How to choose the Best Unsecured loans for your business?

1. How to choose the Best Unsecured loans for your business? Unsecured business loans, also referred as collateral free business loans, are the loans offered by the banks and financial institutions without hypothecating any assets like property, stock, shares, policy etc. There are only three criteria considered by banks to assess the unsecured loan proposal 1) Stability of the business : Many Financial Institutions need business running for at least 2 years to be eligible for unsecured business loan. Some need three years of business stability. 2) Repaying capacity of the borrower : It is derived by accessing various financial documents of the borrower like balance sheets, audit reports, Bank statements, GST Returns, existing loan obligations etc. Depending upon these documents, banks have multiple loan eligibility criteria and fit the customer's loan requirement in the best suitable product they have. 3) Intention of the borrower : This is one of the most important aspects considered by banks to sanction unsecured business loans. Customers having good repaying capacity may not have good intention to repay the loan. The intention of the borrower is the willingness to repay the loan on time. This Willingness is examined by the banks by assessing the previous loan r epayment track of the borrower. This can also be examined through CIBIL report sof a customer. In India, there are more than 40 plus banks and Financial Institutions, offering online business loans to business borrowers meeting criteria. The loan amount they offer varies from Rs.50,000 to 1Crore, loan repayment tenure varies from 6 months to 4 years, interest rates vary from 15% to 28%, time required to sanction varies from 2 days to 10 days, application process also varies between Online and offline. Each bank and financial institution have at least 2 to 3 www.smefundings.com

2. loan assessment criteria, which can go up to 6 to 7 . Amongst so many different criteria with multiple lenders, it becomes difficult for the business owner to choose the best suitable lender with the best unsecured loan for his business. Following points will help you to choose the best suitable bank and the best unsecured business loans in the market for you : •Finalize the tentative loan amount you are looking to borrow and for what purpose you will need these funds. •Shortlist lenders which offer the unsecured business loans in the range of your required •loan. For example, if you need a loan of Rs. 20 lacs, you need to skip lenders which offer a maximum business loan of Rs. 5 lacs. •Check out that you are meeting business stability criteria prescribed by shortlisted lenders for unsecured business loans, as mentioned above. •Check out that you meet the business turnover criteria, Profitability criteria & in turn the loan eligibility criteria for your shortlisted lenders. For most of the lenders offering unsecured business Loans above 10 lacs, minimum turnover required is Rs.70 lacs for Manufacturing & Trading business & Rs. 50 lacs for services related business. •It is advisable to check your CIBIL score yourself before applying to any lender for collateral free business loans. It will help you to further shortlist the lenders which accept your score. Cibil Scrore above 650 is considered as the minimum required for unsecured business loans. •Interest rates will play an important role in deciding the best unsecured loan for you. •However, it should not be the only criteria to select the best unsecured loan. The lender which offers the lowest interest rate should also offer the required loan amount with acceptable terms. •Apart from Interest rates, you will also need to study other charges like one time Processing Fees, Insurance charges, legal charges, any advance interest, any advance EMI etc charged by your shortlisted lenders. •Time required to sanction is something to keep track of. It may vary from 2 days to 10 days after submitting all required documents. Overall you need to compare the deal as a whole and not only sanctioned loan amount, interest rates or other charges. So the best unsecured loan for your business will be the loan which will fulfill your finance needs in time with the best possible terms. At SMEFundings, all the above efforts to find the best business loan deal is borne by our team of experts, by analysing your requirement, assessing your financials and suggesting the best deal available for you. You just need to fill in your loan requirement on : https://www.smefundings.com/Unsecured-Business- Loan-upto-Rs-2-Crores www.smefundings.com