Get Acquainted With Basic Criteria Of Unsecured Small Business Loans

You might have come across this term, unsecured small business loans. This is a type of loan provided by different banking institutions without any security or collateral. This type of loan is mainly used for helping small businesses, SMEs and startup companies to raise debt for various purposes. Some examples of such purposes are financing any new project, expansion or financing any new tool or equipment. You might come across different companies offering unsecured loans. As there is no need for collateral security, the interest rate on such loans is towards higher scale. However, you can compare between different loans first, and get in touch with the one with lower interest rates.

Features of Unsecured Loan

Apart from collateral-less service, unsecured loans have various important features. Applicants, who are looking to procure small business funding, must possess a higher credit score. In general instances, unsecured small business loans are used in the form of the term loan, which can be later repaid in smaller EMIs, but on time. The maximum amount, which can be disbursed under this loan, varies from 15 lakhs to one crore. There is a separate unsecured loan structure, meant for women only. These are some exclusive commercial loan schemes, dedicatedly for women entrepreneurs in both rural and urban areas. This approach helps women to gain access to unsecured loans and is much easier for their business.

Priority Sector Loans Now

As per the latest RBI regulation, banks are said to dedicate a particular section of the business fund to the chosen priority sector. This sector comprises of rural businesses, associated with the agricultural arena. Financial institutions are known for offering loans for any specified technology, inputs and processes, as related to agricultural business. Unsecured business loans, dedicated towards priority sector, comprise of affordable and lower interest rates. Once you have checked your name in eligibility calculator, you can always opt for this loan anytime!

Benefits for You Now

With quick turnaround time, you will receive the best loan package through unsecured loans for businesses. It even helps businesses to grow and also expand. Moreover, for easy application and relevant documentation, opt for the reputed banks or financial institutions. If you want to know more about the best names, wait no further and start working with the loan comparing companies. Within minutes, you will come across the best packages of unsecured business loans and with lowest interest rates. Here, you have the opportunity to get your eligibility calculated, too.

More About Interest Rates

In India, the interest rates of unsecured business loans are likely to stay within the range of 18% and 25%. As there is a higher perceived risk for this kind of loan, the interest rate is always towards the higher scale, when compared with other options. The tenure of an unsecured business loan in India is within 1 to 3 years of the time range. The applicant needs to be minimum 25 years of age for applying for this type of loan. Moreover, the applicants must represent any of the entities, such as partnerships, sole proprietorships or private limited companies.

Documents to be Submitted

There are some important documents, which must be presented by an individual before planning for unsecured business loans. You need to provide passport, PAN card, aadhar card or driver license documents, as a mark of age proof. Moreover, you need to present sales deed copy or electricity bill, as your address proof. Always remember that you will receive loan against property eligibility, therefore; providing accurate information and correct documents, is a must if you do not want your loan to get rejected. Additionally, you need to provide bank statements for the last 12 months, before asking for the unsecured loan.