Business financing seems to be a strenuous and complicated affair and what rule against the backdrop are – myths. There are ample of myths surrounding business loans, especially the unsecured business loans. An unsecured business loan is intended to offer funds without requiring the need for depositing any personal or business collateral. Fortunately, these unsecured business loans are a savior. Without any need of pledging assets, borrowers can easily qualify based on their creditworthiness and history. Still, a lot of entrepreneurs have misconceptions regarding this loan type. Whether good or bad, these misconceptions can be a huge price to pay.

MYTH 1: Bank Is the Only Option for getting an unsecured Business Loan

The financial landscape has evolved dramatically over recent years. Banks are no more the sole option to avail funding. A lot of lending institutions have arrived in the market. These alternative sources serve as an effective option for availing unsecured loans at most competitive interest rates. Especially, the business owners denied for a loan from traditional banks have been benefitted by the debut of multiple financial lenders. Today, there is a lot of competition in the Indian fin-tech market. The evolution of financial institutions is providing the business enthusiasts quick and hassle-free customized unsecured loan options.

MYTH 2: They are only meant for Small Businesses

Many borrowers argue that unsecured business loans are only meant for small businesses. By availing them you can only have access to small sums of money. Resultantly, still, the larger businesses have to wait for banks to approve their funding.

Take a sigh of relief. This is not the case!!

Today, many lending platforms complying with no security funding provide access to the substantial loan amount. For example, the Loanvenue unsecured business loans range up to Rs 1 crore. Thus, even larger businesses can secure the benefits of quick funding options. Furthermore, the loan capital that one seeks to procure completely relies on the financial health of the organization. A well established and healthy business will probably be able to fetch desired funding as per its purpose to address various issues.

MYTH 3: Lesser amount lesser chances

Busting another myth-you can’t demand less when applying for unsecured business loans. This is a mistaken but widespread misconception. Opting for a business loan should not always correspond to a hefty amount. Regardless, of financing amount, whether big or small, you can apply for the unsecured business loans. Heading to a lender with a small loan amount is never a bad idea. Your requested loan amount should solely suit your specific requirements, rest you need not to worry about. Alternatively, even if you demand bigger amounts your business simply needs to have a decent track record. So, no matter, whether you own small, micro or medium scale business, with the right choice and clear view you can always fetch the appropriate funding option.

MYTH 4: Unsecured Business Loans are the same as Business cash advances

Many people tend to perceive unsecured business loans equivalent to business cash advances but in reality, they aren’t. This is one of the biggest misconceptions that rule over the mind of many business owners. A business cash advance is an advance granted on your credit card sales in return of exchanging a portion of your future monthly credit card revenue. Unlike, cash advances unsecured business loans help business owners deal with all sorts of financing issues. These may either be concerned with cash flow or inventory purchase. Thus, the cash advances are just one type, but not the same. Moreover, these no security loans have more defined criteria which are not a requirement in cash advance loans.

MYTH 5: Interest is the only crucial aspect

The interest rate is one of the most hyped-up loan factors in India. It is good to find ways to save money but when considering unsecured business loans it is not always wise. There is no denying to the fact that interest rate is important but it is not only the deciding factor.

What if you get lower interest rates but not the desired amount? And what if you are levied hidden charges in name of lower interest rates? Both of the situations may be annoying. So, it is better to take a holistic view of all loan terms.

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