5 Advantages Of An Unsecured Business Loan For SMEs

5 Advantages Of An Unsecured Business Loan For SMEs

SMEs are the backbone of Indian economy and generate a bulk of jobs and contribute a major percentage to the country’s GDP. However, Small businesses have always suffered because of the lack of availability of credit to small businesses as they need working capital to reach out to more clients and grow their business.

The traditional lenders have been offering business loans to small businesses. However, there are several problems to it as a result of which the small businesses do not get fully benefited. Firstly, the traditional lenders require collateral like home or office property which are mostly not available with the small businesses and secondly, there’s a long processing time needed by the traditional lenders to process the business loans, it takes weeks or even months to get a decision.

This is where Unsecured Business Loans help the small businesses as these are not based on collateral. Here are 5 key advantages of an Unsecured Business Loan for SMEs.

  1. Based on Business Transactions

The unsecured business loans for SMEs offered by digital lenders like Indifi are based on business transactions and hence there is no collateral needed to apply for these business loans. The digital lenders evaluate the loan worthiness of small businesses basis the digital trace of transactions. For retailers, these transactions could be the transactions their customers make against the card swipe machines or payment wallets and for restaurant, hotel, and restaurants the assessment is done basis their transactions with the aggregators like travel booking aggregators and so on. The digital lenders offer specialized business loan products for individual business types basis their transactions and other available public data.

  1. Flexible Repayments

Since the unsecured business loans offered by the digital lenders is based on the business transactions of the small businesses, it offers complete flexibility in repayments as the loan is closely linked to business transactions. The digital lenders also offer the repayments that are connected to the transactions which means a small business needs not to worry about the EMIs. A retail shop owner can get his repayments connected to the card swipe machine transactions and every time a transaction happens a minuscule amount gets debited against the business loan repayments, this ensures that the shop owner needs not to worry about the regular EMIs. Similarly, other businesses can get their loan repayments connected to their business transitions or may choose to repay in easy EMIs which can even be paid weekly, fortnightly or monthly.

  1. Easy Application

While a secured loan offered by the traditional lenders is a nightmare for the small businesses as they need to do multiple visits to the branch offices of the lenders and also need to arrange multiple documents which are needed by the traditional lenders. The Unsecured Business Loans, on the other hand, offer easy online business loan applications and there is no branch visit involved. Also, the entire application process is online and one needs only the basic KYC and business documents to apply for the business loans, the complete application process needs around 10 minutes with the digital lenders.

  1. Quick Decision

The Unsecured Business Loans offered by the leading digital lenders like Indifi are completely automated and minimal human interventions, the entire data gathering and scorecard generation for the underwriting purpose is automated and as a result, these digital lenders offer quick decisions on the unsecured business loans. The small businesses can get a decision on the business loan applications as quickly as within 24 hours itself. One just needs to fill basic details and upload the ball statement for the link with the aggregators to get their business loans processed.

  1. No Branch Visits

Unlike the traditional lenders, the digital lenders do not require the small businesses to pay any branch visits as the complete process of applying for unsecured business loans is online. One just needs to fill basic KYC and business details online to get a decision on they business loan application without having to visit anywhere.


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