If you need a business loan but don’t want to put up any collateral, an unsecured business loan could be just what you need. Unsecured business funding is a wonderful funding alternative for companies that don’t have many assets, don’t have any security or collateral to provide, or are growing quickly and need funding soon. With a range of lenders on the market, you may choose an amount needed for your business and an unsecured business loan with varied terms.
Eligibility criteria for an unsecured business loan
Some of the eligibility criteria are listed below to ensure you don’t run into any problems or have troubles throughout the loan processing and acquire business loan rapid approval:
Criteria for Age: Minimum age of 18 at the time of loan application and maximum age of 65 at the time of loan maturity
Credit score: 750 or higher
Business history: at least one year with indicators of profit; operating from the same place for the previous year
Salary requirement: The applicant must have a steady source of income and salary stubs.
Bank information: Bank statement from the last six months
Documents required to apply for an unsecured business loan
The following documents must be submitted with your business Loan application:
- PAN Card is required for individuals/companies/firm
- Identity proof: Any one of the following documents
- Aadhaar Card
- Passport
- Voter’s ID Card
- PAN Card
- Driving License
- Address proof: Any one of the following documents:
- Aadhaar Card
- Passport
- Voter’s ID Card
- Driving License
- Bank statement for the last six months
- Provide the most recent ITR together with income, balance sheet, and profit and loss account computations for the past two years after it is CA certified and audited.
- ITR/Trade license/Establishment/Sales Tax Certificate as proof of continuation
- Other additional documents you may b to provide are a certified copy of the partnership deed, a certified true copy of the memorandum & articles of association (certified by the Director) & original company of board resolution.
Features of unsecured business loan
Different banks offer various unsecured business funding products that have different requirements and features. Here are some common characteristics of these loans:
- Unsecured business loans are available with no collateral or security.
- The applicant’s creditworthiness, payback history and other factors play a vital part in the approval of the unsecured business loan application.
- In most circumstances, the business must be profitable for at least two years.
- You can opt to take a loan from Rs. 10,000 to Rs. 1 crore, depending on the size and needs of the firm.
- Tenure is generally flexible, ranging from one to five years or more giving you more time to pay.
Steps to apply for a business loan
Follow the steps mentioned below to apply for an unsecured business loan:
- To apply for a business loan, you can research and compare several lending options that meet your needs. Choose the lender that offers you a product that suits you best and visit their official site.
- Fill out all of the essential fields, including loan amount, job status, annual gross sales or turnover, city of residence, years in present business, collateral type, and mobile number.
- You may have to provide additional information like company type, nature of business, industry type, gross annual profit, bank account, and any current EMI.
- After you have submitted all of the necessary information, a bank or lender you choose will contact you to begin the loan process.
- Once your loan application is approved, the approved loan amount will be disbursed to the specified bank account within a certain number of working days.
If you need a business loan but don’t want to put up any collateral, an unsecured business loan could be just what you need. In unsecured business funding, you don’t have to provide collateral or security to obtain funding for your business. Various banks/NBFCs offer interest rates based on the applicant’s creditworthiness, financial stability, credit history, repayment potential, business tenure, and a variety of other variables.
