Unsecured Business Loans: Everything You Need to Know

Many business owners look towards unsecured business loans to raise capital. Know all about unsecured business loans here!

19 Sep,2022 09:33 IST 759
Unsecured Business Loans: Everything You Need to Know

Business owners need capital to ensure the smooth operations of their business. This capital is essential for the sustainability and success of the enterprise. However, most business owners do not have adequate personal capital or assets to pledge as collateral. Hence they look towards unsecured business loans to raise capital.

What Are Unsecured Business Loans?

An unsecured business loan is a type of loan product that allows borrowers to raise immediate capital without pledging any asset as collateral. Lenders such as banks and NBFCs set eligibility criteria for the borrowers, which do not include collateral.

As long as the borrower fulfills the eligibility criteria, lenders offer them the loan amount based on their financial documents, income statement, credit score etc. Generally, business owners take an unsecured business loan for startups or to start any other type of business.

What Are The Types Of Unsecured Business Loans?

Business owners analyze their company’s needs before choosing the type of business loan they should take. Here are the types of unsecured business loans:

1. Term Loans:

Lenders offer these loans for a specific duration, and the borrower is liable to repay the loan within the loan tenure.

2. Working Capital Loan:

Business owners take working capital loans to cover their day-to-day expenses.

3. Overdraft:

They are credit limits assigned to the borrower by the lender over and above their spending capacity.

4. Business Credit Cards:

Business credit cards work similarly to traditional credit cards to pay for expenses without using personal money immediately.
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What Is the Interest Rate On Unsecured Business Loans?

The unsecured business loan interest rate is affordable compared to other unsecured loans. It depends on the borrower’s profile and business requirements. The interest rate on such loans varies depending on factors such as the applicant’s financial history, credit score, monthly turnover etc.

What Are The Eligibility Criteria For Business Loans That Are Unsecured?

Here are the eligibility criteria for an unsecured business loan for a startup or any other type of business:

1. Established businesses operating for more than six months at the time of application.
2. Minimum turnover of Rs 90,000 in the last three months from the time of application.
3. The business does not fall under any category or list of blacklisted/excluded businesses.
4. The office/business location is not on the negative location list.
5. Charitable organizations, NGOs, and trusts are not eligible for a business loan.

Avail Of An Ideal Unsecured Business Loan With IIFL Finance

IIFL Finance is India’s leading NBFC that offers financial services with a special focus on customized and comprehensive business loans. Our business loan offers instant funds up to Rs 30 lakh with a quick disbursal process. The business loan application process is entirely online with minimal paperwork. The loan’s interest rate is attractive and affordable to ensure the repayment doesn’t create a financial burden.


Q.1: What is the Interest rate on IIFL Finance business loans that are unsecured?
Ans: The interest rates on such business loans start from 11.25%.

Q.2: How much loan amount can I take from IIFL Finance through an unsecured loan?
Ans: You can take up to Rs 30 lakh as the loan amount, which is disbursed within 48 hours of the loan approval.

Q.3: What are the minimum and maximum business loan tenures given?
Ans: You can take an instant business loan with a minimum loan tenure of 1 year and maximum loan tenure of 5 years.

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Disclaimer: The information contained in this post is for general information purposes only. IIFL Finance Limited (including its associates and affiliates) ("the Company") assumes no liability or responsibility for any errors or omissions in the contents of this post and under no circumstances shall the Company be liable for any damage, loss, injury or disappointment etc. suffered by any reader. All information in this post is provided "as is", with no guarantee of completeness, accuracy, timeliness or of the results etc. obtained from the use of this information, and without warranty of any kind, express or implied, including, but not limited to warranties of performance, merchantability and fitness for a particular purpose. Given the changing nature of laws, rules and regulations, there may be delays, omissions or inaccuracies in the information contained in this post. The information on this post is provided with the understanding that the Company is not herein engaged in rendering legal, accounting, tax, or other professional advice and services. As such, it should not be used as a substitute for consultation with professional accounting, tax, legal or other competent advisers. This post may contain views and opinions which are those of the authors and do not necessarily reflect the official policy or position of any other agency or organization. This post may also contain links to external websites that are not provided or maintained by or in any way affiliated with the Company and the Company does not guarantee the accuracy, relevance, timeliness, or completeness of any information on these external websites. Any/ all (Gold/ Personal/ Business) loan product specifications and information that maybe stated in this post are subject to change from time to time, readers are advised to reach out to the Company for current specifications of the said (Gold/ Personal/ Business) loan.

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