Secured vs Unsecured business Loan: All You Need to Know
When it comes to borrowing money for business purposes, you have many options like taking from friends and relatives, keeping the gold and getting the amount, and selling your property. But, do you think these things will help you to avail money instantly and in all situations.
Well, indeed, not! In some cases, it may help and not in others. At these points, an unsecured business loan is a perfect solution. It is because the unsecured business loan does not require any collateral like a secured business loan.
Now you may be wondering what’s the critical difference between secured and unsecured business loans. Well, we’re here to explain in detail the difference between secured and unsecured loans.
Secured Business Loan
In the case of a secured business loan, borrowers will need to submit collateral as security. For instance, you can submit a property for availing of the loan. Even some lenders take company equipment as collateral. It is taken by financial service providers as collateral to be used if someone defaults on the loan.
But the case with a secured business loan is that the interest rates are comparatively lower as the banks or the financial service providers do not have much risk. When the borrower does not make accurate payments, the financial service providers can put a lien on the collateral.
If you have a low capital requirement, it is best to go with a secured loan. It is because you can avail the amount that is allowed for your property or the collateral. When borrowers default on the loan, the financial service provider can sell the collateral and get the amount. Some of the collateral accepted by financial service providers for secured loans are accounts receivable, machinery, equipment, real estate, vehicles, and inventory.
Unsecured Business Loan
Contrary to a secured business loan, a financial service provider gives an unsecured business loan without taking any borrowers’ collateral. The main feedback with the unsecured loan was that banks approve only a small amount of capital. Well, companies like OfBusiness have changed this lending model. Being one of the best financial service providers in India, OfBusiness offers loans of up to two crores.
The competition in the financial service industry has compelled companies to reduce the interest rates on loans. And most of the financial service providers give unsecured business loans for a shorter period. It means the tenure is lower in the case of an unsecured loan. With businesses like OfBusiness, small companies are able to avail instant cash with a flexible term. This is the best part that makes an unsecured loan attractive among small companies. Borrower fees and loan-term are flexible based on the borrower.
Avail Best Unsecured Business Loans at Flexible Tenures
At OfBusiness, we aim to help small and medium-sized businesses avail of instant cash at times of immediate business needs. Whether you’re looking for funds to pay your employees or procure the raw materials, unsecured loans are the best option.
The best thing that makes OfBusiness stand out among other companies in India is that we offer unsecured loans up to 2 crores. The rate of interest is shallow compared to other financial service providers in India. OfBusiness business loans are flexible; it means the borrower can choose the tenure based on their flexibility.
- The borrower must pay the interest as per the usage.
- The company does not take any collateral from borrowers.
- The documentation process is significantly more comfortable.
- The entire process can be done digitally.
- The loan is approved in three days.
If you’re looking for much higher capital for your business requirements, OfBusiness is the best option. Avail loan from OfBusiness and run your business operations seamlessly.