With so much of information available these days, it is hard to know what to believe and what to avoid. Similarly, there are some misconceptions about unsecured business loans. We don’t know about the others but we can surely clear the misconceptions about these types of loans. But first let us understand what
unsecured business loans are.
What is Unsecured Business Loans? This loan is intended to offer funds without pledging any personal or business collateral.
To avoid these misconceptions looming over structured funding solutions let’s debunk some of the myths:
1. It is meant only for small businesses It is a common belief that you can only get an unsecured business loan if you own a small business. This means that bigger businesses would have to wait for a long time to get approvals. This is not the case anymore. There are many digital lending platforms that provide
business loans without security in no time. For example,
Hero FinCorp’s loans range from ₹5 lakhs to 25 lakhs and have a flexible tenure of up to 3 years. A lender considers the financial history of an organization before giving it the funds it seeks.
Also Read: Is my Business Eligible for an Unsecured Business Loan 2. Smaller amounts reduce the chances of getting a loan As long as your business has a decent track record, you do not have to worry about the amount you apply for. It does not matter whether it is big or small, what matters is how much you need for your business. It is a misconception that you should always apply for a huge amount to increase your chances of getting a
business loan without collateral.
3. Only banks provide unsecured business loans The financial market has evolved over the years. The emergence of various financial institutions has made it an exciting time for business enthusiasts. Business owners do not have to rely only on traditional institutions for funding anymore. There are many lending institutions in the market that provide
unsecured business loans at competitive interest rates. Many lenders also provide services that involve minimal documentation and trouble-free disbursals.
However, when you choose a lender, be sure to opt for one that is backed by a trusted name and has been in the market for a long time.
Also Read: How To Protect Yourself Against Business Loan Scams
4. It takes months to get a business loan
There are times when you apply for a business loan months before you actually need the funds. This is probably because the approval process takes months. So, it is safer to be prepared. But what would you do if you need the cash immediately? Give up on starting a business? No!
Various financial Institutions are making it easier for you to get access to funds. For instance, Hero FinCorp, a trusted digital lender, provides easy documentation processes and approvals within 48 hours for their clients. You do not have to rely on traditional institutions alone and wait for weeks (sometimes even months) just to know whether you will receive a business loan or not. These are small business loans problems that you do not have to worry about anymore. There are alternatives you can seek and benefit from. It is a new world. Make the most of it.
5. You cannot get a business loan for your start-up
It is much easier for existing businesses to get unsecured business loans since they have longer financial statements to show lenders. However, it does not mean that lenders will flat-out refuse to provide funds to new businesses. If you have the right documents and business plan in place, lenders will provide you with the funds you need to finance your business. You can also fund your business expenses with a business credit card. However, it depends from lender to lender to offer loans to start-ups.
Also Read: Loans Myths and Their Reality Explained
Conclusion
So, whether you have an existing business or you are starting a new one, you will always have enough financing options. However, make sure that you choose a brand that is a trusted one and easily verifiable. Do your homework well and there will be nothing stopping you from becoming the next success story.
