5 Advantages you get for Availing Unsecured Business Loans
A business loan is availed either by a businessman or an entrepreneur for reasons running the business, purchasing of equipment, scaling up, meeting overhead expenses, and paying for the bills. Business loans
are of two types secured and unsecured. Both have their shares of advantages and disadvantages.
In this blog, let’s see some of the advantages of availing unsecured business loans.
• Less time consuming: Unsecured business loan doesn’t enforce the borrower to pledge collateral and this spring out a less time-consuming process. When you avail the loan, you’re minimising the paperwork by not gaging the collateral. When a secured loan is procured, the lender first runs a market analysis of the property and then pays an amount that is 70-80% of the property’s market valuation. Finding out the property’s market value takes time. A person must physically move to the location and do the analysis, and this slows the process of availing a secured business loan or any other secured loan. Whereas, this is not the case in unsecured business loan. You’re not gaging collateral, so the time to calculate the market value of the property gets saved. Hence, availing an unsecured business loan takes less time.
• Anyone can avail it: When certain loans are secured loan, the people who have collateral can only avail those loans. Whereas, business owners and entrepreneurs who do not have collateral can also avail it. This opens the doors to many entrepreneurs and business owners to help them achieve their goals. Unsecured business loans are enabling more and more people to accomplish their goals. A little extra price in the interest is not that of concern to them as it is helping them grow.
• A credit card for your business: If your business requires you to spend money frequently in small chunks, then there is a business credit card. It fits right to your needs. You can use it as much if you make repayments. Banks understand that different businesses have different capital requirements, and hence they’ve curated business loans that will fit your bill.
• It’s like a bottomless coke: Business loans, unlike other loans, work differently. In a business loan, you can keep topping up your loan as long as you repay the EMIs without defaulting and by agreeing to the terms with the lender. Business require cash urgently and frequently, understanding this, the banks make such loans to help the borrowers most kindly. If the borrower is availing a loan from a bank, then it’s the bank’s responsibility to cater to his needs.
• Enables you to pay less: Since it is an unsecured loan and your money requirement is for one time only, then the lenders will enforce you to pay the loan early because they do not want to entertain the risk for a longer time. So, when you pay the loan amount early, you’re paying larger EMIs in shorter tenure, and by default, this results in paying less in total interest payable.
These are some of the advantages out of many a businessman or entrepreneur gets to incur while availing an unsecured business loan. Everything has its own advantages and disadvantages, but you must know to use them for your benefit.