loan, Loans on Credit Cards, etc.