Unsecured Business Loan
Unsecured Business Loans are just what a Proprietor/ Partner or a Co-Owner needs to quench his or her needs when it comes to Business expansion, be it purchase of a land to start a new establishment, investing in large scale production, renovating the Office, Employee Bonus or needs of the Business which requires Cash deposits.
Unsecured Loans mean that no asset is placed as an assurance for the Bank / the Organization providing the Loan, such that if he or she is unable to fulfill his or her promise to pay the Loan amount ( Principal + Interest ) in a regularly scheduled interval then that asset will be taken as a compensation to settle the Loan.
Unsecured Business Loans are given on a basic statement between the lender in this case the bank and the borrower ( Proprietor/ Partner or a Co-Owner of a Business ) – the one applying for the loan – that the borrower will return the borrowed amount with an additional interest over a fixed period of time, thus the total amount to be paid is pre-calculated and informed to the borrower willing to take a loan that he or she needs to pay a certain amount of money each month or in a fix term interval, doing so in a fix period the loan principal with the interest will be paid off as a the total amount.
Since no collateral asset is being linked with the Loan Amount, a sense of insecurity comes into play for the lender being the Bank / the Organization providing the Loan. Thus, chances of Loan Approval decreases many folds compared to Secured Loans.
Unsecured Loans generally allow Lower Loan Amounts, Shorter Time Period and Higher Interest Rates compared to Secured Loans.