Unsecured business loans are, as the name suggests, collateral-free business loans. Unsecured business loans are the perfect solution for businesses looking for money to respond to a sudden business opportunity.

Unsecured business loans do not have a collateral or business asset as a base for the loan amount. Lenders only consider your business’s financial position and strength for your eligibility. In fact, unlike normal business loans, even the start-ups can apply for unsecured business loans.

Businesses with adequate turnover can use the unsecured business loans to expand, meet the working capital needs to serve a large order. Unsecured loans are quick to avail and require very few documents. Thus, picking up on the festive opportunities like Diwali, Holi, Eid, or New Year is easier with an unsecured loan.

Additionally, if your business is new and is yet to build a credit history, unsecured loans can help you do exactly that. Relatively new businesses and start-ups can avail unsecured business loans to meet their sudden financial needs, as they do not need a credit history for the same.

Unsecured business loan offered by LoanSimple can be repaid on daily adjustment basis, giving you ample opportunities to reduce the interest cost of the loan. With business loan from LoanSimple you need not worry about falling short on your fund needs. You can apply for a top-up loan if need be any time after your primary loan application has been approved.

How to apply for Unsecured Loan Online?

At LoanSimple, we understand the paucity of time and needs of small business owners. You can apply for a new business loan online following the steps given below:

  • Step 1: Check Eligibility
    (At least 1-year old business with a minimum revenue of Rs. 2 Lakh per month)
  • Step 2: Fill Up the Online form
  • Step 3: Upload the Documents as per your Loan Needs
  • Step 4: Loan Approved and Disbursed in 48 Hours
  • Step 5: Start Repayments

Documents Required for Instant Business Loan

There are two loan groups available at LoanSimple based on your funding needs:

For Loans of Rs. 10,000 to Rs. 1 Lakh
  • Identity & Address Proofs: PAN, Aadhaar & Residence Proof
  • Financial Status: 6 months bank statement
  • Business Proofs: Shop Photos & Selfie with shop signboard
For Loans of Rs. 1 Lakh to Rs. 5 Lakh
  • Identity & Address Proofs: PAN, Aadhaar & Residence Proof
  • Financial Status: 12 months bank statement
  • Business Proofs: Shop Photos & Selfie with shop signboard

Frequently Asked Questions

How to get Unsecured Business Loan in India?

You can apply for an unsecured business loan with a Bank, Non-Banking Financial Institutions (NBFCs), and other specialised entities authorised to give business loans. The banks may want to look at your previous borrowings and repayment history (credit history). Also, banks prefer to lend only to relatively older and established businesses.

These conditions, however, are not applicable to NBFCs and other business loan organisations. LoanSimple is an NBFC and offers unsecured business loans to businesses without a credit history, even if they are only one year old.

Also, most NBFCs offering unsecured business loans have online loan application and fast approval processes. For example, at LoanSimple, you can have your loan application approved and funds disbursed directly to your account within 48 hours.

Which Banks Offer Unsecured Business Loans?

Almost all national banks, whether public or private, like SBI and HDFC, offer unsecured business loans. However, large banks prefer to lend only to established businesses and may have profitability conditions for selecting eligible borrowers. Banks also seek a strong credit history before lending out money to borrowers, and the approval process may take about 15 days to a month.

If your business is relatively new and your funding needs are small, NBFCs offering online business loans will help you better. The lending process at NBFCs is much faster, and even 1-year old businesses can apply for unsecured loans.

How do Unsecured Business Loans Work?

Unsecured or collateral-free business loans are given to the businesses meeting a certain financial and eligibility criterion. For example, at LoanSimple, we can give an unsecured business loan to any business which is running for more than a year and has a turnover of more than Rs. 2 Lakh per month. The loan normally takes about 48 hours up to approval disbursement.

Once the loan is approved, you can download the app to manage the loan in the palm of your hand. If needed, you can also, apply for a top-up loan even before your earlier loan has been fully repaid.

Repayment of unsecured business loans from LoanSimple works on a daily adjustable basis. So, if you pay early your loan principal is immediately adjusted, reducing your interest for the next repayment.

When Should I Get an Unsecured Business Loan?

Unsecured business loans can help you manage sudden financial needs in your business. These needs could be related to working capital, hiring more people, capital investment, or for any other business-related purpose. In short, you can go for an unsecured business loan any time you need.

These business loans are especially helpful for new businesses, as you do not need a credit history to avail these loans. So, if you are a relatively new and fast-growing business, you should avail an unsecured loan to meet your sudden demands in business and build a credit history.

How Much Time Does It Take to get Unsecured Business Loan?

Unsecured business loans from NBFCs (non-banking financial companies) usually takes anywhere between 2-15 days. At LoanSimple, you can expect approval and disbursal of your unsecured business loan in about 48-hours.

The fast disbursal process allows unsecured business loans to help businesses in case of urgent fund needs and emergencies.

How Much Unsecured Loan is Good for My Business?

All smart borrowers ask this question for any type of borrowing, whether secured or unsecured. As with any other loan, repayment is the inevitable action that follows. Therefore, a simple equation of understanding how much you can easily repay should give you a rough idea of the maximum borrowing. You can follow a thumb-rule of 50% income for EMI while borrowing.

For example, if your average monthly surplus is Rs. 50,000, you should aim for a maximum borrowing amount where your EMIs do not exceed 50% of this amount; i.e., Rs. 25,000 per month.

Unsecured loans are usually based only on the present and past financial conditions of the person or business. The lenders can decide about the maximum loan you or your business is eligible for based only on the available financial information.

However, you should consider future financial conditions and business cycles as well for a better decision and happier financial future.

Are Unsecured Business Loans Expensive?

In case of prime unsecured bank loans, such as credit cards, personal loans, etc. the interest cost is higher than the loans backed by an asset. This may not apply when the asset is a depreciating asset.

However, the difference between the interest cost of the unsecured or secured business loan may not be high. In fact, nowadays, the rate of interest only depends on the financial conditions and performance of your business.

What is the Processing Fee for Unsecured Business Loan?

The processing cost of any loan varies between 1% to 2% of the asking amount. Some lenders may have a lower and upper limit to the processing charges.

For example, if you want to borrow Rs. 100,000 for your business, the processing charges will be Rs. 1000 + applicable GST.