COLLATERAL FREE BUSINESS LOAN

Now, let us discuss collateral-free business loan. Generally, a collateral free loan is referred to as an unsecured loan. In this type of loan, you are not required to offer any kind of resource or asset to the lender against the borrowed capital. Hence, such types of loans are very risky for the lenders and also have a high rate of interest as compared to other secured or collateral loans. The collateral free loans are the fastest way of getting funds for your organisation, business, or individual purpose. It is not limited to financing business requirements for an organisation only, but it also provides support in case of personal requirements as well such as, meeting the medical expenses, buying property, purchasing a car and many others. The loan taken for personal purpose comes under personal loans. rnThe financial companies provide collateral loan after analyzing your credit history and net worth. They consider multiple factors while providing funds such as credit history, age, and the source of income, total income per month, job history, job stability, and many other factors. If all the factors are considered well and good, the financial companies agreed to provide different financial services to the client such as bank credit card, and investment services. rnNow, let us discuss some of the main features of collateral free business loans which are as follows: •It provides flexible tenure ranging from 12 months to 60 months. •It provides different payment options such as Auto- debit, Electronic Clearance Service (ECS) and Post Dated Cheque (PDC). •It does not ask for security assets or resources. •It provides faster processing of funds. •It requires minimum documentation. •It provides loans up to Rs.1. crore for Micro, Small and Medium Enterprises (MSEs) as per the terms of the MSMED Act, 2006. •It provides loans for both existing and new MSEs. Some of the BASIC REQUIREMENTS to avail such collateral free loans are as follows: •Only those private limited companies which have an SME/SSI registration certificate can apply for a collateral free loan. •In the case of MSMEs or SMEs, the collateral free loan can be taken for purposes such as product development expenses, procurement of computers and tools machinery. •The clients are required to share the allotment proof at the time of application. •The clients are also required to share the purchase agreement at the time of application.