How to Get a Collateral-Free Business Loan with Ease
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How to Get a Collateral-Free Business Loan with Ease

  • Highlights

  • What are collateral free business loans

  • Why collateral free loans are beneficial

  • Steps to get a collateral free loan easily

  • Importance of credit score when applying for the loan

Collateral-free business loans end the hassle of putting valuable business or personal assets at stake in exchange for credit. They are also quicker to apply for and avail, as your lender does not have to evaluate any assets. Your business can get a collateral-free business loan with ease by matching the eligibility criteria, ensuring that your credit score is good, and completing the application correctly.

To guide you through the process of getting a collateral-free business loan, follow these five steps:

Study the lenders online and find a suitable one

There are various lenders online that offer collateral-free loans. Compare them for features, customer service, interest rates, repayment tenor prepayment charges and other charges. Pick one that is most affordable and suits your requirements the best. For example, if your clothing boutique often needs funds at the last minute to cater to urgent orders, you will want a business that offers a Flexi Loan account.

Ensure you meet the eligibility criteria

All lenders have eligibility criteria that you need to meet in order to get your loan. Before applying for a loan, review the eligibility criteria and see if you are a good fit. Matching the eligibility criteria also increases the speed at which the loan is approved. For example, your boutique firm may need to have a business vintage of 3 years, filed income taxes for the past 1 year and have audited company accounts for the past 1 year.


Check your credit score and take steps to improve it if necessary

The next step in getting a collateral-free loan is to check your personal or business credit score. This score reveals your or your business’ creditworthiness and impacts the lender’s decision to approve your loan application. Since you are applying for a loan that does not need you to attach assets as security, this score plays an important role. It tells the lender how you have repaid debts in the past and reveals your current debt as well. If you have a low credit score, you can improve it by paying off any existing debt, reducing the use of business credit cards and not making too many loan applications.

Additional Read : What to Do If Your Business' Credit Score Is Low

Check the list of documents required

A collateral-free business loan needs you to submit a few of essential documents. These include KYC details, business proof, and bank statements. Make it a point to organise these documents beforehand so you can submit them once you receive the initial loan approval. Ensure that you do not miss out on submitting a document as this can lead to your loan application’s rejection. On the other hand, submitting all your documents can help improve the chances of selection and ensure faster approval.


Complete the online application carefully and honestly

The online application procedure for a collateral-free business loan is simple to complete. While filling the application form, list all your details such as PAN number, annual turnover, and nature of your business correctly. In case you are asked about your current debt obligation, ensure that you put in the right number, as your details will be verified by the lender using your credit score and report. Any inconsistencies may lead to your application being either delayed or rejected outright. So study the fields and answer each one carefully and correctly.

Additional Read : Business Loan Mistakes to Avoid

How To Get Small Business Finance From Bajaj Finserv

Dos and Don’ts when applying for a Business Loan

Business loans from Bajaj Finserv are designed specially to help growing businesses meet their financial requirements. Easy to apply for and hassle-free to avail, these loans come with several unique benefits that make them the ideal mode of business finance for small and medium sized enterprises. However, when applying for a business loan, there are certain dos and don’ts that you should keep in mind, in order to ensure that your application is processed smoothly. Here, we tell you what they are.

Dos and Don’ts when applying for a Business Loan

You can raise money for your business quickly and easily with a collateral-free business loan, that also offers you benefits like a flexible repayment tenor and easy repayment options.

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