Finance is required by a business enterprise at almost every stage of the business life cycle. MSMEs often find it difficult to arrange adequate finance for their operations as well as for expansion and growth
In such cases term loan can be taken for purchase of commercial assets & business expansion needs
The collateral options are flexible in terms of Residential/Commercial/Industrial property
Since collateral is guaranteed in the worst case scenario of a default, banks generally view secured loans as low risk investments and therefore charge significantly lower interest rates on purchases that are carried out through such loans.
Banks are more willing to hand out heftier sums of money
They are comparatively easier to obtain.
They are an excellent option for buying machinery or expanding your business.
Loans that are secured against some collateral have lower interest rates. Usually in the range of 12.5 - 15%.
Unsecured Business loans are collateral free loans. Lenders who offer unsecured business loans wont require your business to pledge any collateral to obtain the loan. However, you must still meet the income and credit requirements.
It is extended only on the basis of the borrowers financial position, creditworthiness, credit history, and general reputation.
A good credit rating increases the chances of a corporate to avail of unsecured loans.
They are generally taken in the form of a term loan