Owing to the remarkable integration of technology in finance, the Indian financial services sector has experienced a huge paradigm shift. Gone are the days when banks had the sole monopoly in the lending industry. The entry of private players such as Non-Banking Financial Corporations (NBFCs) in the financial sector has truly changed the face of the industry. Their customer-friendly business models and corporate culture are challenging the hegemony of public banks. One such revolutionary change is the availability of unsecured business loans through NBFCs, which is giving them an edge over their competitors and encouraging more people to lean towards NBFCs for extra benefits.
Not sure about the benefits of availing an unsecured business loan? Read on to find out why businesses should make the switch from corporate banks to consumer-friendly NBFCs.
1. No Need for Collateral
Be it a new company or an existing business set to expand its daily operations, capital is required for every business- big or small, to hire new staff, purchase heavy machinery or upgrade technology. Organisations may turn to banks to gather the funding they require. However, putting down collateral in exchange for a loan for business may take away the privilege of financial independence from loan seekers.
NBFCs, on the other hand, offer loan seekers unsecured business loans, allowing applicants to avail a business loan without collateral. Not having to give up any asset for financial credit, the borrowers not only receive financial independence but also get much more flexibility while handling their business operations.
Additional Read:- Common challenges you face while availing a business loan in India
2. No Restrictions on Credit Limit
Since secured loans require collateral, the loan amount is usually limited to a certain percentage of the value of the asset. However, business loan eligibility for an unsecured loan depends on the applicant’s credit score. This allows the loan seeker to enjoy an expandable credit limit and get a higher loan amount without putting up any collateral for hassle-free business growth.
3. Requires Minimal Documentation
Since banks require collateral, there is a long application process that requires the lender to evaluate the value of the asset. This tedious and lengthy procedure can halt businesses from expanding until they are cleared for the business loan. Unsecured loans, however, are processed and sanctioned easily to ensure zero financial hindrance for a company in growth mode.
Business loan eligibility for NBFCs requires simple documents such as ID proofs, bank statements and PAN Cards and paycheck slips for a swift and hassle-free approval. And thanks to the digital revolutions, loan seekers can apply for an unsecured business loan by filling a simple online application and uploading the necessary documents for speedy approvals. In fact, certain NBFCs disburse loan for business in as less as three days without any over-the-top formalities.
Additional Read:- Practices That Will Get You A Business Loan Faster
On the hunt for the best NBFCs in town to quickly avail an unsecured loan for business? Get in touch with Tata Capital. We possess a wide selection of loan for business such as working capital loan, machinery loan, MSME and SME loans, terms loans and overdrafts to cater to the business needs of every organisation. We offer tailored loans with flexible EMI and easy repayment options to guarantee the best service and maximum satisfaction to all our clients and help them scale new heights.