As India's economy continues to grow, more and bigger businesses are entering the market. And alongside this growth comes the need for capital — to scale businesses and fund expansion plans. Banks and NBFCs have been expanding their operations to meet this growing demand — lending, especially against collateral and with longer tenures, is easier to get than ever before. Business loans remain one of the fastest-growing segments in Indian banking, according to RBI data.
The RBI’s data revealed that business lending growth hit a seven-year high in May as companies firmed up their capital expenditure plans and increased their use of working capital. Loans to micro, small, medium, and large enterprises stood at ₹31.6 trillion as on 20 May, up 8.7% from the year-ago period. On a segregated basis, MSMEs saw better growth, though on a low base. Loans to large industries grew 1.9%, compared to a 3.1% contraction in May 2021. This course will basically introduce you to all the aspects of Indian Unsecured Business Lending, also known as Business Loans.
What are Unsecured Business Loans?
An unsecured business loan is a type of loan that does not require any security to make it. For example, the term "no collateral required" means that no kind of assets like property, stocks, or shares are used as security for the loan though you may have other obligations, such as maintaining a low ratio of overdue accounts with the banks.
What are the Advantages of Unsecured Business Loans?
Saviour in an Emergency: Businesses need funds in order to continue operations, grow and achieve success. As the owner of a business, when the finances start drying up, this can be a stressful situation for you to handle. However, there is help at hand for entrepreneurs who need urgent funds – Unsecured Business Loans.
No Required Assets: Loan requests at times undergo scrutiny due to the risks associated with them. If the acceptance of new loan defaults, there are risks in terms of leaving an asset to be collateral for it. However, there is no such risk with regard to an Unsecured Business Loan as there is no outstanding debt on an individual's assets.
Quick and Easy Process: If you are looking for a business loan, you should consider unsecured loans. They are some of the most sought-after services of banks these days. Unlike regular loans, unsecured loans don’t require any collateral to be provided by you, the borrower. As a result, there are fewer formalities that need to be completed before you get your hands on the money in your bank account, making the entire process faster.