An Unsecured Business Loan provides the perfect solution for entrepreneurs needing quick access to funds without the requirement of pledging collateral. With minimal documentation and fast approval processes, this loan is ideal for meeting urgent financial needs or supporting business growth. While interest rates may be slightly higher than secured loans, they are determined by your creditworthiness, ensuring fair and tailored terms to suit your financial profile. Empower your business with a hassle-free Unsecured Business Loan and focus on achieving your goals without any asset-related constraints.
Unsecured Business Loan Features
Collateral Free
Unsecured business loans are collateral free so you don't need to pledge assets or property as security.
Quick approvals
Many lenders can provide quick approvals to help avoid delays that can negatively impact your business
Tax benefits
The interest paid on a business loan is often tax-deductible, which can reduce your overall tax burden.
Higher loan disbursal amounts
Business loans can provide the financing you need to meet your working capital needs and expenditures.
Flexible Loan Tenure
With a business loan you can choose a flexible loan tenure and repayment schedule based on the cash flow of your business.
Minimal documentation
One of the benefits of Business Loans is that you don’t need lots of paperwork to get them.
Unsecured Business Loan Eligibility Criteria
- Nationality
Applicants must be Indian citizens.
- Business ownership type
Lenders provide loans to various types of businesses like sole proprietorship, partnership firm, private limited company, public limited company, or limited liability partnership (LLP).
- Business Age and Experience
Lenders typically require a minimum operational history for your business, which can range from a few months to a year or more. Some may also look for a minimum of one year of experience in the industry.
- Annual Revenue
Lenders often set a minimum annual revenue requirement to ensure that your business has a stable income stream. This helps demonstrate the financial health of your business.
- Collateral or Security
For secured loans, lenders may require collateral in the form of real estate, equipment, inventory, or other valuable assets to secure the loan and reduce their risk.
- Cash Flow
Your business’s cash flow is a critical factor in determining your ability to repay the loan. Lenders want to see that your business generates enough cash to meet repayment obligations.
- Age Criteria
Typically, loan applicants must be at least 21 years old at the time of application and no older than 65 years at the time of loan maturity.
- Eligible Entities
Business loans are available to individuals, MSMEs, sole proprietorships, partnership firms, public and private limited companies, limited liability partnerships, and other income-generating entities in sectors like services, trading, and manufacturing.
- Business Vintage
Lenders usually require a minimum business vintage (the number of years your business has been in operation) of at least one year.
- Business Location
The business must remain at the same location for the duration of the loan.
- Annual Turnover
The minimum annual turnover required will be defined by the bank or NBFC, depending on the loan type and size.
- Credit Score Requirement
Most private and public sector banks prefer applicants with a credit score of 700 or higher.
- Additional Criteria
In addition to the above, applicants may be required to own a residence, office, shop, or godown, as part of the loan application process.
Documentation for Unsecured Business Loan
- KYC Documents / Identification / Address proof
Aadhar Card / PAN card / Electricity Bill / Passport / Voter’s Id / Electricity Bill - PAN Card
For Company/Firm/Individual
Bank Statement of last 12 months
Address proof of Business – Telephone Bill / Electricity Bill
Passport size photographs of promoters
GST registration certificate and GST returns of latest 2 years.
Udhayam Aadhaar registration certificate
Rent agreement copy of factory and residence (if property is rented)
Latest Proforma Invoice / Quotation (For equipment financing/machinery loans)
- Financial Statements
Latest ITR along with computation of income, Balance Sheet and Profit & Loss account for the previous 2 years, after being CA Certified/Audited.
Proof of business continuation of 3 years (ITR/Trade license/Establishment/Sales Tax Certificate).
Certificate of Incorporation, MOA, AOA, List of Directors, and Shareholding pattern for Pvt Ltd companies.