A Guide to Choosing the Collateral Free Business Loan

Availing a loan against collaterals can be tricky at times. While mortgaging your prized possession may cause both financial and emotional dilemma, it may even push your asset to the risk of confiscation.

So, what’s the solution?

Simple! Opt for collateral free loans instead.

Precisely speaking, a collateral free business loan prevents you from putting your valuable assets on the line; and hence are unsecured. An impressive CIBIL score can provide you with your required loan amount from any reliable financial institution.

Organisations such as banks and NBFCs will not only provide you with unsecured (collateral free) loans to your small business at attractive interest rates but also with flexible repayment options, simple eligibility criteria, and fast loan disbursals!

Interested? Well, there are some factors to look out for before applying for a collateral free business loan. Here’s a brief guide to help you choose the best business loan out there.

Opt for a lender offering you flexibility–

There could be times when your business faces a cash crunch and is operating on tight liquidity, or there could be a sudden contract which requires you to make a high-value investment. In such times, having the freedom to withdraw in extra cash and repay at your convenience comes handy. With regular business loans, you often don’t get this flexibility to manage your finances as per business dynamics.

Trusted lenders like Bajaj Finserv have introduced a special offering which helps you borrow and repay your loans flexibly. This one-of-a-kind facility on your business loan helps you to withdraw as per your business capital requirements and repay as your business has idle cash. Here, you pay interest only on the amount utilised and thus, end up decreasing your EMIs by up to 45%. As interest is calculated on a daily basis, if you repay your borrowed amount on the same day, you can avoid incurring any interest on it.

What’s more?

Bajaj Finserv allows you to pay only the ‘interest’ amount as your EMI where you can choose to defer the principal payment to the completion of the loan tenor. This useful feature helps to further ease your firm’s cash flow.

So, pick a lender that lets you borrow collateral free loans in parts as and when you want and repay at ease.

Look out for extended tenor periods –

Your SME may not have the liberty to repay the loan in quick time. That’s why collateral free business loans come with flexible repayment tenor of up to 60 months allowing your venture to conveniently repay the loan.

An extended loan repayment period reduces the EMI amount considerably. So, calculate your fiscal turnovers and investments accordingly and choose a lender that gives you the facility to spread your EMIs over a longer period.

Check the rate of interest –

An affordable interest rate on business loan always aids in repayment. Compare lenders online and choose a one that offers you a good interest rate and minimal processing fee and offer you the maximum benefits.

Lenders like Bajaj Finserv offer unsecured finance for your business at as low as 18% and offer complete transparency and even skip on security fees, loan statement charges and principle statement charges.

Choose a lender that give you easy access to funds –

Secured loans are structured according to the instalment terms. When you apply for such a loan, you have to mention how much you need and for how long. The lender will then scrutinise all related documents related to the borrower and the asset being pledged. Post verification of all the documents and the valuation of the asset, the loan is sanctioned and disbursed, subjective to meeting a long list of eligibility criteria, eating up too much of your business’s time.

Collateral-free business funding entails a lesser application time and gets disbursed quickly.

NBFCs like Bajaj Finserv offer easy eligibility criteria on business loans and require you to only submit 2 documents for the loan application. Moreover, applying with them is easy as all you have to do is fill up an easy application form and once submitted, your application gets approved within 24 hours.

With pre-approved offers, they also give you the facility of instantly getting your loan approved. This useful offer can help your business tackle any cash crunch.

Collateral free business loans thus help you manage your finances, whether it is needed to buy new machinery for your factory, tools or furniture for the office or to boost your working capital.

With a plethora of exciting features on offer, you can consider opting for a reliable financial institution like Bajaj Finserv and avail special features like the flexi loan facility, pre-approved offers, flexible repayment tenors, etc.